Wealth Tax as a Way to Reduce Cash Hoarding

55th International Scientific Conference on Economic and Social Development - "Socio Economic Problems of Sustainable Development

7 Pages Posted: 6 Jan 2021

See all articles by Rovshan Guliyev

Rovshan Guliyev

Scientific-Research Institute of Economic Studies under Azerbaijan State University of Economics (UNEC)

Salman Najafov

Scientific-Research Institute of Economic Studies under Azerbaijan State University of Economics (UNEC)

Date Written: May 27, 2020

Abstract

One of the factors negatively affecting economic growth and employment in the advanced economies is cash hoarding. The paper argues that an effective way to reduce cash hoarding is a wealth tax. It is argued that a wealth tax will encourage individuals to invest in high-yield assets, such as equities rather than to hold deposits in banks; and an increase in equity demand will cause equity issuance by companies to increase that will contribute to investment and economic growth.

Keywords: cash hoarding, deposits, economic growth, loans, wealth tax

JEL Classification: E62

Suggested Citation

Guliyev, Rovshan and Najafov, Salman, Wealth Tax as a Way to Reduce Cash Hoarding (May 27, 2020). 55th International Scientific Conference on Economic and Social Development - "Socio Economic Problems of Sustainable Development, Available at SSRN: https://ssrn.com/abstract=3720140

Rovshan Guliyev

Scientific-Research Institute of Economic Studies under Azerbaijan State University of Economics (UNEC) ( email )

Azerbaijan

Salman Najafov (Contact Author)

Scientific-Research Institute of Economic Studies under Azerbaijan State University of Economics (UNEC) ( email )

Azerbaijan

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