Some theoretical models suggest that transaction taxes reduce volatility, while most empirical evidence shows that higher transaction costs are actually associated with more rather than less volatility. But overall it appears that if these taxes were appropriately designed, they are no more likely to increase market volatility than reduce it.Source.
Disconcerting statement of the day
Tags: Tobin Tax Robin Hood tax
1 Comment
You know, the more I think about this statement, the more I'm amazed it hasn't been absolutely leapt upon by the anti-FTT camp, which I would place myself in.
So much of the justification is based on shaky economics, which is then excused with the argument that 'look where economics got us'.