Tackling Instability in Financial Markets with a Panic Tax
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The motivation for much recent debate on introducing a financial transaction or ‘Tobin’ Tax is to generate revenues for public goods – this is the main aim of the ‘Robin Hood Tax’ campaign. But James Tobin first proposed his idea in order to enhance market stability. The evidence suggests that a Tobin Tax might not reduce instability. However, a Panic Tax – a simple mechanism to tax panic rather than trade – could promote stability by dampening crashes and booms and providing policy space for more orderly adjustments in the financial markets.
CitationMcCulloch, N. (2011) Tackling Instability in Financial Markets with a Panic Tax. IDS Bulletin 42(5): 109-113
Is part of seriesIDS Bulletin Vol. 42 Nos. 5
Rights holder© 2011 The Author. IDS Bulletin © 2011 Institute of Development Studies
- Volume 42. Issue 5