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Cont–Bouchaud Percolation Model Including Tobin Tax

Author

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  • GUDRUN EHRENSTEIN

    (Institute for Theoretical Physics, Cologne University, D-50923 Köln, Euroland)

Abstract

The Tobin tax is an often discussed method to tame speculation and get a source of income. The discussion is especially heated when the financial markets are in crisis. In this article we refer to the foreign exchange markets. The Tobin tax should be a small international tax affecting all currency transactions and thus consequently reducing destabilizing speculations. In this way this tax should take over a control function. By including the Tobin tax in the microscopic model of Cont and Bouchaud one finds that this tax could be the right method to control foreign exchange operations and to get a good source of income.

Suggested Citation

  • Gudrun Ehrenstein, 2002. "Cont–Bouchaud Percolation Model Including Tobin Tax," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 13(10), pages 1323-1331.
    • Handle: RePEc:wsi:ijmpcx:v:13:y:2002:i:10:n:s0129183102003917
    DOI: 10.1142/S0129183102003917
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    Citations

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    Cited by:

    1. Filip Stanek & Jiri Kukacka, 2018. "The Impact of the Tobin Tax in a Heterogeneous Agent Model of the Foreign Exchange Market," Computational Economics, Springer;Society for Computational Economics, vol. 51(4), pages 865-892, April.
    2. Sirnes Espen, 2022. "Estimating the Effect of Transaction Costs Using the Tick Size as a Proxy," Review of Economics, De Gruyter, vol. 73(1), pages 57-77, April.
    3. Damette, Olivier, 2016. "Mixture Distribution Hypothesis And The Impact Of A Tobin Tax On Exchange Rate Volatility: A Reassessment," Macroeconomic Dynamics, Cambridge University Press, vol. 20(6), pages 1600-1622, September.

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