Monetary policy and Tobin taxes: a welfare analysis

Jong Shin, Rajesh Singh and Chetan Subramanian

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: This paper studies the choice of monetary policy regime in a small open economy under productivity shocks and noise traders in forex markets. We focus on two simple rules: fixed exchange rates and inflation targeting. We contrast the above two rules against optimal policy with commitment. In general, the presence of noise traders increases the desirability of a fixed exchange rate regime. We also evaluate the welfare impact of Tobin taxes on capital flows. These taxes help unambiguously in the absence of productivity shocks; their welfare impact under productivity shocks depends on the monetary regime in place and the trade elasticity between domestic and foreign goods.

Date: 2014-03-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://dr.lib.iastate.edu/server/api/core/bitstre ... 83e1fd6890a9/content
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Working Paper: Monetary Policy and Tobin Taxes: A Welfare Analysis (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:isu:genstf:201403080800001035

Access Statistics for this paper

More papers in ISU General Staff Papers from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer ().