james tobin

Respect For Identities

27 March 2015

The accounting identities equating aggregate expenditures to production and of both to incomes at market prices are inescapable, no matter which variety of Keynesian or classical economics you espouse. I tell students that respect for identities is the first piece of wisdom that distinguishes economists from others who expiate on economics. The second? … Identities say […]


Reconciliation Of The Supply And Demand For Money

17 March 2014

What brings the supply and demand for money into equivalence? It is interesting that the recent Bank of England quarterly bulletin referred to an article of Peter Howells, a Post-Keynesian (also available here), although I don’t think the authors appreciate why the paper is interesting. The title of my blog post is flicked from a […]


Money Stock Determination

14 March 2014

The recent Bank of England quarterly bulletin has interested blogosphere into what goes on to determine the stock of money. Money can mean various things and here I restrict to the the monetary aggregates as defined by central banks – as in the referred publication. But whoever is interested in “money creation” also becomes interested […]


Bank Of England On Money Creation

12 March 2014

In the natural sciences, controversies are settled in a few months, or at a time of crisis, in a year or two, but in the social so-called sciences, absurd misunderstandings can continue for sixty or a hundred years without being cleared up. – Joan Robinson, 1981 (1979), What Are The Questions And Other Essays – Further Contributions To […]


Tobinesque Models

15 February 2014

Paul Krugman writes today on his blog on James Tobin’s work: Let me offer an example of how this ended up impoverishing macroeconomic analysis: the strange disappearance of James Tobin. In the 1960s Tobin developed and elaborated a sophisticated view(pdf) of financial markets that offered insights into things like the role of intermediaries, the effects of […]


On Models

12 January 2014

Ryan Decker has a blog post on DSGE models. Although I don’t like DSGE models, I think he has something nice to say about modeling: We must get econ pundits to understand that we’re all using models, including non-economist bloggers, even if they’re not written down as mathematical expressions. Writing a model down in its […]


Happy Diwali

2 November 2013

picture via bluemountain.com James Tobin’s papers are very interesting. I have a special liking for him even though he sometimes said strange things and used a lot of neoclassical analysis. His asset allocation theory is one of the most interesting things in monetary economics. I came across this paper from his book Essays In Economics – […]


James Tobin Already Knew The Answer

19 October 2013

Question: Are flexible exchange rates better than fixed exchange rates? Answer: Silly oversimplified question. In a blog post today, Paul Krugman asks Do Currency Regimes Matter? – in the context of the Euro Area. My answer to that would be James Tobin’s wisecrack: I believe that the basic problem today is not the exchange rate regime, […]


On Effects Of QE

30 September 2013

I am having a discussion on the effects of the Federal Reserve’s Large Scale Asset Purchases (“QE”) especially on the money stock with someone online. Here are some thoughts. First we have to be crystal clear that there is no direct causality from money to prices of goods and services. Now, as I highlighted in […]


Wynne Godley: The Keynes Of Flow Of Funds

13 September 2013

Monetary and financial data, so far as they are based on institutional balance sheets and prices in organized markets, are abundant. Modern machines have made it possible to improve, refine and expand the compilation of these data, and also to seek empirical regularities in financial behavior in the magnitude of individual observations. On the aggregate […]