Abstract
New Keynesians Joseph Stiglitz (1989) and Lawrence Summers (Summers and Summers 1989), following the lead of Old Keynesian James Tobin (1974), have argued that an ad valorem tax on financial market transactions is socially desirable in that it will reduce the observed volatility in our ‘super-efficient financial markets’. All of these Keynesians claim that Keynes initiated the recommendation for a universal financial transactions tax as a socially desirable policy.
This paper was the invited Economic Issues lecture presented to a plenary session of the Royal Economic Society in April 1998. It was published in Economic Issues, 36 (1998). The author is grateful to Peter L. Bernstein for some interesting electronic discussions that encouraged him to write this paper.
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© 1999 Paul Davidson
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Davidson, L. (1999). Volatile Financial Markets and the Speculator. In: Davidson, L. (eds) Uncertainty, International Money, Employment and Theory. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-14991-9_21
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DOI: https://doi.org/10.1007/978-1-349-14991-9_21
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