By Steve Schifferes BBC News Online economics reporter

James Tobin, the Nobel-prize winning economist who first proposed a tax on currency speculators, has died at the age of 84.

Mr Tobin was one of the last of Keynesian economists and a former economic advisor to President John F Kennedy who advocated tax cuts in the United States to boost economic growth.

Professor Tobin: They have hi-jacked my name

His death comes on the eve of a major effort by third-world development groups to force the Tobin tax onto the agenda of a major economic summit in Monterrey, Mexico, which opens next week.

Wednesday has been designated "Tobin tax day" by War on Want, which argues that "the Tobin tax is an idea whose time has come".

It says that levying a charge on foreign currency transactions could help bolster the economy of poor countries, and add funds which could be used for development.

"The tax is now accepted as a key element in the fight against global poverty, " says War on Want's Steve Tibbett, who adds that parliaments in Belgium and France have already backed the idea, as has the French pressure group Attac.

Tobin disagrees

Ironically, Professor Tobin, who had taught at Yale University for 50 years, was sceptical of the use advocates were making of his proposal.

In an interview in September, he said that his name had been "hi-jacked" by anti-globalisation protesters with whom he had "nothing in common".

Professor Tobin said that his tax on foreign currency speculation was designed to help central banks in small countries control their own currencies, not raise money for development.

And he defended the measure as perfectly compatible with the approach of John Maynard Keynes, who was instrumental in establishing the international financial institutions such as the International Monetary Fund and the World Bank.

Mr Tobin said that he first proposed his tax - which would charge currency traders a small percentage of each transaction - when the world abandoned fixed exchange rates in 1971.

Keynes' disciple

Mr Tobin's most lasting achievement was to help bring the Keynesian revolution to the United States, where he advocated a degree of government intervention to stabilise markets.

He served as an influential member of the Council of Economic Advisors to President Kennedy, and advocated a modest tax cut to boost economic growth.

He was not in favour of the recent tax cuts by the Bush administration, however, and also found the monetarist approach of Margaret Thatcher not to his liking.

Professor Tobin was also famous for his theory of investment, based on 'portfolio theory', which holds that diversification of interests offers the best possibility of security for investors, and that investments should not always be based on highest rates of return.

His measure of company worth, market value divided by asset replacement value, Tobin's Q, is still seen of one of the best measures of whether a company is over-valued or under-valued, and has been given new relevance by the collapse of high-tech and dot.com stocks.

It was this work that earned him the Nobel Prize in economics in 1981.