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
Date Written: May 27, 2020
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: Suggested Citation