SIR James Mirrlees, a Nobel Prize-winning economist, who produced an influential review of the tax system, taught for many years at Oxford University,

Sir James, who has died aged 82, arrived at his conclusions about taxation in the middle of Harold Wilson’s government in the late 1960s.

Looking for a formula to ensure that taxation brings in enough revenue to pay for a range of public services but does not adversely affect certain parts of society, the economist argued that rates of tax that are too high can demoralise taxpayers and encourage them to reduce their productivity.

He became professor of economics at Oxford in 1968, holding that position until 1995, when he moved to Cambridge as professor of political economy. He was knighted in 1997.

Nuffield College has paid tribute to the professor following his death and said he was always known there as ‘Jim’.

He joined the college as a Professorial Fellow in 1968 and was the Edgeworth Professor of Economics until 1995 when he left Oxford to take up the Professorship of Political Economy at Trinity College, Cambridge.

In 1971 Sir James and Peter Diamond published an analysis of income tax schedules, and the formula has been widely used to guide governments in their decision-making about tax levels, and has ushered in a general flattening out and lowering of tax rates.

Sir James’ influential work on taxation culminated in a report for the Institute for Fiscal Studies that bears his name – the Mirrlees Review of 2010.

This recommended a fundamental change both to the way in which taxes were levied and on whom those taxes fall.

But the professor’s work was not restricted to views on taxation.

As an economic theorist he won the Nobel Prize for economics in 1996, alongside William Vickrey, for his work on “information asymmetry” – the idea than an imbalance exists when one party to a transaction, sometimes the buyer but more often the seller, has more information about the product or services being exchanged.

Born in Minnigaff, Dumfries and Galloway, on July 5, 1936, James was the son of George, a bank manager, and his wife, Nan (nee Brown).

After attending Douglas-Ewart high school in Newton Stewart he took an MA in mathematics and natural philosophy at Edinburgh University (1954-57), before studying mathematics and then completing a PhD in economics at Trinity College, Cambridge.

In 1962-63 he was an adviser to the MIT Centre for International Studies in New Delhi, then for five years was an assistant lecturer, then lecturer, in economics at Cambridge University.

At Oxford and Cambridge Prof Mirrlees worked with many who would become significant influences on the political and economic trajectory both of Britain and the rest of the western world. Among them were Joe Stiglitz, Nicholas Stern and John Vickers, who have each had a significant impact on economic and political life since the financial crash of 2008.

Active in economics and education well into his seventies, including as a professor and later master of Morningside College, in Hong Kong, Sir James was also a member of the Scottish government’s council of economic advisers.

He joined the council of advisers when it was established after the SNP came to power at Holyrood in 2007.

Scottish First Minister Nicola Sturgeon said Sir James would be remembered for his “great intellect” and “wonderfully dry sense of humour”.

She added that the economist, was also proud of his Scottish heritage.

Sir James died on August 29.

He is survived by his second wife, Patricia (nee Wilson), whom he married in 2001, and by two daughters from his first marriage in 1961 to Gillian (nee Hughes), who died in 1993.