James Tobin

Tobin's q; portfolio-selection theory.

James Tobin was a professor of economics at Yale University and recipient of the Nobel Memorial Prize in Economic Sciences in 1981. His portfolio-selection theory formalised how investors balance risk and return across asset classes, extending Markowitz into general equilibrium. He is equally known for Tobin's q, the ratio of a firm's market value to the replacement cost of its assets, which became a standard tool for gauging investment incentives.