The Economics Book

DIRECTORY 337

the field of information economics.

In 1982, he won the Nobel Prize.

See also: Searching and matching

304–05

JAMES TOBIN

1918–2002

James Tobin was born in Illinois and

is popularly known today for the

so-called “Tobin tax” that he

devised to discourage speculation

in currency transactions. Tobin is

better known to economists as an

advocate of Keynesian economics

and for his academic work on

investment and fiscal (tax) policy.

Tobin went to Harvard University

in 1935, where he met John

Maynard Keynes. In 1950, he

took up a teaching post at Yale,

remaining there for the rest of his

life. As a consultant to the Kennedy

administration he helped to shape

US economic policy throughout the

1960s, and in 1981 he won the

Nobel Prize.

See also: Depressions and

unemployment 154–61 ■ The

Keynesian multiplier 164–65

ALFRED CHANDLER

1918–2007

Born in Delaware, Alfred Chandler

graduated from Harvard University

in 1940. After serving in the US

Navy in World War II he wrote

his PhD thesis on management

structures, based on documents

left to him by his great-grandfather,

the financial analyst Henry

Varnum Poor. From the 1960s on

he focused his attention on

managerial strategy and the

organization of large corporations.

He wrote a large number of books,

and his 1977 work, The Visible

Hand, won the Pulitzer Prize.

The book described the rise of

large-scale corporations as a

“second industrial revolution.”

See also: Economies of scale 132

ROBERT LUCAS

1937–

One of the most influential

economists of the Chicago School

of economics, Robert Lucas is also

one of the founders of new classical

macroeconomics. He studied at

Chicago University and has been

a professor there since 1974.

He overturned Keynesian ideas,

and his research into rational

expectations (the idea that because

people make well-informed, rational

decisions, their actions can alter

the intended course of government

policy) influenced monetary policy

during the 1980s.

See also: Rational expectations

244–47

EUGENE FAMA

1939–

A third-generation Italian-American,

Eugene Fama was the first in his

family to go to college. He initially

studied French but became

fascinated by economics. He was

awarded a scholarship to study for

a PhD at the University of Chicago,

where he has taught ever since.

He is best known as the originator

of the efficient market hypothesis,

which says that in any market

with many, well-informed traders,

the price reflects all the available

information. He is also known

for demonstrating the correlation

between market efficiency

and equilibrium.

See also: Efficient markets 272

teaching at Columbia and Princeton
universities. With Paul Rosenstein-
Rodan (p.336) he established the
modern field of development
economics, and was an advocate
of the “Big Push” theory.
See also: Development economics
188–93

JOHN KENNETH

GALBRAITH

1908–2006

Born in Ontario, Canada, John
Kenneth Galbraith studied economics
in Canada and the US. He later
taught at Cambridge University, UK,
where he was greatly influenced by
John Maynard Keynes (p.161).
During World War II he was deputy
head of the US government Office
of Price Administration, but his
advocacy of permanent price
controls led to his resignation in

1943. He worked as a journalist,
      academic, and economic adviser
      to President John F. Kennedy and
      gained a popular readership in 1958
      with his book The Affluent Society.
      See also: Conspicuous
      consumption 136

GEORGE STIGLER

1911–91

Greatly influenced by Frank Knight
(p.163), his PhD supervisor at
Chicago University, George Stigler
went on to become a leading
member of the Chicago School of
economists, working with his
friend and contemporary Milton
Friedman (p.199). Known for his
research into the history of
economic thought, he also worked
in the field of public choice theory
(analysis of government behavior),
and was one of the first to explore