In This Review

World Finance and Economic Stability: Selected Essays of James Tobin
World Finance and Economic Stability: Selected Essays of James Tobin
By James Tobin
Edward Elgar, 2003, 242 pp

This book gathers recent essays by the late economic Nobelist on major issues of macroeconomics, Tobin's lifelong specialty. It covers a range of domestic and international issues, from the proper formulation of fiscal and monetary policy for high employment and economic growth to global financial crises, the choice of exchange rate policy, and the role of the IMF. Tobin has become something of a celebrity with opponents of globalization for his espousal, three decades ago, of a low tax on all foreign exchange transactions, to put some sand in the wheels of international finance. Tobin would not welcome some of these accolades, since he favored open economies. He simply wanted to reduce purely speculative movements of funds between currencies, which he felt had little social value and disrupted national economies. Here he provides his rationale for the measure and laments his loss of control over what he considered a modest proposal. The essays are written mainly for nonexperts (including an exceptional one for President-elect Kennedy) and are noteworthy for their clarity of purpose and of exposition. They are lucid, clear-headed, and sensible, yet economically sophisticated.