Arbeitspapier

The economic consequences of a Tobin tax: An experimental analysis

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.

Language
Englisch

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

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

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

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Hanke, Michael
  • Huber, Jürgen
  • Kirchler, Michael
  • Sutter, Matthias
  • University of Innsbruck, Department of Public Finance

Time of origin

  • 2007

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