“The rate of investment – the speed at which investors wish to increase the capital stock – should be related, if to anything, to q, the value of capital relative to its replacement cost.”

— James Tobin

Source: "A general equilibrium approach to monetary theory" (1969), p. 21 as cited in: Sılvio Rendon, "Non-Tobin’s q in Tests for Financial Constraints," 2009

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James Tobin 22

American economist 1918–2002

Kenneth E. Boulding (1910–1993) British-American economist

Source: 1940s, The theory of the firm in the last ten Years, 1942, p. 793 cited in: Pedro Garcia Duarte (2010) " A Path through the Wilderness: Time Discounting in Growth Models http://public.econ.duke.edu/~staff/wrkshop_papers/2009-2010_Papers/PGDuarte_Path_Through_Wilderness.pdf"

John F. Kennedy (1917–1963) 35th president of the United States of America

1962, Address and Question and Answer Period at the Economic Club of New York (549)

“I can now present the first fundamental law of capitalism, which links the capital stock to the flow of income from capital. The capital/income ratio β is related in a simple way to the share of income from capital in national income, denoted α. The formula is
α = r × β
Where r is the rate of return on capital.
For example, if β=600% and r = 5%, then α = r × β = 30%.
In other words, if national wealth represents the equivalent of six years of national income, and the rate of return on capital is 5 percent per year, then capital’s share in national income is 30 percent.”

Thomas Piketty book Capital in the Twenty-First Century

Source: Capital in the Twenty-First Century (2013), p. 52.

“The intention of the US found its feature through a clear formulation in the Agreement for the IBRD. The “purposes of the Bank” were defined as follows: “To promote private foreign investment by means of guarantees or participations in loans and other investments made by private investors; and when private capital is not available on reasonable terms, to supplement private investments by providing, on suitable conditions, finance for productive purposes out of its own capital, funds raised by it and its other resources””

Nico Perrone (1935) Italian historian and writer

Source: The international economy from a political to an authoritative drive, p. 130

“If the country is to flourish, capital must be invested in enterprise. But those who seek to draw upon other people's money must be wholly candid regarding the facts on which the investor's judgment is asked.”

Franklin D. Roosevelt (1882–1945) 32nd President of the United States

Statement on Signing the Securities Bill http://www.presidency.ucsb.edu/ws/index.php?pid=14654 (27 May 1933)
1930s

“The monetary history of the last four hundred years has been replete with financial crises. The pattern was that investor optimism increased as economies expanded, the rate of growth of credit increased and economic growth accelerated, and an increasing number of individuals began to invest for short-term capital gains rather than for the returns associated with the productivity of the assets they were acquiring. The increase in the supply of credit and more buoyant economic outlook often led to economic booms as investment spending increased in response to the more optimistic outlook and the greater availability of credit, and as household spending increased as personal wealth surged.”

Charles P. Kindleberger (1910–2003) American economic historian

Manias, Panics, and Crashes: A History of Financial Crises (1978), Ch. 13 : The Lessons of History and the Most Tumultuous Decades Ever

“Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The Government has already taken major steps this year to reduce business tax liability and to stimulate the modernization, replacement, and expansion of our productive plant and equipment. [...] For all these reasons, next year's tax bill should reduce personal as well as corporate income taxes, for those in the lower brackets, who are certain to spend their additional take-home pay, and for those in the middle and upper brackets, who can thereby be encouraged to undertake additional efforts and enabled to invest more capital.”

John F. Kennedy (1917–1963) 35th president of the United States of America

Source: 1962, Address and Question and Answer Period at the Economic Club of New York

“The investor has the benefit of the stock market's daily and changing appraisal of his holdings, for whatever that appraisal may be worth, and, second, that the investor is able to increase or decrease his investment at the market's daily figure—if he chooses. Thus the existence of a quoted market gives the investor certain options which he does not have if his security is unquoted. But it does not impose the current quotation on an investor who prefers to take his idea of value from some other source.”

Benjamin Graham (1894–1976) American investor

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 41

“What capital I give for the spade merely replaces what the manufacturer had already invested in the expectation that the spade would be needed.”

William Stanley Jevons The Theory of Political Economy

Source: The Theory of Political Economy (1871), Chapter VII, Theory of Capital, p. 188.

“When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”

Thomas Piketty book Capital in the Twenty-First Century

Source: Capital in the Twenty-First Century (2013), p. 1.

“The rate of investment – the speed at which investors wish to increase the capital stock – should be related, if to anything, to q, the value of capital relative to its replacement cost.”

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