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A Proposal for Monetary Reform


  • James Tobin

    (Yale University)


Exchange rates fluctuate very rapidly, in comparison to the prices of goods and labor. An internationally uniform tax on all spot conversions of one currency into another would reduce these fluctuations. Foreign exchange markets focus strongly on the short run, but this tax would reduce these fluctuations by increasing the cost of such transactions. It throws some sand in the wheels of short-term speculation while increasing the relative advantage of longer-term international investment flows. [Ed.]

Suggested Citation

  • James Tobin, 2003. "A Proposal for Monetary Reform," Eastern Economic Journal, Eastern Economic Association, vol. 29(4), pages 519-526, Fall.
  • Handle: RePEc:eej:eeconj:v:29:y:2003:i:4:p:519-526

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    References listed on IDEAS

    1. Poterba, James M & Venti, Steven F & Wise, David A, 1998. "401(k) Plans and Future Patterns of Retirement Saving," American Economic Review, American Economic Association, vol. 88(2), pages 179-184, May.
    2. Alan L. Gustman & Thomas L. Steinmeier, 1989. "The Stampede Toward Defined Contribution Pension Plans: Fact or Fiction?," NBER Working Papers 3086, National Bureau of Economic Research, Inc.
    3. Alan L. Gustman & Olivia S. Mitchell & Andrew A. Samwick & Thomas L. Steinmeier, "undated". "Pension and Social Security Wealth in the Health and Retirement Study," Pension Research Council Working Papers 97-3, Wharton School Pension Research Council, University of Pennsylvania.
    4. Bloom, David E & Freeman, Richard B, 1992. "The Fall in Private Pension Coverage in the United States," American Economic Review, American Economic Association, vol. 82(2), pages 539-545, May.
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    Cited by:

    1. Javier Bianchi, 2011. "Overborrowing and Systemic Externalities in the Business Cycle," American Economic Review, American Economic Association, vol. 101(7), pages 3400-3426, December.
    2. Victoria Saporta & Kamhon Kan, 1997. "The effects of Stamp Duty on the Level and Volatility of Equity Prices," Bank of England working papers 71, Bank of England.

    More about this item


    Monetary; Policy; Tax; Taxes;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements


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