The economic consequences of a Tobin tax: An experimental analysis

Arbeitspapier

The effects of a Tobin tax on foreign exchange markets have long been disputed. We present an experiment with currency trading on two markets, where either none, one, or both markets are taxed. Our results confirm the hitherto undisputed issues: a tax reduces trading volume, shifts market share to untaxed markets, and leads to negligible tax revenues if tax havens exist. Concerning the controversial issues we find that (i) volatility effects depend on the existence of tax havens and on market size, (ii) market efficiency remains unaffected by the tax, (iii) short-term speculation is reduced, and (iv) the tax has persistent effects even after its abolishment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2007-18

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Fiscal Policy
• Subject: Tobin tax ; experiment ; foreign exchange ; market efficiency ; trading volume ; volatility ; Tobinsteuer ; Markteffizienz ; Börsenumsatz ; Volatilität ; Devisenmarkt ; Schätzung ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hanke, Michael ; Huber, Jürgen ; Kirchler, Michael ; Sutter, Matthias
• Event: Veröffentlichung
• (who): University of Innsbruck, Department of Public Finance
• (where): Innsbruck
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/71924
• Last update: 10.03.2025, 11:45 AM CET