On the Tobin Tax

  title={On the Tobin Tax},
  author={Korkut Alp Erturk},
  journal={Review of Political Economy},
  pages={71 - 78}
  • K. Erturk
  • Published 1 January 2006
  • Economics
  • Review of Political Economy
Abstract This paper clarifies why a transaction tax, such as the Tobin Tax, can stabilize financial markets. In markets that are already fairly deep, relatively small changes in trading volume are unlikely to have any impact (positive or negative) on volatility. Thus, a Tobin Tax can potentially have a stabilizing effect on international currency markets not because it reduces the excessive volume of transactions of speculators, but because it can slow down the speed with which market traders… 

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