Essays in Economics, Volume 3
Theory and Policy
James Tobin - the 1981 Nobel laureate in economics - is one of the principal figures among contemporary American economists. This new collection of his professional papers contains his most recent work, written mainly since 1974. In a period marked by revisionism in economic theory and retrenchment in the public goals of economic policy, Tobin remains committed to the standard he has upheld throughout his professional life. He is an "eclectic Keynesian" in theory whose socioeconomic concern is to reduce poverty, inequality, and discrimination through the maintenance of full employment and economic growth and through such policies as the negative income tax and other income transfers. Part I, Monetary Theory and Policy, includes Tobin's most recent writings on monetary theory and its application to the stagflation economy of the 1970s. Several of these challenge the more extreme theoretical and empirical claims of Milton Friedman's brand of monetarism. Part II, Macroeconomic Fiscal Policies and Economic Growth, takes up the short and long-run effects of alternative polices on output, interest rates, capital formation, and prices. It also examines the impact of technological development on employment, the macroeconomic effects of selective public employment and wage subsidy, the case against constitutional restrictions on fiscal policy, and other issues. Part III, International Monetary Economics, deals with balance of payments adjustments, floating exchange rates, and a proposal for international monetary reform. Part IV, Welfare and Inequality, reaffirms the author's stand on income redistribution and negative income tax in support of humanitarian goals. A final part, Economists, offers portraits and sketches of other economists Tobin has known - Alvin Hansen, Kermit Gordon, Paul Douglas, Harry Gordon Johnson, Milton Friedman, and John Kenneth Galbraith.