IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Why Tax Foreign Exchange? Comments on a Proposed Tobin Tax

Listed author(s):
  • Mardi H Dungey

    (School of Economics, La Trobe University)

At various times since Tobin floated the idea of a tax on foreign exchange transactions the concept has been revisited - particularly in times of financial market turmoil when it has been proposed as a means of reducing exchange rate volatility. Recently, Harcourt (1997) suggested a further refinement of the Tobin tax to apply only to 'speculative transactions'. This paper identifies three types of foreign exchange transactions - informed trades, liquidity trades and speculative trades - and highlights the difficulties in differentiating between these types of transactions. It is not clear whether some (or what) proportion of speculative trades is of benefit to the economy. Further, the undesirability of exchange rate volatility itself has not been established. In particular, the costs and benefits of exchange rate volatility have not been compared with the alternatives of interest rate volatility under a fixed exchange rate regime or the market innovations resulting from the imposition of a Tobin tax.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by School of Economics, La Trobe University in its series Working Papers with number 1998.04.

in new window

Length: 11 pages
Date of creation: 1998
Handle: RePEc:trb:wpaper:1998.04
Contact details of provider: Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:trb:wpaper:1998.04. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Scoglio)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.