James Tobin

"The key behavioral assumption... spending... and portfolio decisions are independent... [A]ccumulation of wealth... [is] separable from... its allocation. As savers, people... add to their wealth; as portfolio managers, they... distribute among... assets and debts the net worth... The propensity to consume may depend upon interest rates, but... not... directly on the... mix of asset supplies or... rates... these... are growing."

"A forthcoming book by Harry Markowitz, Techniques of Portfolio Selection, will treat the general problem of finding dominant sets and computing the corresponding opportunity locus, for sets of securities all of which involve risk. Markowitzs main interest is prescription of rules of rational behaviour for investors; the main concern of this paper is the implications for economic theory, mainly , that can be derived from assuming that investors do in fact follow such rules."

"Monetarism—both of the older Friedman version stressing adherence to money stock targets and of the newer rational expectations variety—has been badly discredited. The stage has been set for recovery in the popularity of Keynesian diagnoses and remedies. I do not mean to imply, of course, that there is some Keynesian truth, vintage 1936 or 1961, to which economists and policymakers will or should now return, ignoring the lessons of economic events and of developments in economics itself over these last turbulent fifteen years. I do mean that in the new intellectual synthesis which I hope and expect will emerge to replace the divisive controversies and chaotic debates on macroeconomic policies, Keynesian ideas will have a prominent place."

"The historic terrain of macro-economic theory is the explanation of the levels and fluctuations of overall economic activity. Macro-economists have been especially interested in the effects of alternative fiscal, financial, and monetary policies."

"The general accounting framework for... the capital account... Rows represent assets or debts. ...Columns represent sectors of the economy ...Entries in cells ...can be postive, negative, or zero. A negative entry means... the sector... is a debtor in the... asset indicated by the row. ...The sum across the row is the net exogenous supply of the asset to the economy ...For stocks of goods, this ...is the economys inheritance from the past. For internally generated financial assets the net... supply... is zero. If from the sums in the final column the... governments holdings of an asset are subtracted (or its debt added), the net holdings of the private economy result. The sum of a column represents the net worth of a sector. The sum of the final column is the national wealth. ...[P]rivate wealth differs from this total by the amount of the governments net worth. If government is a net debtor... if its stocks of goods are ignored, then private wealth exceeds national wealth."

"In economic surveys of households, many variables have the following characteristics: The variable has a lower, or upper, limit and takes on the limiting value for a substantial number of respondents. For the remaining respondents, the variable takes on a wide range of values above, or below, the limit."

"Economics has always flourished and acquired energy from controversies generated by practical policy questions of the day. That was true in the times of Smith, and Ricardo, and Keynes, and it is true today. These periods of division and revolution and counterrevolution are generally followed by periods of synthesis and consolidation from which the science emerges stronger. i am optimistic that this will happen again, and that the best of the insights of the new clasicals will be absorbed in a mainstream, in which the essential insights of Keynesian economists also survive."

"Tobin was a person who really impressed me, because he had a passion for social justice and for public policy (...) for Tobin it was always something that was about making the lives of people better."

"I shall argue that Keynesian macroeconomics neither asserts nor requires nominal wage and/or price rigidity. It does assert and require that markets not be instantaneously and continuously cleared by prices."

"The rate of investment – the speed at which investors wish to increase the capital stock – should be related, if to anything, to q, the value of capital relative to its replacement cost."

"There is no reason to think that the impact [of monetary policy] will be captured in any single [variable]... , whether it is a monetary stock or a market interest rate."

"[F]or monetary analysis... assign... to each asset a rate of return r_i (i=1,2,... n) and... [imagine] each sector j (j=1,2,... m) to have a net demand for each asset, f_{ij}, which is a function of the vector r_i and possibly of other variables... [I]n practice, many of the cells are empty..."