The Tobin Tax Coping with Financial Volatility

by Haq, Mahbub Ul; Kaul, Inge; Grunberg, Isabelle

• ISBN13: 9780195111804
• ISBN10: 019511180X
• Format: Hardcover
• Copyright: 1996-07-11
• Publisher: Oxford University Press

Summary

In his 1972 Janeway Lectures at Princeton, James Tobin, the 1981 Nobel Prize winner for economics, submitted a proposal for a levy on international currency transactions. The idea was not greeted with enthusiasm, as the 1970s were a period of optimism and confidence in floating exchange rages. Yet, whenever currency crises erupted during the past decades, the proposal for a levy on international currency transactions would once again arise. In the 1990s, two additional facts have sharpened interest in the Tobin tax proposal. First is the growing volume of foreign exchange trading. Second, interest is coming not only from policymakers and experts concerned with the smooth functioning of financial markets. It is shared by those concerned with public financing of development--the fiscal crisis of the state as well as the growing need for international cooperation on problems such as the environment, poverty, peace and security. This work makes a systematic analysis of the proposal for a foreign exchange transactions levy. Its chapters examine the economic desirability of such a levy, its technical and political feasibility, its revenue potential, the possible uses of that revenue, and related administrative and institutional aspects.

Table of Contents

Acknowledgements	p. vii
Prologue	p. ix
Overview	p. 1
The Tobin Tax as an Instrument of Global Monetary Policy
Taxing International Financial Transactions to Enhance the Operation of the International Monetary System	p. 15
How Well Do Markets Work: Might a Tobin Tax Help?	p. 41
The Tobin Tax: Good Theory, Weak Evidence, Questionable Policy	p. 83
Technical Feasibility and Implementation
The Feasibility of Taxing Foreign Exchange Transactions	p. 109
Issues of Enforcement and Evasion in a Tax on Foreign Exchange Transactions	p. 129
Institutional Arrangements for a Tax on International Currency Transactions	p. 143
Lessons from Individual Country Experiences
Managing Capital Inflows in Latin America	p. 161
The Republic of Korea's Experience with Managing Foreign Capital Flows	p. 193
Revenue Raised by the Tobin Tax
On the Revenue Potential and Phasing in of the Tobin Tax	p. 223
Potential Uses of the Revenue from a Tobin Tax	p. 255
Conclusion: The Tobin Tax: What Have We Learned?	p. 273
Statistical Appendix	p. 289
About the Contributors	p. 301
Further Reading on the Tobin Tax	p. 307
Index	p. 309
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