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James Tobin : an appreciation of his contribution to economics

Buiter, Willem H. (2003) James Tobin : an appreciation of his contribution to economics. Economic Journal, 113 (491). F585-F631. ISSN 1468-0297

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Abstract

Jim Tobin, who died on March 11, 2002 at the age of 84, was one of giants of economics of the second half of the twentieth century and the greatest macroeconomist of his generation. Tobin’s influence on macroeconomic theory is so pervasive - so much part of our professional ‘acquis’ - that many younger economists often are not even aware that it is his ideas they are elaborating, testing, criticising, refuting or re-inventing. In this Appreciation, I consider Tobin’s scholarly contributions, made over a period of more than 50 years. Tobin received the 1981 Nobel Memorial Prize “for his analysis of financial markets and their relations to expenditure decisions, employment, production and prices”. I consider his contributions to mean-variance portfolio demand and asset pricing theory, especially the Portfolio Separation Theorem; pitfalls in financial model building; portfolio balance and flow of funds models and the ‘credit channel’; the life-cycle model and social security; econometric methodology, including the Tobit estimator and his pioneering work using both time series and cross-sectional data to estimate food demand functions; economic growth; Tobin’s q; the ‘Tobin Tax’ ; the monetary and fiscal policy effectiveness debate, first with Milton Friedman and then with the New Classical Macroeconomics and Real Business Cycle schools; and Tobin’s approach to methodological questions including microfoundations and aggregation.

Item Type: Article
Official URL: http://www.blackwellpublishing.com/journals/ECOJ
Additional Information: This is an electronic version of an Article published in The Economic Journal 113 (491), F585-F631 © 2003 Blackwell Publishing. The definitive version is available at www.blackwell-synergy.com.LSE has developed LSE Research Online so that users may access research output of the School. Copyright and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (<http://eprints.lse.ac.uk>) of the LSE Research Online website.
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Departments > European Institute
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 20 Jul 2006
URL: http://eprints.lse.ac.uk/847/

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