Welcome to Bookmarker!

This is a personal project by @dellsystem. I built this to help me retain information from the books I'm reading. Currently can only be used by a single user (myself), but I plan to extend it to support multiple users eventually.

Source code on GitHub (MIT license).

Thing 22

Financial markets need to become less, not more, efficient

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Needs summary

Chang, H. (2011). Thing 22. In Chang, H. 23 Things They Don't Tell You About Capitalism. Bloomsbury Press, pp. 231-241

a proposed tax on international financial transactions, especially speculative currency exchange transactions; suggested by Nobel Memorial Prize in Economic Sciences Laureate economist James Tobin

A taboo in polite circles until recenty, the so-called Tobin Tax has recently been advocated by Gordon Brown

proposed with the intention of slowing down financial flows that might damage the economy

by Ha-Joon Chang
notable
2 years, 1 month ago

A taboo in polite circles until recenty, the so-called Tobin Tax has recently been advocated by Gordon Brown

proposed with the intention of slowing down financial flows that might damage the economy

by Ha-Joon Chang
notable
2 years, 1 month ago

Thus, exactly because finance is efficient at responding to changing profit opportunities, it can become harmful for the rest ef the economy. And this is why James Tobin, the 1981 Nobel laureate in economics, talked of the need to 'throw some sand in the wheels of our excessively efficient international money markets'. For this purpose, Tobin proposed a financial transaction tax, deliberately intended so slow down financial flows. A taboo in polite circles until recently, the so-called Tobin Tax has recently been advocated by Gordon Brown, the former British prime minister. But the Tobin Tax is not the only way in which we can reduce the speed gap between finance and the real economy. Other means include making hostile takeovers difficult (hereby reducing the gains from speculative investment in stocks), banning short-selling (the practice of selling shares that you do not own today), increasing margin requirements (that is, the proportion of the money that has to be paid upfront when buying shares) or putting restrictions on cross-border capital movements, especially for developing countries.

by Ha-Joon Chang 2 years, 1 month ago

Thus, exactly because finance is efficient at responding to changing profit opportunities, it can become harmful for the rest ef the economy. And this is why James Tobin, the 1981 Nobel laureate in economics, talked of the need to 'throw some sand in the wheels of our excessively efficient international money markets'. For this purpose, Tobin proposed a financial transaction tax, deliberately intended so slow down financial flows. A taboo in polite circles until recently, the so-called Tobin Tax has recently been advocated by Gordon Brown, the former British prime minister. But the Tobin Tax is not the only way in which we can reduce the speed gap between finance and the real economy. Other means include making hostile takeovers difficult (hereby reducing the gains from speculative investment in stocks), banning short-selling (the practice of selling shares that you do not own today), increasing margin requirements (that is, the proportion of the money that has to be paid upfront when buying shares) or putting restrictions on cross-border capital movements, especially for developing countries.

by Ha-Joon Chang 2 years, 1 month ago