The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Tobin, James (1918–2002)

  • Donald D. Hester
Reference work entry


James Tobin was a brilliant economist and the leading proponent of Keynesian economics in the second half of the 20th century. He greatly advanced understanding of financial institutions and monetary theory and policy. He stressed the importance of asset holdings and wealth on consumer spending. He also argued that ‘q’, the ratio of a firm’s market value to the replacement value of its assets, was an important determinant of its investment decisions. He made major contributions to econometric methods, international economics, the theory of growth and business cycles, and policies designed to improve the welfare of minorities and the poor.


Absolute income hypothesis Allais, M. American Economic Association Animal spirits Banking industry Baumol, W. Bonds Economic growth Financial intermediation Fiscal policy Fleming, J. Floating exchange rate Friedman, M. Government debt Household portfolios Income elasticity of demand Income velocity of money Interest rate elasticity Investment decisions IS–LM model Keynes, J. M. Keynesianism Leisure Liquidity preference Lucas, R. Maximum likelihood Measure of economic welfare (MEW) Monetarism Monetary policy Monetary theory Monetary transmission mechanism Multicollinearity Mundell, R. National income accounts Negative income tax Non-accelerating inflationary rate of unemployment (NAIRU) Permanent-income hypothesis Phillips curve Pollution Portfolio balance Portfolio demand for money Rational expectations hypothesis Rationing Relative income hypothesis Ricardian equivalence theorem Solow, R. Stocks and flows Swan, T. Technology Traditional vs modern Tobin tax Tobin, J. Tobin’s q Tobit model Transactions demand for money Wage rigidity 

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Donald D. Hester
    • 1
  1. 1.