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James Tobin: 2 ideas worth knowing

2 ideas from James Tobin, each explained in a minute and credited to the original work. Free on Savvy.

• One ratio tells a company whether it's cheaper to build a factory or buy a rival's

  Tobin's Q divides a firm's market value by the replacement cost of its physical assets. A Q above one means the market values the company for more than rebuilding it would cost, so…

  — James Tobin, A General Equilibrium Approach to Monetary Theory

• An economist proposed taxing every currency trade to slow down panic

  In 1972, Nobel laureate James Tobin proposed a small tax on international currency transactions, aimed not at raising revenue but at making rapid speculative in-and-out trading sli…

  — James Tobin, The New Economics One Decade Older

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