It was nearly a quarter-century ago that the so-called "Tobin Tax," a proposal that an international tax be placed on foreign- exchange transactions, was first proposed by James Tobin, Yale's Nobel Prize-winning Sterling Professor Emeritus of Economics.
The proposal, according to Professor Tobin, was greeted with less than enthusiasm at the time.
This month, however, that policy will be reassessed in light of the global changes that have occurred in the intervening years, when the Yale Center for International and Area Studies (YCIAS) hosts its first Policy Round-Table, titled "The Tobin Tax: Is It Desirable? Is It Feasible? The Pros and Cons." The event will be held 4-6:30 p.m. on Friday, Nov. 15, in the auditorium of Luce Hall, 34 Hillhouse Ave. It is free and open to the public.
Since Professor Tobin first put forth the concept in the 1972 Janeway Lectures at Princeton University, currency crises have erupted worldwide. These include Europe's exchange-rate mechanism crises in 1992 and 1993, and Mexico's peso crisis of 1994 with its "tequila" spill-over effect. In light of these events, the proposal has resurfaced.
In fact, a new volume titled "The Tobin Tax: Coping with Financial Volatility," published this year by Oxford University Press, features a scholarly study of the proposal by leading experts in international economics, development and global finance. "This book offers serious consideration of the 'Tobin tax,' one of the most intriguing potential ways to stabilize UN financing without damaging sovereignty or distorting market flows," comments Barber Conable, president of the World Bank 1986-71.
The Nov. 15 discussion at Yale will be chaired by Gustav Ranis, the Frank Altschul Professor of International Economics and director of YCIAS. Professor Tobin and T.N. Srinivasan, the Samuel Park Professor of Economics and director of the Economic Growth Center, will also take part in the roundtable, as will economists Peter Garber of Brown University, Peter Kenen of Princeton University and Richard Lyons of the University of California at Berkeley. Other participants will include Inge Kaul, director of the Office of Development Studies at the United Nations Development Programme; Moeen Qureshi, chair and managing partner of Emerging Markets Corporation, a private investment management company in Washington, D.C.; and Paul Spahn of Johann Wolfgang Goethe- Universitat in Germany, a visiting research fellow at the World Bank.