THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA

Some countries in Latin America have introduced a tax on bank withdrawals in order to increase revenue. The debit tax has usually been levied in periods of economic turbulence. This paper analyzes the effects of such a tax on real cash holdings and on balances of different types of bank accounts in...

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Autores principales: Giraldo,Marcela, Buckles,Brian W
Lenguaje:English
Publicado: Pontificia Universidad Católica de Chile. Instituto de Economía. 2011
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Acceso en línea:http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100003
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spelling oai:scielo:S0719-043320110001000032012-05-29THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIAGiraldo,MarcelaBuckles,Brian W Debit tax banking Latin America transaction tax money demand Some countries in Latin America have introduced a tax on bank withdrawals in order to increase revenue. The debit tax has usually been levied in periods of economic turbulence. This paper analyzes the effects of such a tax on real cash holdings and on balances of different types of bank accounts in Colombia. The paper analyzes data for the period 1994 to 2007 and then verifies the robustness of the model using only the data from 2000 to 2007, thereby eliminating the economic crisis of the late 1990s. The results show that even though the tax caused a decrease in checking account balances, the changes produced in total balances of real cash after 2001 cannot be attributed to the debit tax. However, an increase in the rate of growth of savings account balances can be attributed to it, suggesting a substitution from checking toward savings accounts.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.48 n.1 20112011-05-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100003en10.4067/S0719-04332011000100003
institution Scielo Chile
collection Scielo Chile
language English
topic Debit tax
banking
Latin America
transaction tax
money demand
spellingShingle Debit tax
banking
Latin America
transaction tax
money demand
Giraldo,Marcela
Buckles,Brian W
THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
description Some countries in Latin America have introduced a tax on bank withdrawals in order to increase revenue. The debit tax has usually been levied in periods of economic turbulence. This paper analyzes the effects of such a tax on real cash holdings and on balances of different types of bank accounts in Colombia. The paper analyzes data for the period 1994 to 2007 and then verifies the robustness of the model using only the data from 2000 to 2007, thereby eliminating the economic crisis of the late 1990s. The results show that even though the tax caused a decrease in checking account balances, the changes produced in total balances of real cash after 2001 cannot be attributed to the debit tax. However, an increase in the rate of growth of savings account balances can be attributed to it, suggesting a substitution from checking toward savings accounts.
author Giraldo,Marcela
Buckles,Brian W
author_facet Giraldo,Marcela
Buckles,Brian W
author_sort Giraldo,Marcela
title THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
title_short THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
title_full THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
title_fullStr THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
title_full_unstemmed THE IMPACT OF FINANCIAL TRANSACTIONS TAXES ON MONEY DEMAND IN COLOMBIA
title_sort impact of financial transactions taxes on money demand in colombia
publisher Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate 2011
url http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100003
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