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International policy coordination for financial market stability in the Asian economies

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  • Young-Han Kim

Abstract

Based on the understanding of financial crisis as the self-fulfilling crisis of speculators belief system, this paper examines the feasibility of introducing the Tobin tax system to reduce financial volatility in the Asian foreign exchange markets. The model analysis in this paper provides the following policy implications. To reduce the motivation to deviate from the policy coordination, it is required to allow all tax revenues to collecting countries, especially to Singapore and Hong Kong. Even without the participation of the major western countries, the start of the tax policy coordination in the Asian region can have significant signalling effects to reduce speculative motivation.

Suggested Citation

  • Young-Han Kim, 2003. "International policy coordination for financial market stability in the Asian economies," Applied Economics, Taylor & Francis Journals, vol. 35(10), pages 1123-1132.
    • Handle: RePEc:taf:applec:v:35:y:2003:i:10:p:1123-1132
    DOI: 10.1080/00036840210161800
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    1. Philippe Bacchetta & Eric van Wincoop, 2000. "Capital Flows to Emerging Markets: Liberalization, Overshooting, and Volatility," NBER Chapters, in: Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies, pages 61-98, National Bureau of Economic Research, Inc.
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