Max Beberman Award
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Dr. James Tobin Class of 1935
The
late James Tobin was a professor emeritus of economics at Yale University and
was a top adviser in the Kennedy administration. He received the Nobel Prize in
Economics in 1981. He is perhaps
best known for applying economic theory to the way people make decisions and for
advocating the Keynesian theory of government intervention in the economy.
Throughout his career, he battled conservative economists like Milton Friedman,
a Nobel laureate at the University of Chicago, who disdained government
intervention. Dr. Tobin regarded his Nobel Prize as a vote of confidence in the
Keynesian theory.
In
his obituary, The New York Times noted, ÒDr. Tobin concluded that investors
were affected by their assessments of how risky their decisions might be and
that they differed in the amount of risk they were willing to take. He explored
the tendency to build portfolios in which risks were balanced against more
secure assets. Earlier analyses frequently oversimplified the behavior, assuming
that investors typically sought the highest return without regard to risk.
But
Dr. Tobin's work, known as the Portfolio Selection Theory, helped increase the
understanding of an investorÕs willingness to hold various assets, the Times
noted. During times of inflation, for instance, he found them less willing to
hold stock or cash, turning instead to bonds or physical assets like real
estate.
In
an update to his Yale webpage several months before his death in early 2002, Dr.
Tobin said, "In my career as an economist beginning in 1939, I have done
research and writing in several fields: macroeconomics theory and policy; money
and banking; public finance; consumer behavior; welfare economics; rationing;
portfolio selection and asset markets (commonly known as the "q"
ration), economic growth; investment and capital accumulation; inequity and
public policy to ameliorate poverty (the so-called negative income tax);
econometric method (the Tobin analysis); and international monetary systems
(related to the so-called "Tobin Tax".)
He added that at the time, his active interests related to social security and medical care as well as international monetary reform. Dr. Tobin was the author of some 500 articles and 16 books.