The economic analysis of realised short-term capital gains

The highly expansionary monetary policies conducted in OECD countries are driving up asset prices (equities, real estate, corporate valuations). If monetary policies are to remain expansionary, the only solution to curb the rise in asset prices is to implement macroprudential policies, including the taxation of realised capital gains, and especially short-term capital gains. There would be several advantages to such taxation: S peculative asset purchases (which lead to rapid resale) would be separated out from purchases with a long-term horizon, therefore lengthen ing the holding period of assets; T he government would receive additional resources that are relatively pain-free for the economy (taxation of large capital gains, caused by monetary expansion, which are higher than expected increases in asset prices); A sset prices would be stabilised by reducing speculative demand.