Born In: Champaign, Illinois, United States
James Tobin was an economist best known for his contributions to the theoretical formulation of investment behaviour. He further developed the ideas of Keynesian economics and proposed an econometric model for censored dependent variables. The son of a journalist and a social worker, he was raised in an intellectually stimulating atmosphere. He became aware of social problems early on and developed compassion for the underprivileged citizens of the world. A good student, he entered Harvard University on a scholarship. During his university years, he developed a keen interest in Keynesian economics and proceeded to earn his Ph.D. with a thesis on the consumption function. He spent World War II as an officer on a destroyer in the US Navy. He resumed his career in economics after the war and took up a job at Yale University. He also served on the Council of Economic Advisers and was a consultant to the Board of Governors of the Federal Reserve System. He was awarded the Nobel Memorial Prize in Economic Sciences in 1981. He was actively involved in public life and was a fellow of several professional associations. He is regarded by many economic scholars as the most distinguished American Keynesian economist.
Died At Age: 84
Spouse/Ex-: Elizabeth Fay Ringo
father: Louis Michael Tobin
mother: Margaret Edgerton Tobin
children: Hugh Ringo, Louis Michael, Margaret Ringo, Roger Gill
Born Country: United States
place of death: New Haven, Connecticut, United States
U.S. State: Illinois
education: University Laboratory High School, Harvard University
awards: 1955 - John Bates Clark Medal
1981 - Nobel Prize in Economics
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James Tobin was born on March 5, 1918, in Champaign, Illinois, to Louis Michael Tobin and Margaret Edgerton Tobin. His father was a journalist who had fought in World War I. He was a member of the first Greek organization at Illinois, the Delta Tau Delta fraternity. His mother was a social worker.
After completing primary school, he joined the University Laboratory High School of Urbana, Illinois. It was a small but good school where the young boy thrived. He played on the varsity basketball team and excelled in academics as well.
On his father’s advice, James Tobin appeared for the entrance exams for Harvard University. Even though he did not undergo any special tuition for the tests, he managed to pass and received a national scholarship.
He delved deep into economics during his university years and graduated summa cum laude in 1939. His senior thesis was a critical analysis of Keynes' mechanism for introducing equilibrium involuntary unemployment. He furthered his education at the same institution and earned his master’s degree in 1940.
James Tobin took a break from his studies to join the Office of Price Administration and Civilian Supply and the War Production Board in 1941. The following year, the United States entered World War II, and he joined the US Navy Reserve.
He spent 90 days training to be a naval officer in a Columbia University dormitory and spent around four years as a line officer on the destroyer U.S.S. Kearny. He eventually rose through the ranks, first becoming a gunnery officer and then navigator and executive officer.
His ship was mostly engaged in convoy escort and other anti-submarine duty mainly in the Atlantic and Mediterranean regions. He also participated in the Italian campaign and the invasions of North Africa and Southern France. He valued his wartime experiences.
After the war ended, he returned to Harvard and resumed his work on his doctorate. He earned his Ph.D. in 1947. His thesis was on the consumption function. The same year, he was elected a Junior Fellow of Harvard's Society of Fellows.
In 1950, James Tobin joined Yale University as part of their faculty. He became the Sterling Professor of Economics in 1957. He also served as the president of the Cowles Foundation between 1955-1961 and 1964-1965.
He often collaborated with his Yale colleague William Brainard. He was mainly focused on Keynesian economics, particularly monetary economics. A prolific writer, he often wrote on current economic issues.
As an economic expert and policy consultant, he was appointed as a member of John F. Kennedy's Council of Economic Advisors in 1961-62. From 1962 until 1968, he was a consultant with the council. He was pivotal in designing the Keynesian economic policy implemented by the Kennedy administration.
He served as a consultant of the US Treasury Department and was a member of the Board of Governors of Federal Reserve System Academic Consultants as well. He served as the president of the American Economic Association in 1971.
He was Ford Visiting Research Professor of Economics at the University of California, Berkeley in 1982-83. He formally retired from Yale in 1988 but continued to write and deliver lectures.
James Tobin’s q theory is the “ratio between a physical asset's market value and its replacement value.” The concept was first introduced by economist Nicholas Kaldor in 1966. Tobin popularized the theory a decade later.
Another one of his major works is his Tobit model of regression with censored endogenous variables. This model is now considered a standard econometric technique and can be used to study truncated and other non-randomly selected samples.
As a young man, James Tobin fell in love with a girl named Elizabeth Fay Ringo. She was a student at the Massachusetts Institute of Technology (MIT). She accepted his marriage proposal, and the couple tied the knot on September 14, 1946. They had a happy and fulfilling marriage that produced four children, one daughter and three sons.
He died on March 11, 2002, aged 84.
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