It is estimated that well over half (on some estimates 95%) of the $1.8 trillion in currency transactions that occur every day are speculative and as such are potentially destabilizing to local economies. Local currencies can devalue rapidly, causing major financial crises such as occurred in East Asia in 1997/1998 or Brazil in 1999. When the local economy is in the grip of such crises, millions of people can be significantly harmed. In the 1970s, James Tobin suggested a small tax on currency trades to ward off such eventualities, to decrease speculation, and to promote more long-term investing. The purpose of such a tax would be to reduce destabilizing trades, and the order of magnitude proposed is considerably less than 1% on each trade. The tax would promote more stability and better conditions for development, contributing to the cause of global justice.
The USA, Japan, the European Union, Switzerland, Hong Kong, and Singapore account for 90% of currency exchange transactions, and...
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Brock, G. (2011). Tobin Tax. In: Chatterjee, D.K. (eds) Encyclopedia of Global Justice. Springer, Dordrecht. https://doi.org/10.1007/978-1-4020-9160-5_6
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