Heterogeneous traders and the Tobin tax

  title={Heterogeneous traders and the Tobin tax},
  author={Frank H. Westerhoff},
  journal={Journal of Evolutionary Economics},
  • F. Westerhoff
  • Published 1 February 2003
  • Economics
  • Journal of Evolutionary Economics
Abstract. To study the effectiveness of the Tobin tax, we develop a model of heterogeneous interacting agents. Traders either speculate on the basis of technical or fundamental analysis, or abstain from the market, a decision which depends on profit considerations, as well as communication between agents. Simulations generate stylized facts such as unit roots in exchange rates, fat tails for returns, or volatility clustering. The imposition of a Tobin tax leads to a crowding out of speculators… 

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