James Tobin (1918-2002) was an American economist who made important contributions in monetary economics. He is known for proposing the Tobin tax on currency transactions and developing Tobin's Q ratio. Tobin received the John Bates Clark Medal in 1955 and the Nobel Memorial Prize in Economics in 1981 for his influential work on monetary and macroeconomic theory. He served as an advisor to the US Treasury and Federal Reserve and was a professor at Yale University.

1. By Jitendra Kolhe
Roll No 11170

2.  Early Life
 Academic activity and consultancy
 Contribution
 Tobin Tax
 Tobin’s q
 Personnel Life
 Achievements and Publications

3.  Born on March 5, 1918 in Champaign, Illinois
 Father Louis Michael Tobin, a journalist working at the University of
Illinois at Urbana-Champaign
 Mother, Margaret Edgerton Tobin, a social worker
 1935-entrance exams for Harvard University
 1939-graduated With summa cum laude
 1947-Ph.D.at Harvard

4.  Joined the Cowles Foundation, serving as its president between
1955–1961 and 1964-1965.
 Main research interest
◦ to provide micro foundations to Keynesian economics, with a special focus on
monetary economics.
 In 1957 appointed Sterling Professor at Yale.
 Member of the Board of Governors of Federal Reserve System
Academic Consultants
 Consultant of the US Treasury Department
 Awarded the John Bates Clark Medal in 1955
 In 1981, the Nobel Memorial Prize in Economics
 A trustee of Economists for Peace and Security

5.  Bretton Woods system suggested was an obligation for each
country to adopt a monetary policy that maintained the exchange
rate of its currency within a fixed value—plus or minus one percent
—in terms of gold.
 “The United States dollar would no longer be convertible to gold”-
United States President Richard Nixon, August 15, 1971
 Created the situation whereby the U.S. dollar became the sole
backing of currencies and a reserve currency for the member states
of the Bretton Woods system, leading the system to collapse in the
face of increasing financial strain in that same year

6.  This dissuades speculators as many investors invest their money in
foreign exchange on a very short-term basis. If this money is
suddenly withdrawn, countries have to drastically increase interest
rates for their currency to still be attractive.
 Tobin Tax :A tax on all spot conversions of one currency into
another
 At each exchange of a currency into another a small tax would be
levied - let's say, 0.5% of the volume of the transaction.

7.  The ratio between the market value and replacement value of the
same physical asset
 If the market value reflected solely the recorded assets of a
company, Tobin's q would be 1.0.
 If Tobin's q is greater than 1.0, then the market value is greater than
the value of the company's recorded assets. This suggests that the
market value reflects some unmeasured or unrecorded assets of
the company. High Tobin's q values encourage companies to invest
more in capital because they are "worth" more than the price they
paid for them.

8.  q = Market Value Of Installed capital
Replacement Cost of capital
 If a company's stock price is $2 and the price of the capital in the
current market is $1; the company can issue shares and with the
revenue invest in capital. In this case q>1.
 On the other hand, if Tobin's q is less than 1, the market value is
less than the recorded value of the assets of the company. This
suggests that the market may be undervaluing the company.

9.  James Tobin married Elizabeth Fay Ringo, a former M.I.T. student
of Paul Samuelson, on September 14, 1946
 Betty was a recent student of Samuelson's at M.I.T., teaching
economics at Wellesley College at the time we met
 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)
 Died in March 11, 2002(2002-03-11) (aged 84)
New Haven, Connecticut, USA

10.  John Bates Clark Medal (1955)
 Nobel Prize in Economics (1981)
 “The Sveriges Riksbank” Prize in Economic Sciences in Memory of
Alfred Nobel 1981
 1961-62, served as a member of John F. Kennedy's Council of
Economic Advisors,
 Enrolled in the US Navy, spending the war as an officer on a destroyer.
 Tobin, James (1941). "A note on the money wage problem".
 Tobin, James (1956). "The Interest-Elasticity of Transactions Demand
for Cash,“
 Tobin, James (1969). "A General Equilibrium Approach to Monetary
Theory".
 Tobin, James (1958). "Liquidity Preference as Behavior Towards Risk".

11.  Economists for Peace and Security History: James Tobin
 http://www.nobelprize.org/
 http://cowles.econ.yale.edu
 http://www.epsusa.org