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The Tobin tax: effects on volatility, trade and monetary policy autonomy
2001 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

In 1972 Professor James Tobin presented a proposal for a tax on currency transactions. The purpose was to increase the monetary policy autonomy of countries by means of restraining short-term capital movements. During the last few years the proposal has been widely debated in both the scientific community and in the media. The purpose of this thesis is to clarify the purpose of the Tobin tax and evaluate its effects on trade, financial market volatility and monetary policy autonomy. Effects on consumers and welfare are not within the scope of the thesis. The methodology has been to study factors such as speculation behaviour, risk hedging, exchange rates and market adjustments to try and determine how the tax would affect the chosen study objects. The conclusions reached are conditional. Trade could be reduced due to increased transaction costs, but if increased monetary policy autonomy leads to more stable national economies this reduction might not take place. A similar relationship was found for volatility, which is believed to increase as an effect of higher transaction costs. The degree of monetary policy autonomy created depends on the size of the tax.

Place, publisher, year, edition, pages
Keyword [en]
Social Behaviour Law, Tobin tax, transaction tax, volatility, monetary policy, autonomy, financial market, capital movements, tobinskatten
Keyword [sv]
Samhälls-, beteendevetenskap, juridik
URN: urn:nbn:se:ltu:diva-49124ISRN: LTU-SHU-EX--01/138--SELocal ID: 6851eb4c-8311-4016-acd1-e5208c49ba0fOAI: diva2:1022469
Subject / course
Student thesis, at least 15 credits
Educational program
Economics, bachelor's level
Validerat; 20101217 (root)Available from: 2016-10-04 Created: 2016-10-04Bibliographically approved

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