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Each sector is... constrained by its own net worth... The individual economic unit can neither change the legacy of the past nor... affect by... portfolio choices... market valuations of his assets.

— James Tobin A general equilibrium approach to monetary theory (1969)

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More quotes by James Tobin

Keynesian economics was, in the context of those times, essentially conservative.

The rate of investment – the speed at which investors wish to increase the capital stock – should be related, if to anything, to q, the value of capital relative to its replacement cost.

A general equilibrium approach to monetary theory (1969)

In a complete equilibrium... financial inputs to the real side must reproduce the assumed values of the real inputs to the financial side.

A general equilibrium approach to monetary theory (1969)

There is no reason to think that the impact [of monetary policy] will be captured in any single [variable]... , whether it is a monetary stock or a market interest rate.

A general equilibrium approach to monetary theory (1969)

According to [the general equilibrium approach to monetary theory], the principal way in which financial policies and events affect aggregate demand is by changing the valuations of physical assets relative to their replacement costs.

A general equilibrium approach to monetary theory (1969)

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