James Tobin

About James Tobin

Who is it?: Economist
Birth Day: March 05, 1918
Birth Place: Champaign, United States
Died On: March 11, 2002(2002-03-11) (aged 84)\nNew Haven, Connecticut, USA
Birth Sign: Aries
Institution: Yale University Cowles Commission
Field: Macroeconomics
School or tradition: Neo-Keynesian economics
Alma mater: Harvard University
Doctoral advisor: Joseph Schumpeter
Doctoral students: Edmund Phelps William Brainard Koichi Hamada Duncan K. Foley Janet Yellen Willem Buiter Hiroshi Yoshikawa
Influences: Keynes · Hansen · Haberler · Slichter · Chamberlin · Baumol · Leontief · Knight
Contributions: Portfolio theory Keynesian economics Tobin's q Tobit model Tobin Tax Mundell–Tobin effect
Awards: John Bates Clark Medal (1955) Nobel Prize in Economics (1981)

James Tobin Net Worth

James Tobin was bornon March 05, 1918 in Champaign, United States, is Economist. Sometimes the true worth of a person can be gauged from the legacy he/she leaves behind. James Tobin is one such man whose lifelong work in economics has left a lasting influence on how we understand the behavior of financial markets. Born into a middle-class, educated and liberal family, Tobin, from his childhood was exposed to intellectual dialogue, which helped shaped his career and mold his thoughts. He was very much interested in economics as he thought that it offered hope to better mankind. It was his growing up years in the 1930s, during the Great Depression, a time of social and political crisis, which had a great influence on his thought. He reasoned, correctly, that the failure of capitalist economics was the main reason for much of the economic disasters facing the world. So, in that time of crisis, he too became a trigger that started a revolution in economic theory, partly as a challenge to the economic orthodoxy prevalent at that time. Nowadays, many of his theories have become standard applications in financial models and his works have become standard topics in the subject of economics. To know more on one of the most brilliant thinker of our times, continue reading the biography further.
James Tobin is a member of Intellectuals & Academics

💰 Net worth: $8 Million

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Biography/Timeline

1918

Tobin was born on March 5, 1918 in Champaign, Illinois. His father was Louis Michael Tobin, (b. 1879) a Journalist working at the University of Illinois at Urbana-Champaign. His father had fought in World War I, was a member of the first Greek organization at Illinois (Delta Tau Delta fraternity Beta Upsilon chapter), and was credited as the Inventor of 'Homecoming'. His mother, Margaret Edgerton Tobin (b. 1893), was a social worker. Tobin followed primary school at the University Laboratory High School of Urbana, Illinois, a laboratory school in the university's campus.

1935

In 1935, on his father's advice, Tobin took the entrance exams for Harvard University. Despite no special preparation for the exams, he passed and was admitted with a national scholarship from the university. During his studies he first read Keynes' The General Theory of Employment, Interest and Money, published in 1936. Tobin graduated summa cum laude in 1939 with a thesis centered on a critical analysis of Keynes' mechanism for introducing equilibrium "involuntary" unemployment. His first published article, in 1941, was based on this senior's thesis.

1940

Tobin immediately started graduate studies, also at Harvard, earning his M.A. degree in 1940. In 1941, he interrupted graduate studies to work for the Office of Price Administration and Civilian Supply and the War Production Board in Washington, D.C.. The next year, after the United States entered World War II, he enlisted in the US Navy, spending the war as an officer on a destroyer, including, among possible others, the USS Kearny (DD-432). At the end of the war he returned to Harvard and resumed studies, receiving his Ph.D. in 1947 with a thesis on the consumption function written under the supervision of Joseph Schumpeter. In 1947 Tobin was elected a Junior Fellow of Harvard's Society of Fellows, which allowed him the freedom and funding to spend the next three years studying and doing research.

1946

James Tobin married Elizabeth Fay Ringo, a former M.I.T. student of Paul Samuelson, on September 14, 1946. They had four children: Margaret Ringo (born in 1948), Louis Michael (born in 1951), Hugh Ringo (born in 1953) and Roger Gill (born in 1956). In late June, 2009, the family announced via a private email that Tobin's wife had died at the age of 90.

1950

In 1950 Tobin moved to Yale University, where he remained for the rest of his career. He joined the Cowles Foundation, which moved to Yale in 1955, also serving as its President between 1955–1961 and 1964–1965. His main research interest was to provide microfoundations to Keynesian economics, with a special focus on monetary economics. One of his frequent collaborators was his Yale colleague william Brainard. In 1957 Tobin was appointed Sterling Professor of Economics at Yale.

1955

Tobin was awarded the John Bates Clark Medal in 1955 and, in 1981, the Nobel Memorial Prize in Economics. He was a fellow of several professional associations, holding the position of President of the American Economic Association in 1971.

1958

In his 1958 article Tobin also led the way in showing how to deal with utility maximization under uncertainty with an infinite number of possible states. As Palda explains "One way to get out of the mess of figuring out asset prices using a model of maximizing the expected utility of investing in stocks is to make assumptions about either preferences or the probabilities of the different possible states of the world. Nobellist James Tobin (1958) took this line and discovered that in some cases you do not need to worry about the utility of income in thousands of states, and the attached probabilities, to solve the consumer’s choice on how to spread income among states. When preferences contain only a linear and a squared term (a case of diminishing returns) or the probabilities of different stock returns follow a normal distribution (an equation that contains a linear and squared terms as parameters), a simple formulation of a person’s investment choices becomes possible. Under Tobin’s assumptions we can reformulate the person’s decision Problem as being one of trading off risk and expected return. Risk, or more precisely the variance of your investment portfolio creates spread in the returns you expect. People are willing to assume more risk only if compensated by a higher level of expected return. One can thus think of a tradeoff people are willing to make between risk and expected return. They invest in risky assets to the point at which their willingness to trade off risk and return is equal to the rate at which they able to trade them off. It is difficult to exaggerate how brilliant is the simplification of the investment Problem that flows from these assumptions. Instead of worrying about the investor’s optimization Problem in potentially millions of possible states of the world, one need only worry about how the investor can trade off risk and return in the stock market."

1961

Besides teaching and research, Tobin was also strongly involved in the public life, writing on current economic issues and serving as an economic expert and policy consultant. During 1961–62, he served as a member of John F. Kennedy's Council of Economic Advisors, under the chairman Walter Heller, then acted as a consultant between 1962–68. Here, in close collaboration with Arthur Okun, Robert Solow and Kenneth Arrow, he helped design the Keynesian economic policy implemented by the Kennedy administration. Tobin also served for several terms as a member of the Board of Governors of Federal Reserve System Academic Consultants and as a consultant of the US Treasury Department.

1972

In 1972 Tobin, along with fellow Yale economics professor william Nordhaus, published Is Growth Obsolete?, an article that introduced the Measure of Economic Welfare as the first model for economic sustainability assessment, and economic sustainability measurement.

2002

In 1982–1983, Tobin was Ford Visiting Research Professor of Economics at the University of California, Berkeley. In 1988 he formally retired from Yale, but continued to deliver some lectures as Professor Emeritus and continued to write. He died on March 11, 2002, in New Haven, Connecticut.

2009

In August 2009 in a roundtable interview in Prospect magazine, Adair Turner supported the idea of new global taxes on financial transactions, warning that the “swollen” financial sector paying excessive salaries had grown too big for society. Lord Turner’s suggestion that a “Tobin tax” – named after James Tobin – should be considered for financial transactions made headlines around the world.