James Tobin

Liquidity Preference as Behavior Towards Risk

One of basic functional relationships in the Keynesian model of the economy is the liquidity preference schedule, an inverse relationship between the demand for cash balances and the rate of interest. This aggregative function must be derived from some assumptions regarding the behavior of the decision-making units of the economy, and those assumptions are the concern of this paper.

Inflation and Unemployment

The world economy today is vastly different from the 1930s, when Seymour Harris, the chairman of this meeting, infected me with his boundless enthusiasm for economics and his steadfast confidence in its capacity for good works. Economics is very different, too. Both the science and its subject have changed, and for the better, since World War II. But there are some notable constants. Unemployment and inflation still preoccupy and perplex economists, statesmen, journalists, housewives, and everyone else. The connection between them is the principal domestic economic burden of presidents and prime ministers, and the major area of controversy and ignorance in macroeconomics. I have chosen to review economic thought on this topic on this occasion, partly because of its inevitable timeliness, partly because of a personal interest reaching back to my first published work in 1941.

Crystal structure of the B7-1/CTLA-4 complex that inhibits human immune responses.

Optimal immune responses require both an antigen-specific and a co-stimulatory signal. The shared ligands B7-1 and B7-2 on antigen-presenting cells deliver the co-stimulatory signal through CD28 and CTLA-4 on T cells. Signalling through CD28 augments the T-cell response, whereas CTLA-4 signalling attenuates it. Numerous animal studies and recent clinical trials indicate that manipulating these interactions holds considerable promise for immunotherapy. With the consequences of these signals well established, and details of the downstream signalling events emerging, understanding the molecular nature of these extracellular interactions becomes crucial. Here we report the crystal structure of the human CTLA-4/B7-1 co-stimulatory complex at 3.0 Å resolution. In contrast to other interacting cell-surface molecules, the relatively small CTLA-4/B7-1 binding interface exhibits an unusually high degree of shape complementarity. CTLA-4 forms homodimers through a newly defined interface of highly conserved residues. In the crystal lattice, CTLA-4 and B7-1 pack in a strikingly periodic arrangement in which bivalent CTLA-4 homodimers bridge bivalent B7-1 homodimers. This zipper-like oligomerization provides the structural basis for forming unusually stable signalling complexes at the T-cell surface, underscoring the importance of potent inhibitory signalling in human immune responses.

On Limiting the Domain of Inequality

THE most difficult issues of political economy are those where goals of efficiency, freedom of choice, and equality conflict. It is hard enough to propose an intellectually defensible compromise among them, even harder to find a politically viable compromise. These are ancient issues. The agenda of economics and politics have always featured policies whose effects on economic inequality and on efficiency in resource allocation are hopelessly intertwined. But it is only in the last five years that they have regained the center of attention of American economists, with whom stabilization, full employment, and growth took the highest priority for the preceding three decades. When a distinguished colleague in political science asked me about ten years ago why economists did not talk about the distribution of income any more, I followed my pro forma denial of his factual premise by replying that the potential gains to the poor from full employment and growth were much larger, and much less socially and politically divisive, than those from redistribution. One reason that distribution has returned to the forefront of professional and public attention is that great progress was made in the postwar period, and especially in the 1960s, toward solving the problems of full employment and growth. It is natural that debate should now focus on intrinsically harder issues of the composition and distribution of the national product, and it is also natural, though disappointing, to find people with short memories questioning whether full employment and growth ever were problems worth worrying about. There are of course other reasons for the recent shift of emphasis, notably the belated commitment of the society to racial equality and the diffuse concern for social justice that is one feature of the cultural revolution of the young. American attitudes toward economic inequality are complex. The egalitarian sentiments of contemporary college campuses are not necessarily shared by the not-so-silent majority. Our society, I believe, accepts and approves a large measure of inequality, even of inherited inequality. Americans commonly perceive differences of wealth and income as earned and

Money and Finance in the Macroeconomic Process

Prize Lecture to the memory of Alfred Nobel, December 8, 1981(This abstract was borrowed from another version of this item.)(This abstract was borrowed from another version of this item.)

Money and Income: Post Hoc Ergo Propter Hoc?

An ultra-Keyniesian model, 303. — A Friedman model, 310. — Comparisons of timing implications, 314.

Stabilization Policy Ten Years After

WHEN the Brookings panel first met ten years ago, the U.S. governments managers of aggregate demand were cooling an economy suffering from an inflation 4 points higher than ten years before. The unemployment rate was 4.5 percent. Four years later, at the time of the panels thirteenth meeting, the demand managers were cooling an economy suffering from an inflation 6 points higher still. The unemployment rate was 5 percent. As the panel meets today, the governments managers of aggregate demand are cooling an economy suffering from an inflation 7 points higher than ten years before. The unemployment rate is 7 percent and rising. Higher inflation, higher unemployment-the relentless combination frustrated policymakers, forecasters, and theorists throughout Lhe decade. The disarray in diagnosing stagflation and prescribing a cure makes any appraisal of the theory and practice of macroeconomic stabilization as of 1980 a foolhardy venture. The patent breakdown of consensus spares me the task of seeking and describing collective views. I will just give my own observations and confess my own puzzlements. In one respect demand-management policies worked as intended in the 1970s. On each of the occasions I described at the beginning, the man-

Neoclassical Growth with Fixed Factor Proportions

We analyze in this paper a completely aggregated model of production in which output is produced by inputs of homogeneous labor and heterogeneous capital goods, and allocated either to consumption or to use as capital goods. Allocations are irreversible: capital goods can never be directly consumed. Fixed coefficients rule: any concrete unit of capital has a given output capacity and requires a given complement of labor. Technological progress continuously differentiates new capital goods from old. But we assume that the “ latest model ” in capital goods has no smaller capacity and no higher labor requirement than any older-model capital goods with the same reproduction cost. Thus each instant’s gross investment will take the form of the latest-model capital. There is no problem of the optimal “ depth ” of capital. The main effect of an increase in gross investment is to modernize the capital stock in use.

Molecular identification of microsomal acyl-CoA:glycerol-3-phosphate acyltransferase, a key enzyme in de novo triacylglycerol synthesis

Acyl-CoA:glycerol-3-phosphate acyltransferase (GPAT) catalyzes the first step during de novo synthesis of triacylglycerol. It has been well recognized that mammals possess multiple enzymatically distinct proteins with GPAT activity. Although the mitochondrial-associated GPAT has been cloned and extensively characterized, the molecular identity of the endoplasmic reticulum (ER)-associated GPAT, which accounts for the majority of total GPAT activity in most tissues, has remained elusive. Here we report the identification of genes encoding human and mouse ER-associated GPAT (termed GPAT3). GPAT3 is a member of the acyltransferase family predominantly expressed in tissues characterized by active lipid metabolism, such as adipose tissue, small intestine, kidney, and heart. Ectopic expression of GPAT3 leads to a significant increase in N-ethylmaleimide-sensitive GPAT activity, whereas acyltransferase activity toward a variety of other lysophospholipids, as well as neutral lipid substrates, is not altered. Overexpression of GPAT3 in mammalian cells results in increased triacylglycerol, but not phospholipid, formation. GPAT3 is localized to the ER when overexpressed in COS-7 cells. GPAT3 mRNA is dramatically up-regulated during adipocyte differentiation, is reciprocally regulated in adipose tissue and liver of ob/ob mice, and is up-regulated in mice treated with a peroxisome proliferator-activated receptor γ (PPARγ) agonist. A substantial loss of GPAT activity in 3T3-L1 adipocytes was achieved by reducing GPAT3 mRNA levels through GPAT3-specific siRNA knockdown. These findings identify GPAT3 as a previously uncharacterized triacylglycerol biosynthetic enzyme. Similar to other lipogenic enzymes, GPAT3 may be useful as a target for the treatment of obesity.

Charged residues dominate a unique interlocking topography in the heterodimeric cytokine interleukin-12.

Human interleukin‐12 (IL‐12, p70) is an early pro‐inflammatory cytokine, comprising two disulfide‐linked subunits, p35 and p40. We solved the crystal structures of monomeric human p40 at 2.5 Å and the human p70 complex at 2.8 Å resolution, which reveals that IL‐12 is similar to class 1 cytokine–receptor complexes. They also include the first description of an N‐terminal immunoglobulin‐like domain, found on the p40 subunit. Several charged residues from p35 and p40 intercalate to form a unique interlocking topography, shown by mutagenesis to be critical for p70 formation. A central arginine residue from p35 projects into a deep pocket on p40, which may be an ideal target for a small molecule antagonist of IL‐12 formation.