FULL EMPLOYMENT AND GROWTH

James Tobin
Edward Elgar Publishing Company, 1996

Preface

In Policies for Prosperity: Essays in a Keynesian Mode (Wheatsheaf Books, 1987) I published a collection of policy-oriented essays written between 1973 and 1986. The economic events that dominated those years were the two big shocks to oil supplies and prices, the resulting stagflations and recessions, the slowdown in growth and productivity in Europe, North America, and Japan, and the incomplete recoveries of the 1980s. Accompanying these events were important developments and controversies in government policies, notably Thatcherism, Reaganomics, monetarism and supply-side fiscalism. Parallel movements and debates occurred in the economics profession, with 'new classical' doctrines challenging the mainstream Keynesian teachings of the 1960s. My essays of those years defended Keynesian theories and policies against these attacks.

Those issues did not go away, but new political and economic events brought new challenges to economic policy and to economics in the years following. I did not go away either, and 26 policy-oriented writings — accessible, I hope, to students and general readers — are collected in this book. I am still a Keynesian — a columnist once referred to me as a 'Keynesian who won't quit'. I continue to fight for Keynesian policies and against the extreme revivals of classical economics within my profession. But many of these essays respond to other recent developments, notably the 'globalization' of markets for goods and for finance, the difficulties of transition to capitalism in the former communist economies, and the persistent rise in poverty and inequality in the United States.

Peter Jackson, who encouraged and helped me prepare the 1987 collection, has again earned my gratitude for the same services. Only I am culpable for errors and defects. As always, Yale University, its Department of Economics and its Cowles Foundation for Research in Economics have been generously supportive of my work, despite my formal retirement in 1988. My intellectual debts to my colleagues and students are too numerous to list. During the preparation of this book and the writing of most of its contents, the secretaries who faithfully assisted were Arlene Gianforte, Lois Jason and Marian Daly. They deserve my thanks, as do my stellar undergraduate assistants Greg Back, Andrew Metrick, Austan Goolsbee, Mitchell Tobin (no relation), Vassil Konstantinov and Serkan Savasoglu.