The currency transaction tax

The CTT would affect the foreign exchange market by increas- ing the width of the spread. [...] The former figure is the average of the increases in trading volumes of the $/U and the e/U from 2004 to 2007. [...] In the DM e/$ market in January 1999 the spread rose by a full basis point with the introduction of the euro. [...] The usual measure of the variability of the spread is the “standard error”, the average deviation of the spread from its own average value, in basis points. [...] The post-tax volume depends on the pre-tax volume (v0), the elasticity of volume with respect to the spread (−0.43), and the percentage increase of the spread due to the tax (1.0/s̄, where s̄ is the average spread).