Document Type : Scientific research

Authors

1 Professor of Private Law, Faculty of Law and Political Science, University of Tehran

2 Graduate of international trade and economic law

Abstract

It is assumed that financial markets by utilising private law instruments operate in a way which lead to equilibrium and efficiency based on distributive justice. However, in case financial markets deviate from this equilibrium and efficiency, there is a need to provide and implement economic law remedial solutions which, includes the utilisation of tax-subsidy policies that bring in favorable distributive outcomes. The present study uses library resources and descriptive analytical approach to analyze important tax-subsidy interventions in Iranian financial markets, explain appropriate normative framework for tax-subsidy intervention in financial markets and examine compliance of tax-subsidy interventions in Iranian financial markets with this normative framework. The authors believe that the most appropriate way to restore the efficiency and equilibrium of financial markets is to apply those tax-subsidy policies and regulations that are based on the Kaldor-Hicks formula of distributive justice; Derived from economic analysis of law. These interventions are designed in a way that if in short-term they bring in adverse effects for some groups, these groups will be compensated by the effect of wealth maximization in the long run.
 

Keywords

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