Month: December 2016

Categories
Columbia Curriculum

Columbia. Comments on Programs of Study in Economics and Business. Shoup, 1944

The Columbia Provost, Frank D. Fackenthal, must have sent out a request to department chairs to answer a set of questions regarding their departments’ educational programs early in 1944. I have found a copy of a letter dated April 10, 1944 in which Carl S. Shoup (1902-2000) provides his reply in which he was able to comment both on graduate economics as well as business education. Shoup refers to an “accompanying memorandum” in which his thoughts are spelled out more precisely. That memorandum was not filed with the copy of the letter I found, so it must be left to another archival visit to see if there might not be some copy filed elsewhere.

Note to self (or others): the “accompanying memorandum” might be found in Provost Fackenthal’s papers.

____________________

Letter to Provost Frank D. Fackenthal from Professor Carl Shoup on the educational programs in economics and business at Columbia University
April 10, 1944

COPY
[Omitting some minor points, as explained in letter to Professor Mills, April 18, 1944]

April 10, 1944

Mr. Frank D. Fackenthal
Provost of the University
Low Memorial Library

Dear Mr. Fackenthal:

This letter and the accompanying memorandum are in reply to your request of February 18 for suggestions on the educational program of the University.

It so happens that during some spare moments last summer and fall when I was in Washington with the Treasury Department, I drew up a memorandum on graduate instruction in the American universities in the fields of economics and public finance, with special but not exclusive reference to Columbia. I had for some time been of the opinion that the training given to graduate students was falling short of what it might accomplish, and this memorandum was an attempt to systematize my thoughts. Upon returning to Columbia I found that Professor Mills, as head of the Department of Economics, was planning to appoint a curriculum committee and also hold a series of Department meetings in which the curriculum of the Department would be analyzed and suggestions for improvement made. I showed him my memorandum, and he thought it advisable to circulate mimeographed copies among the members of the Department. Since this memorandum contains most of what I have to say on the educational program, I am enclosing a copy; but I also add a few remarks below, addressed more specifically to some of the questions raised in your letter, and to Columbia rather than graduate schools in general.

My remarks here and in the mimeographed memorandum, rest upon three general assumptions: (1) that graduate students in economics and public finance are willing and even eager to assume a more responsible and professional attitude toward their work, which involves more hours of work and more intense work, the satisfying of more exacting standards in examination, and a realization of the damage they can cause if they go into government or private research, or teaching, without adequate training; (2) that many, perhaps most, faculty members (including certainly myself) have not been fully aware how small have been our direct efforts to challenge the graduate student to higher standards, and to help him reach them, perhaps because we have to readily assumed that by continually improving ourselves through research and study we could help the mature student about as well as we could in any other way; (3) that, finally, there is indeed no real conflict between this value we customarily put on faculty research and the producing of highly trained graduate students, but that the faculty member’s research experience needs to be made more available to the graduate student through participation by the latter at least some of the research carried on by the faculty. Unfortunately for the chances of formulating a specific program, I have not yet been able to devise a mechanism (to train the graduate by participation in research) that will be highly effective in a graduate department which, like Columbia’s, already has a long history of development along somewhat different lines. It may be that the idea is impracticable except for a graduate department that is founded primarily with this end in view. The problem of mechanism is discussed in some detail in the accompanying memorandum. In any case it would be essential to guard against the development of the research work into an element of so-called (“prestige” whereby it became necessary to grind out a certain amount of published product regularly for the public view. The results should be good enough to warrant publication, but not on any monthly or other periodic schedule.

To turn out to the specific subjects suggested in your letter of February 18, 1944:

            (1) Comment on the Department of which I am a member (I am a member of the School of Business and also of the Faculty of Political Science).

(A) The most troublesome problem facing the graduate Economics Department in curriculum construction is in my opinion caused by the wide variety in background and in aims of our graduate students. The difficulty takes this specific form: shall we introduce so-called “first graduate-year courses” (or “intermediate courses”) in subjects like public finance, international trade, and monetary theory, for students who have had few if any undergraduate courses in economics, or who, having majored in economics, have not had courses in one or more of these particular subjects? There are diverse views on the principles we should follow, but my present inclination – subject to change, of course, as we debate the matter further – is that we cannot do work on this intermediate level without forgoing a good deal of work on the higher level, and that we therefore should not attempt to make good the undergraduate’s course deficiencies except by special reading assignments and special examinations. If we had a much larger faculty, we might be able to offer a satisfactory selection of “intermediate” courses without decreasing our advanced offerings. Even so, I should doubt the desirability of going far in that direction. Before we realized it, we might find ourselves taking over much of the work of undergraduate colleges. From a long run point of view, the effect would be to weaken undergraduate work, not strengthen it.

The School of Business is revamping its entire curriculum. I am a member of a central curriculum committee that has been appointed to suggest what changes should be made, and since we are in the middle of our deliberations at the moment, I have nothing specific to report at this time. I am also a member of a curriculum sub-committee of the Department of Economics, but this sub-committee is awaiting the close of a series of conferences now being held by the Department, before assembling to consider whether specific changes in the curriculum should be recommended.

(B) I believe that it might be good practice for the Department of Economics and the School of Business to appoint a two or three-man committee to become thoroughly acquainted with the record, and to assess the possibilities of, any individual – within or outside the University – who is suggested as a possible member of the Department. This small committee would make an extended report to the Department after some period of time, perhaps six months or so. I think we need some much practice as this to avoid letting ourselves drift into accepting someone largely because there is a general impression that he seems to be the best one readily available at the moment. Perhaps it would be better to appoint a small committee whenever there is a vacancy, with the instructions to search carefully throughout the country to find the best possible prospect and to report back a year later. It is, I think, worth our while to take unusual pains in this respect, for the University has great pulling power, and should not waste it.

(C) As to relations with other departments, the major point, both for the School of Business and for the Department of Economics, is the relation between these two. Fortunately, the two faculties are keeping in close touch with each other. There is almost surely substantial duplication of effort at the present time, more of it than is desirable in some fields, especially, in my opinion, in money and credit theory. It is to be hoped that the two curriculum committees will suggest ways of eliminating needless duplication.

(D) I know very little about present methods of finding, and opening the way for, the brilliant student in the undergraduate group who should devote himself to scholarship and research, but I suspect that the supply of brilliant scholars could be substantially increased if some general effort were made to call to the attention of A-grade undergraduates the possibilities of careers and research and in college or university teaching.

(E) I have no suggestions on scholarships and fellowships, since I happen to have had very little to do with choosing from among the candidates or with examining the general system of selection.

 

            (2) Comment on the programs of study.

(A) In my opinion the program both of the School of Business and the Graduate Department of Economics have lacked sufficiently definite aims and standards, in standards sufficiently high. There is no specific suggestion I should want to venture at the moment, pending completion of the discussions in our two curriculum committees, but some of the suggestions and the accompanying mimeographed memorandum will indicate in a general way what I have in mind. We do not want rigidity in curriculum and teaching; indeed, we need experimentation, but it needs to be experimentation by the department or school as a whole, with some agreement on what we are trying to do. During the 1930’s, particularly, I have the impression that both the School of Business and the Economics Department rather drifted along, each faculty member being concerned chiefly with his own work as it affected himself, not in its relation to the group as a whole (at least I am sure I fell into that habit). We are beginning to overcome this tendency, as a result of frequent group meetings, but the former attitude has become so deeply ingrained in us that I am not optimistic for the future unless there is somewhat more concerned over the problem of training the graduate student then I have noticed thus far. The lack of regimentation, the freedom given at Columbia to each faculty member to go his own way, is a fine thing in we must of course be careful not to decrease it much, if at all. It is a prerequisite for outstanding work in research. The group action that I have particularly primarily in mind is designed rather (1) to provoke in each of us a greater feeling of individual responsibility for (a) ascertaining what our shortcomings are with respect to the training of graduate students and (b) using our imagination to devise improvements; and (2) to create the mechanism for cooperative effort where cooperative effort is deemed essential to making the improvements. But if the group action – in the form of the group discussions we are now engaged in – turns out not to have the effect described in objective (1) above, it would be dangerous to try to move on rapidly to objective (2). A widespread and fairly strong sense of dissatisfaction with our present degree of achievement in training graduate students is a prerequisite to the success of any thoroughgoing change. It remains to be seen whether such a feeling exists. If the current discussions show that it does not, we must conclude either that after all there is no real ground for substantial change or that the change must start elsewhere.

(B) I do not get the impression that competition with or imitation of the programs of other institutions have lowered our standards or over-extended our efforts. Rather, we have probably failed to learn as much as we should about what other institutions are doing.

(C) There is now – in contrast to the situation some years ago, as noted above – ample opportunity for the general discussion of educational matters.

(D) The faculty members’ participation in outside work has benefited the University. It is essential that a considerable amount of outside work be allowed. Such work has however, in my opinion, been carried well of beyond the optimum point in many cases (including my own). In the accompanying mimeographed memorandum I discuss this problem in some detail. My present opinion is that the University should create “research professorships”. Such professorships would not call for any lowering of the teaching schedule beyond the four hours a week now prevailing in the graduate department (but would call for a change in the School of Business’ minimum of eight hours). Anyone accepting such a professorship would agree to engage in no outside work for pay to himself except, say, during one year out of seven. He would be free to undertake any other outside paid work, but the fees would be paid into the University. Such professorships would carry his salary substantially higher than at present obtain – perhaps 75 per cent to 100 per cent higher at the lower salary levels, and 50 per cent higher at the higher salary levels. (I understand that the University of Chicago is offering, or may shortly offer, contracts on the basis something like that suggested for these “research professorships”).

 

            (3) Comment on the facilities for research.

(A) the School of Business library, through which I work, is, in my opinion, doing an excellent job. My only reservation for the library as a whole has to do with the availability of works in foreign languages. We may need to develop a better system for guarding against gaps here and there, after the war, for I have found some omissions that have hampered my work a little. I am not yet, however, prepared to make any recommendations.

(B) I have not encountered any of the resources of the metropolitan area that were not open to me.

(C) I have had limited experience, especially in recent years, with undergraduate teaching, so had little to say on this subject. My impression is that undergraduate teaching, while not incompatible with research, is not exactly conducive to it.

(D) Probably the most important steps that could be taken to increase the research accomplishment of the University staff are:

(a) Slightly lighter teaching schedules (in the School of Business not the Department of Economics).

(b) The introduction of research professorships as suggested in 2 (D) above.

(c) Full pay for the entire sabbatical year with an understanding of the faculty member will use the time in study or in some activity, paid or not (unless he is on one of the research professorships) of direct importance to his long-term product program of self-development. The present system of granting full pay for a half-year’s leave induces almost everyone to take a half-year leave. In most cases this cost the university more money than the full-year half-paid leave, and results in less uninterrupted time for research.

                       (E) As to sources of financial support I have no suggestions (aside from the fees that would come to the University under the research professors’ outside work (2 (D) above), which would be needed to pay the higher salaries) except the general and perhaps impractical one that the University seek mass support from thousands of middle-class sponsors would contribute regularly say $5 to $25 a year and would receive in exchange reports on the progress of the University, special seating privileges at Commencement, exclusive attendance privileges at occasional special lectures by members of the faculty, and any other marks of attention that could make them feel a sense of part ownership in, and pride in, a great University.

Sincerely yours,

Carl Shoup

 

Source: Columbia University Libraries. Manuscript Collections. Columbia University Department of Economics Collection. Carl Shoup Materials, Box 10, Folder “Columbia University—General”.

Image Source: The Columbia Spectator Archive. March 8, 1967.

Categories
Courses Curriculum Harvard Undergraduate

Harvard. Major Expansion of Economics Course Offerings. 1883

Harvard’s decision to significantly increase its course offerings in political economy in 1883 received some national press coverage (that story posted earlier in Economics in the Rear-View Mirror). Today we have the announcement published in the Harvard Crimson. The trio Charles F. Dunbar, J. Laurence Laughlin and Frank W. Taussig were on their way to launch the take-off into a full academic program of economic study.

______________________

POLITICAL ECONOMY.
Courses of Study for 1883-84.

Harvard Crimson
May 24, 1883

Arrangements recently completed have enabled the college to offer a more extended course of study in Political Economy than that which has been announced. A full statements to be substituted for that given on page 14 of the Elective Pamphlet, will be found below.

On page 15 of the pamphlet, line 13, for Course 6 read Course 7.

  1. Mill’s Principles of Political Economy. – Lectures on Banking and the Financial Legislation of the United States. Mon., Wed., Fri., at 9. Prof. Dunbar and Asst. Prof. Laughlin.
  1. History of Economic Theory and a Critical Examination of Leading Writers. – Lectures. Mon., Wed. at 2 and (at the pleasure of the instructor) Fri. at 2. Prof. Dunbar.
  1. Discussion of Practical Economic Questions. – Theses, Tu., Th., at 3, and a third hour to be appointed by the instructor. Assistant Professor Laughlin.
  1. Economic History of Europe and America since the Seven Years’ War. – Lectures. Mon., Wed., Fri., at 11. Professor Dunbar.
    Course 4 requires no previous study of Political Economy.
  1. Economic Effects of Land Tenures in England, Ireland, France and Germany. – Theses. Once a week, counting as a half course. Asst. Professor Laughlin.
  1. History of Tariff Legislation in the United States. – Once a week, counting as a half course. Mr. Taussig.
  1. Comparison of the Financial Systems of France, England, Germany and the United States. – Tu., at 2, counting as a half course. Professor Dunbar.

As a preparation for Courses 2, 3, 5, 6 and 7 it is necessary to have passed satisfactorily in Course 1.

Course 1 is in Examination Group I.; Course 2, in Group V.; Course 3, in Group XII.; Course 4, in Group III.; Course 7, in Group XI.

The first two courses are intended to present the principles of the science, while the remaining five treat the subject in its historical and practical aspects. No. 2 will take up the principal writers of the present day, as Cairns, Carey and George, together with the current literature of the science. No times of recitation have been assigned to courses 5 and 6, as this will be arranged between the instructors and the students choosing the course. The department intend issuing a full descriptive pamphlet describing the different courses, which can be had at the office in a few days.

Image Source:  Charles F. Dunbar (left) and Frank W. Taussig (right) from E. H. Jackson and R. W. Hunter, Portraits of the Harvard Faculty (1892); J. Laurence Laughlin (middle) from Marion Talbot. More Than Lore: Reminiscences of Marion Talbot, Dean of Women, The University of Chicago, 1892-1925. Chicago: University of Chicago (1936).

Categories
Courses Harvard Undergraduate

Harvard. Principles of Economics. Taussig, Andrew and Bullock. 1906-07

The popularity of the introductory course in economics at Harvard led Frank Taussig to establish a structure of two one-hour lectures per week with ca. 15 sections (of about 25 students) taught by four teaching assistants who administered (and presumably then graded) a 20 minute quiz on a week’s reading assignment that would be followed up with a 35-40 minute class discussion. 

Apparently Taussig’s Columbia University colleague, E.R.A. Seligman, asked Taussig how Harvard ran its principles of economics course. Maybe he was just curious to hear whether Harvard was about to adopt his Principles of Economics With Special Reference to American Conditions. In his answer, Taussig clearly stakes his claim to have invented the large lecture with small recitation sections format. 

 

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[Copy of letter from Frank W. Taussig (Harvard)
to E.R.A. Seligman (Columbia)]

Cotuit, Mass.
Aug. 8, 1906

Dear Seligman:-

Our present system in Economics 1, is as follows. There are three exercises a week, of which two are lectures, and the third is for section work, something like what you call a quiz. The lectures are given to all the men in a large lecture hall. During the first half year I give all the lectures; during the second half year it will be given (1906-7) by Andrew and Bullock. For the section work the men are divided into sections of about 30 men each, and meet weekly in separate rooms, and at various hours, in the charge of younger instructors. Each instructor has three to four sections, there are four or five instructors. The first thing at the section meetings is a sort of examination. The question is put on the board and answered in writing during the first twenty minutes; these papers are read and a record kept of the results. The rest of the hour, thirty-five or forty minutes, is given to oral discussion.

Last year we used three text-books, Mill, Walker, and Seager. Specific assignments of reading are made for each week. The lectures cover the same topics as the reading, and the question of the week is on both reading and lectures.

To ensure consistency, the lecturer in charge (for instance myself) meets the younger instructors weekly at a stated hour. Then the questions to be asked by the instructors are submitted for approval, and the work of the week talked over.

This system is of my devising, and has worked better than anything we have tried. It has now been adopted into other large courses, History 1, and Government 1. Any other information I can give you are very welcome to.

I was extremely sorry to hear of your bereavement, and sympathize with you very fully [Seligman’s daughter, Mabel Henrietta died October 30, 1905 at age eleven]. Ripley has returned from Europe. His present address is New London, N. H. I have written a review of your book for our Journal, in which I have said some things that may not please you. But I take it you agree with me that the only object of reviews is to elicit frank statement of opinion. [Taussig’s review of Seligman’s Principles of Economics, Seligman’s Reply and Taussig’s Rejoinder]

Sincerely yours,
F. W. Taussig.

Prof. E.R.A. Seligman,
Lake Placid, N.Y.

_________________________

Course Announcement 1906 (no description)

ECONOMICS
Primarily for Undergraduates

  1. Principles of Economics. Tu., Th., Sat. at 11. Professor Taussig, Asst. Professors Bullock and Andrew, assisted by Messrs. Howland, Lewis, Huse, and Mason.

 

Source: “Announcement of the Course of Instruction offered by the Faculty of Arts and Sciences 1906-07, 2nd edition”. Official Register of Harvard University, Vol. III, No. 15, Aug. 1, 1906. P. 47.

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Course Announcement 1910-11 with Description

INTRODUCTORY COURSES
Primarily for Undergraduates

  1. Principles of Economics. Tu., Th., Sat., at 11. Professor Taussig, assisted by Drs. Huse, Day, and Foerster, and Messrs. Sharfman and Balcom.

Course 1 gives a general introduction to economic study, and a general view of Economics for those who have not further time to give to the subject. It undertakes a consideration of the principles of production, distribution, exchange, money, banking, international trade, and taxation. The relations of labor and capital, the present organization of industry, and the recent currency legislation of the United States will be treated in outline.

The course will be conducted partly by lectures, partly by oral discussion in sections. A course of reading will be laid down, and weekly written exercises will test the work of students in following systematically and continuously the lectures and the prescribed reading.

 

Source: History and Political Science, Comprising the Departments of History and Government and Economics, 1910-11. Official Register of Harvard University, Vol. VII, No. 23, June 21, 1910, p. 52.

Note: The course description is almost a verbatim copy of that for 1902-03, so we can presume the same description for 1906-07.

_________________________

Course Enrollment 1906-07

  1. Professor Taussig and Asst. Professors Bullock and Andrew, assisted by Messrs. Martin, Mason, G.R. Lewis, Huse, and Holcombe,–Principles of Economics.

Total 392: 1 Graduate, 15 Seniors, 43 Juniors, 252 Sophomores, 50 Freshmen, 31 Other.

 

Source: Harvard University. Reports of the President and the Treasurer of Harvard College, 1906-07, p. 70.

Image Source: Harvard Class Album, 1906.

 

Categories
Courses Exam Questions Problem Sets Syllabus

MIT. Core Microeconomic theory III. Hal Varian, 1975

Hal R. Varian, chief economist at Google since 2007, was a 28 year old assistant professor at M.I.T. in 1975 when he taught my cohort the third in a sequence of four half-term courses that constituted MIT’s required core of graduate microeconomic theory. He assigned draft chapters from his graduate textbook Microeconomic Analysis (published in 1977). For this post I have transcribed the course outline, five problem sets and the final examination for the course.

Core microeconomic theory at MIT in 1974-75:

14.121 (linear models and production) was taught by Martin Weitzman,
14.122 (competitive and noncompetitive market structures) taught by Robert L. Bishop,
14.123 (theory of the consumer and resource allocation) was taught by Hal Varian,
14.124 (capital theory, uncertainty and welfare economics) was taught by Paul Samuelson.

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14.123—Microeconomic Theory III
Theory of the Consumer and Resource Allocation

Professor Hal R. Varian, E52-353, 3-2662
Spring, 1975

Feb. 5 advanced placement exam
Feb. 10 utility; demand; expenditure
Feb. 12 indirect utility; Slutsky equation
Feb. 17 no class
Feb. 19 no class
Feb. 24 demand functions; duality
Feb. 26 expected utility; properties
Feb. 28 general equilibrium; existence
Mar. 3 welfare theory
Mar. 5 the core of an exchange economy
Mar. 10 general equilibrium and production
Mar. 12 dynamics and general equilibrium
Mar. 17 malfunctions of the market mechanism
Mar. 19 final exam

Course text will be lecture notes available from me. Malinvaud and Arrow and Hahn are highly recommended secondary reading. There will be four or five problem sets and a problem session on Fridays, 9-10:30.

_______________________

 

14.123 Spring, 1975
Professor Hal R. Varian

Consumer Theory I

  1. Consider a consumer with a Cobb-Douglas utility function:
    u(x,y) = a ln x + (1-a) ln y.
    Calculate:

    1. demand functions for x and y
    2. the indirect utility function
    3. the expenditure function
    4. the Hicksian demand functions.
  2. In a general equilibrium analysis, we cannot take income as an exogenous variable in the demand function since income, y = p.w, depends on the vector of relative prices. Derive the Slutsky equation for Dpm(p, p.w) in this case.
  3. At a general equilibrium price vector p*, we have aggregate supply equal aggregate demand:
    Σ mi(p*, p*.w) = Σ wi. Show that if all agents have identical marginal propensities to consume each good (Dymi(p*, p*.w) = Dymj(p*, p*.w) for all i and j) then all aggregate demand curves must be downward sloping at equilibrium. More generally, show that Dp(Σ mi(p*, p*.wi)) is negative semi-definite.
  4. Define eij = (-pj/xi) Dpjmi(p,y) be the cross price elasticity of good i with respect to price j, and ri = pi mi(p, y)/y, the income share of commodity i.
    Show that r1e11 + r2e21 +r3e31  = r1.

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14.123 Spring, 1975
Professor Hal R. Varian

Consumer Theory II

  1. A consumer is found to have a utility function of the form
    u = -1/x1 – 1/x2.

    1. Starting from the utility function, compute the market demand functions for the consumer when he has income y and faces prices p1 and p2.
    2. Use the market demand functions to show that the indirect utility function is
      u = -( √(p1) + √(p2))2/m.
    3. Compute the expenditure function from the indirect utility function.
    4. Compute the consumer’s compensated and market demand curves from the expenditure function.
  2. Suppose at prices (p1, p2) = (5,10) and income y = $100, a rational consumer consumes the bundle (6,7). Assume that we have measured the following derivatives:

∂H1/∂p1 (p1, p2, ū) = -2
∂H1/∂p2 (p1, p2, ū) = +1
∂M1/∂y (p1, p2, y) = 2/7

where H1 and H2 are the Hicksian demand functions for goods 1 and 2 and M1 is the Marshallian demand function for good 1. Find an estimate of the consumption bundle of the consumer at (p1, p2) = 5,11).

  1. Suppose a consumer has an expenditure function of the form e(p, u) = u.g(p). Show that his utility function is homogenous of degree one. Suppose e(p,u) is of the form e(p,u) = h(u)g(p). How does the consumer’s behavior differ?
  2. Suppose a consumer has a differentiable expected utility function for income with Dyu(y) strictly positive. Show that he will always take a small enough bet as long as it has positive expected value.

_______________________

 

14.123 Spring, 1975
Professor Hal R. Varian

General Equilibrium III

  1. Show that Walras law holds for a production economy with fully distributed profits.
  2. Prove the theorem that a general equilibrium is pareto efficient for an economy with production.
  3. Suppose we have a productive economy with two agents. The producer has a production function x = q1/2 where x is output and q is labor.
    The consumer has a utility function u(x,q) = x1/2(1-q)1/2. Calculate the general equilibrium real wage and equilibrium level of profits.

_______________________

 

14.123 Spring, 1975
Professor Hal R. Varian

General Equilibrium Theory and Welfare Economics I

  1. Show that any solution to

max Σ ai ui(xi), ai>0
s.t. Σ xi ≤ w

is necessarily pareto efficient.

  1. Suppose we have two agents with indirect utility functions

v1(p1, p2, y) = ln y –a ln p1 – (1-a) ln p2
v2(p1, p2, y) = ln y –b ln p1 – (1-b) ln p2

and initial endowments

w1 = (1,1)
w2 = (1,1)

Calculate the market clearing price.

  1. We have two agents with utility functions

u1(x1, y1) = a ln x1 +(1-a) ln y1
u2(x2, y2) = b ln x2 + (1-b) ln y2

and initial endowments

w1 = (1,0)
w2 = (0,1)

Calculate the market equilibrium prices in terms of the parameters a and b.

_______________________

 

14.123 Spring, 1975
Professor Hal R. Varian

General Equilibrium Theory and Welfare Economics II

  1. Two agents with strictly convex preferences have equal initial endowments
    w1 = w2. They trade to an arbitrary allocation in the Core (w1,w2), (x1,x2). Prove that this allocation is necessarily fair:

    1. Draw an Edgeworth box and give a geometric argument;
    2. give an algebraic argument in the general case (there is a one-line proof.)
    3. Show in a three person economy there are allocations in the equal division core that are not fair.
  2. Suppose we have n agents with identical, strictly convex preferences and we have some initial bundle of k goods to be divided among them. Let x be a fair allocation; show that x must give the same bundle to each agent. (Recall that a fair allocation is one that is strongly pareto efficient and such that no agent prefers any other agent’s bundle to his own.)
  3. Show that under appropriate assumptions of convexity, every pareto efficient allocation is necessarily a solution to a problem of maximizing a weighted sum of utilities. What is the economic interpretation of the weights?
  4. Suppose we are at a market allocation that is considered good. Since it is a market equilibrium it is pareto efficient and therefore maximizes a certain weighted sum of utilities Σ ai* ui(x). Accordingly, we will use Σ ai* ui(x) to evaluate small projects. Suppose we are considering a small project that will change x = (x1,…, xn) to x´= (x1´,…, xn´). Show that it should be undertaken if and only if it increases national income; that is, iff Σ p.(xi´-xi) >0.

_______________________

 

14.123 FINAL EXAMINATION
March 19, 1975

Professor H. Varian

Answer any 2 out of 4. All questions have equal weight. Good luck!

  1. A consumer has a utility function of the form u(x1, x2) = ln x1 + x2. He faces prices p1 and p2 and has income y. Calculate:
    1. his Marshallian demand functions for each good
    2. his indirect utility function
    3. his Hicksian demand functions
    4. his expenditure function.
  2. There are two consumers A and B with the following utility functions and endowments:

UA(XA1, XA2) = a ln XA1 + (1-a) ln XA2 , WA = (0,1)
UB(XB1, XB2) = min (XB1, XB2) , WB =(1,0)

Calculate the market clearing prices and the equilibrium allocation.

  1. We have n agents with identical strictly concave utility functions, u1(x1),…,un(xn). There is some initial bundle of goods w. Show that equal division is a pareto efficient allocation.
  2. A consumer has a differentiable expected utility function u(y) with u´(y) > 0. (There are no conditions on u´´(y)). His initial level of wealth is w and he is contemplating a bet which gives him $e with probability p > ½ and he loses $e with probability 1-p. (Notice the bet has positive expected value.) Show that he will always take the bet if e is small enough. (Hint: try Taylor series.)

 

Source: Personal copies.

Image Source: Detail from 1976 departmental group photo.

Categories
Exam Questions M.I.T.

MIT. Microeconomic Core Theory II. Bishop, 1974

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“Microeconomic Theory II”, the second of four half-semester core microeconomic theory courses at MIT, was actually the first offered during the academic year 1974-75. It was taught by Professor Robert L. Bishop. In this post we find 29 sample questions for the five sets of topics covered in the courses. Also included are the waiver exam for testing out of the course and the final examination for the students who took the course

The course “text” was the mimeographed manuscript on economic theory written by Bishop that was on closed reserve at Dewey Library and consulted by presumably at least a dozen cohorts over the 1960s (perhaps even earlier) and 1970s. A copy of that manuscript can be found in the Edwin Burmeister papers at Rubenstein Library of Duke University. 

 Two papers (especially the second) by Bishop covering some of the course material are:

Bishop, Robert L. “Duopoly: Collusion or Warfare?” The American Economic Review 50, no. 5 (1960): 933-61.

Bishop, Robert L. “The Effects of Specific and Ad Valorem Taxes.” The Quarterly Journal of Economics 82, no. 2 (1968): 198-218.

Core microeconomic theory at MIT in 1974-75:

14.121 (linear models) was taught by Martin Weitzman,
14.123 (duality) was taught by Hal Varian,
14.124 (capital theory, uncertainty and welfare economics) was taught by Paul Samuelson.

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Topics in 14.122, with Sample Questions

  1. Review of demand and supply, elasticities. Walrasian v. Marshallian stability conditions. Demand and supply as seen by the individual seller or buyer.
    1. What various formulas have been proposed for measuring the arc elasticity between two points on a demand curve, (q1,p1) and (q2,p2)? Discuss the virtues and defects of the various definitions. Can any one be said to be “best”?
    2. Compare the Walrasian and Marshallian stability conditions as to (a) their content, (b) the types of markets in which they are realistically applicable, and (c) the situations in which they do not agree.
    3. If 1000 sellers have fixed supplies of 50 units each of a good, how does the demand confronting each individual seller relate to the market demand (a) as to slope, (b) as to elasticity? How are the answers affected if each seller has a positively sloped supply schedule?
  2. Review of the revenue and cost curves of the firm and its long-run and short-run equilibrium. Comparative implications of competitive and monopolistic equilibrium.
    1. Show how the price elasticity of demand for a good is related to average and marginal revenue. Why is a monopolist never in static equilibrium in the range where his demand is relatively inelastic?
    2. Given the linear demand p = a –bq, show that price elasticity depends only on p and a, or only on q and a/b. When do two linear demands have the same elasticity (a) at any given price, (b) at any given quantity?
    3. Given two linear demand (with different slope and different axis-intercepts) and a point on one of them, find geometrically the point on the other with the same elasticity.
    4. A linear demand and a demand that is concave from above are tangent at a particular point. In the vicinity of that output, how much can you say about the relative magnitudes, slopes , and curvatures of the respective marginal revenue curves?
    5. Given relevant segments of a monopolist’s AR, MR, and MC curves (but not AC), show how much his profit is reduced if he is forced to charge a somewhat lower price than his profit-maximizing one—on the assumption that he still has an incentive to satisfy the full demand at the new price.
    6. “Short-run marginal cost is typically smaller than long-run marginal cost, since the former reflects only variable cost while the latter reflects full cost.” Discuss.
    7. Discuss the virtues and limitations of Lerner’s concept of the degree of monopoly power, M = (AR-MC)/AR. Would it make any difference if he had defined it as M´ = (AR-MR)/AR?
    8. “A profit-maximizing monopolist, in contrast to a pure competitor, would always prefer to sell more than he actually can, at the price he hooses to set. This is why monopolists frequently advertise and pure competitors never do; and it is also why equilibrium can be analyzed by means of demand and supply curves in pure competition but not in monopoly.” Discuss.
  1. Long-run and short-run equilibrium of the purely competitive industry, with comparative statics problems. Supply curves reflecting pecuniary v. real or technological externalities.
    1. Give as many distinct reasons as you can why a purely competitive industry’s long-run supply curve may be positively sloped? Negatively sloped?
    2. “If a purely competitive industry’s long-run equilibrium is disturbed by a sudden increase in demand, the effects on price are likely to be greater in the short run than the long, and the effects on output are likely to be just the opposite.” Discuss.
    3. Under what circumstances, if any, is the Marshallian producers’-surplus area above a supply curve a defensible concept? When is it clearly indefensible?
    4. In a purely competitive industry with negatively sloped demand, can a commodity tax lower the price? Can it raise price by more than the amount of the tax? Show that the answers differ according as the stability conditions are assumed to be Walrasian or Marshallian.
    5. In a purely competitive industry where firms all have u-shaped costs and the industry’s long-run supply is horizontal, compare the effects of a specific commodity tax, a franchise tax, and a limited licensing of firms—such that all would have the same effect on industry output.
    6. Assume that a distinctive type of grape can be grown only on a distinctive type of vineyard land, which is valueless in any other use. This land varies widely in quality from one acre to another. The only other factor, labor, is homogeneous and in perfectly elastic supply to this single industry. (Assume, for convenience, that one firm always cultivates just one acre, irrespective of relative factor prices.)
      1. If the land is widely owned and the grape industry is purely competitive, show how its long-run supply curve is derived. Then, for some given grape demand, show how the aggregate equilibrium rent is determined.
      2. What would be the comparative effects of a tax on the grapes and a tax on the vineyard land that would raise the same revenue? Might the landlords ever prefer the latter tax?
      3. Starting from the equilibrium in (a), assume that laborers become free to allocate themselves on the vineyard land and receive equal per capita shares of the total grape revenue. How would this affect the price and quantity of grapes, incomes, and allocational efficiency?
    7. Explain why, in some purely competitive industries, social marginal cost may be different from private marginal cost.
  2. Comparative statics of monopoly: changes of demand, cost, taxes, various regulations. Equilibrium with advertising, with price discrimination, with systematic seasonal shifts of demand.
    1. In a monopoly with negatively sloped demand, can a specific tax lower price? Can it raise price by more than the amount of the tax? Show that the answers depend on the second-order conditions for a profit maximum. Are these special results more or less likely than in pure competition (cf. question 15).
    2. For any given specific tax, does a fully equivalent ad valorem tax exist (a) in pure competition, (b) in monopoly?
    3. “Not only does a monopolized industry produce less than a competitive one would, but also when superior productive equipment becomes available, the monopolist is motivated to introduce it more slowly.” Explain wherein you agree or disagree.
    4. What determines whether a static-equilibrium monopoly price will rise or fall in response to an increase of demand? Does it make any difference whether the demand increase is spontaneous or induced by advertising? Can an increase in demand ever reduce a monopolist’s equilibrium output?
    5. Under what circumstances will a price ceiling imposed on a monopolist
      1. leave him with incentive to satisfy the full demand at that price,
      2. induce him to produce an output that is positive but not great enough to satisfy the full demand, or
      3. drive him out of business?
    6. “The greater is a firm’s degree of monopoly power (in Lerner’s sense), the more likely is it to find advertising profitable.” What can be said for and against this proposition?
    7. When is it profitable to discriminate as to price in two markets for a physically homogeneous product? Are there any circumstances in which the buyers in both markets may benefit from the discrimination?
  3. Monopolistic competition: oligopoly and product differentiation.
    1. Why are none of the duopoly solutions proposed by Cournot, Bertrand, Stackelberg, and Chamberlin wholly satisfactory?
    2. If duopolists produce differentiated products, what are the comparative consequences under (a) price-quoting and (b) quantity-setting? Specifically, compare the Cournot and Bertrand equilibria, the corresponding Stackelberg equilibria (and warfares), the potentialities for collusion, and the potentialities for warfare.
    3. How and why is the problem of oligopolistic interdependence allegedly avoided in Chamberlin’s large-group case of monopolistic competition? Are you satisfied that it is really avoided? Compare it in this respect with pure competition.
    4. As compared with simple monopoly, what additional sources of uncertainty are there with respect to comparative-statics problems under monopolistic competition?

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Waiver Exam—14.122
September 11, 1974

Answer any TWO questions (about 40 minutes each):

Question 1:

  1. Show how the total, average, and marginal cost curves of a one-product firm are related to one another in the long-run—as to intersections, minima, inflection points, etc. (Assume that the total-cost function is continuous up to at least its second derivative and that production is subject first to net economies of scale and then to net diseconomies.)
  2. Show how those same long-run cost curves are related to their short-run counterparts, identifying all notable points of correspondence.

Question 2:

In a small community surrounding a lake, workers can get all the employment they need in industry at a wage of $20 per day. An alternative employment is to catch fish in the lake and sell it in the environs at a constant price of $10 per bushel. With labor valued at the going wage, the cost of fish per bushel rises with the total amount of fishing. Specifically, the average cost of fish (in dollars per bushel) is related thus to the total number of bushels caught per day:

C = 2 + .005q

  1. With free entry to the lake, how much fish will be caught?
  2. Show that everybody can be made better off if the community levies an appropriate tax per bushel of fish. What is the optimal tax?
  3. If, alternatively, the lake were privately owned and the owner could hire labor to catch fish at the same cost as before, what output would maximize his net income?
  4. Would it always be appropriate, as in (b), to impose a tax on any competitive industry with a positively sloped supply curve? Explain briefly.

Question 3:

“If a specific tax of given magnitude is imposed on a good that is producible at constant unit cost, the equilibrium price may be raised either more or less under monopoly than under competition. Even when the price rises by an appreciably smaller amount under monopoly, however, it is still very likely to be socially disadvantageous to tax such a monopolized good rather than competitive ones.” Explain fully wherein you agree or disagree with each sentence.

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14.122
November 1, 1974

One hour and a half
Answer any FIVE of the following six questions:

  1. If a specific tax is imposed on a commodity produced by a purely competitive industry, what effects on price can be ruled out under the stability conditions specified by (a) Marshall; (b) Walras? Explain.
  2. You are given this cost function:

C= aqc + bq,

where C is total cost, qc is an absolute-capacity output (fixed in the short run), q is the actual output (less than or equal to qc), and a and b are positive constants. Draw carefully the implied long-run cost schedules and several sample sets of short-run cost schedules—total, average and marginal. Comment on the relationship between long-run and short-run marginal cost.

  1. “When the demand for a monopolist’s product increases, his profit-maximizing price may rise, remain the same, or fall. The conditions governing this result are exactly the same whether the increase in demand is spontaneous or induced by advertising.” Explain why you agree or disagree.
  2. “Fully equivalent specific and ad valorem taxes are possible in pure competition but not in monopoly.” Explain why you agree or disagree.
  3. When does a positively sloped supply curve imply some form of producers’ surplus, and when does it not? Explain.
  4. In an oligopoly with differentiated products, would the price be lower in a Cournot equilibrium or a Bertrand equilibrium? Explain.

Source: Personal copies.

Image Source:Robert L. Bishop at MIT Museum  .

Categories
Courses Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Capital Theory, Uncertainty, Welfare Economics. Half-semester Core Microeconomics. Samuelson, 1975

From my files from graduate school I have transcribed the syllabus and final exam for the fourth of the four half-semester core microeconomic theory courses taught at M.I.T. during the academic year 1974-75. The topics of capital theory, uncertainty and welfare economics fell to Paul Samuelson. The preceding three half-semester microeconomics theory courses were taught by Robert Bishop, Martin Weitzman and Hal Varian.

 

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READING LIST FOR 14.124
P. A. Samuelson
SPRING 1975

MICROECONOMIC THEORY

I. CAPITAL THEORY

  1. I. Fisher

Theory of Interest
Part II, all; Part I, Chs. 1,3; Part III, Chs. 10,11.

  1. E. Böhm-Bawerk

Positive Theory of Capital
Book V, all; Book VI, Chs. 6,7,8.

  1. R. M. Solow

“A Contribution to the Theory of Economic Growth”
Quarterly Journal of Economics, February, 1956; pp. 65-94.

Capital Theory and the Rate of Return
(DeVries Lectures) North-Holland, Amsterdam, 1963.

  1. T. Koopmans

Three Essays, pp. 105-126.

  1. F. Ramsey

E.J., 1928

  1. N. Kaldor

“Alternative Theories of Distribution”
RES, 1955

  1. Sraffa

Production of Commodities by Means of Commodities
Chs. 1, 2, 3.

  1. Dorfman-Samuelson-Solow

Linear Programming and Economic Analysis
Chs. 11, 12.

  1. A. Samuelson

“A Summing Up”
QJE, 1966

II. ECONOMICS OF UNCERTAINTY

  1. K. Arrow

Theory of Risk Bearing
Chs. 3,1,2,4.

  1. J. Tobin

RES, 1958

  1. H. Markowitz

Portfolio Selection
sample

III. MODERN WELFARE ECONOMICS

  1. A. Bergson [A. Burk]

“A Reformulation of Certain Aspects of Welfare Economics”
QJE, 52 (February 1938)
pp. 310-334

  1. J. Hicks

“The Foundations of Welfare Economics”
EJ, 49 (December 1939)
pp. 696-712

  1. P. A. Samuelson

Foundations of Economic Analysis (Harvard University Press, Cambridge, Mass., 1947)
Chapter 8, “Welfare Economics”

  1. P. A. Samuelson

“The Pure Theory of Public Expenditure”
Review of Economics and Statistics, 36 (November 1954)
pp. 387-389

reproduced as
Chapter 92
The Collected Scientific Papers of Paul A. Samuelson, Vol. II
MIT Press, Cambridge, Mass., 1966; editor: J.E. Stiglitz

  1. K. Arrow

Social Choice and Individual Values, 1951
Cowles Foundation for Research in Economics, Monograph #12
Wiley, New York, second edition, 1963

  1. J. Rawls

A Theory of Justice
Harvard University Press, Cambridge, Mass., 1971

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Background Reading

  1. A. C. Pigou

The Economics of Welfare, 1920
Macmillan, London, 4th edition, 1932
reprinted in new appendices, 1952

  1. L. Robbins

An Essay of the Nature and Significance of Economic Science, 1932
Macmillan, London, 2nd edition, 1935

  1. van der Graaf

Theoretical Welfare Economics
Cambridge University Press, London, 1957, paperback

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FINAL EXAM
14.124
MAY 20, 1975

This is a 1 ½ hour exam. You may take up to an extra half hour, but only if you need it and not in order to establish extra credit for all you know.
Answer any 3 of the following four questions, thus allowing about one half hour for each.

 

  1. Society consists of 2N people [equal numbers of men (i=1) and women (i=2)] who will live and consume for two periods: t=1,2, or now and tomorrow. Also, society has a Solow neoclassical production function:

C(t) + K(t+1) = F[L(t),K(t)]

All 2N people have the same labor, namely Li(t) = 1/2N. The women or men possesss equal shares in the initial capital good, K(1) = k/2N, but it is an unknown of the problem to find out what will be K(2).

Intertemporal tastes of the representative man and woman involve the same concave u[C(t)] function, and with equal Böhm-Fisher subjective time preference factors, ρ1 and ρ2, in:

U1 = u[C1(1)] + u[(C1(2)]/(1+ρ1), U2 = u[C2(1)] + u[(C2(2)]/(1+ρ2), ρ1 = ρ2.

(You may set N=1 to simplify your expositions if you wish to do so.)
The equilibrium is now determinable.

(a)  Describe graphically, and/or mathematically, and/or literally, how Irving Fisher or any modern economist would determine the equilibrium for:

C1(1)*, C1(2)*, C2(1)*, C2(2)*, K(2)*; r*, the rate of interest between period 1 and 2. (Hint: Will women lend to men or borrow from them?)

(b)  Very briefly, modify your above answer to show what will happen when men are more “impatient” than women, so that ρ1 > ρ2.

  1. Prove that fair-game investing or gambling will (a) be avoided by what class of people?; (b) be embraced by what class of people? How do you reconcile under (a) the purchases of insurance at unfavorable-game premiums?
  1. Lerner, Lange, and others wish to utilize market pricing in achieving maximization of a social welfare function appropriate to a socialist state where (a) all non-labor inputs are owned by the State; (b) “people’s changing tastes are to count,” (c) where the bureaucrats responsible for the different industries do not necessarily in every case face constant returns to scale and classical returns.

Describe how goods and services should be priced, how people’s total spendable incomes are to be determined, and also any special problems that might arise for the Lerner-Lange-Smith VISIBLE HAND.

  1. Bentham says that people may differ in the heights of their marginal utility from the same number of chocolates (or real incomes). But he believes that this difference in intensities of enjoyments is distributed “in about the same way among the very rich and the very poor.” What kind of income tax formula would he then presumably want to legislate? What “incentive effects” would you want to keep in mind appraising this solution?

Source: Personal copies

Image Source: Left to right: Robert C. Merton, Jerome Bert Wiesner and Paul A. Samuelson with Vol. 3 of Samuelson’s Collected Scientific Papers (1972). MIT Webmuseum.

Categories
Bibliography Harvard Suggested Reading

Harvard. Readings list for Commercial Crises Course by Persons, 1923

 

 

Warren M. Persons was an index number cruncher in the tradition of Irving Fisher and Wesley Clair Mitchell. As a guest professor at Harvard from Colorado College, he taught a course on the theory of business cycles (Economics 35) during the Winter term of the academic year 1916-17. Later as a member of the Harvard economics faulty and researcher with the Harvard Economic Service, he taught the course “Commercial Crises” (Economics 37) 1919-20, through 1926-27 that was attended primarily by graduate students.

Following an item from the Harvard Catalogue of its Officers and Graduates and a clipping from the Harvard Crimson about the Harvard Economic Service, I provide enrollment data for the course from 1923-24 when Frank Whitson Fetter (see his papers at Rubenstein Library, Duke University) attended. From Fetter’s handwritten course notes I have assembled a bibliography of items (with links to almost all references!) mentioned or assigned by Warren Persons. The final examination questions for the course have been transcribed in a later posting.

Note: The following three published items by (or edited by) Persons are relevant to the course content.

Persons, Warren M. “Books on Business Cycles: Mitchell, Aftalion, Bilgram.” The Quarterly Journal of Economics 28, no. 4 (1914): 795-810. .

The Problem of Business Forecasting, ed. by Warren M. Persons, William Trufant Foster and Albert J. Hettinger, Jr. Boston: Houghton Mifflin Company, 1924.

Persons, Warren M. “Theories of Business Fluctuations.” The Quarterly Journal of Economics 41, no. 1 (1926): 94-128. .

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Warren Milton Persons; S.B. Univ. Wis. 1899; Ph.D. Colorado Coll. 1912, Univ. Wis. 1915; Dean (Dept. of Business Administration and Banking) and Prof. of Economics and Finance, Colorado Coll. 1913-1918; Lectr. on Economics 1917; Prof. of Economics 1919—; Statistician of the Committee on Economic Research 1917-1919.

Source: Harvard University. Quinquennial Catalogue of the Officers and Graduates, 1636-1920, p. 100.

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REPLACES GUESS WORK BY ACCURATE FORECASTS

Harvard Economic Service Has Been of Great Value to Business, Experts Declare at Fifth Annual Conference

Harvard Crimson, October 22, 1923

The application of a scientific review of economic statistics to business concerns of the United States during the past five years, and its possible application to national and international affairs in the future, were the chief topics discussed on Saturday night at the fifth annual conference of the Harvard University Commitee on Economic Research, at a dinner held in the Harvard Club of Boston. After the dinner a group of speakers prominent in business and in economic research addressed the 200 subscribers to the Harvard Economic Service who were present.

After a brief introductory address by President Lowell, in which he commended the members of the committee for their service in developing economics from an inexact to an exact science. Professors Warren M. Persons and Charles J. Bullock, both of the committee, spoke, describing the growth and development of the Bureau of Economic Research at Harvard.

Persons Discusses Business Cycles

Professor Persons first described the theory of recurring business cycles, on which the Harvard Economic Service is based. Perpetual change, he showed, is an inherent feature of modern industrial enterprise. Prices rise and fall; markets expand and contract; production increases and decreases; orders accumulate beyond capacity and then seem to vanish altogether.

And yet, he said, the course of business is not purely fortuitous or haphazard. By studying the price movements in the United States for the past 20 years, an index of trade for the United States has been obtained. This chart reveals a well defined ebb and flow of prosperity and depression. First comes a period of business depression, then a recovery; this is followed by a period of prosperity followed by financial strain, which ultimately brings about a financial crisis. These five phases, each leading into the other, are known as the business cycle.

“In 1915,” he said, “the Harvard Economics Department started to investigate statistical data concerning past business cycles. From this data we were able to make accurate generalizations concerning past business cycles and inferences for the future.”

Discusses Development of Service

Professor Bullock showed how the Harvard Economic Service has developed during the past five years, and cited the increase in its number of subscribers to show its increasing value to the business houses of the United States.

“The old haphazard methods of business belong to the prehistoric ages of five years ago when we were in the business wilderness,” next declared Mr. Howard Coonley ’98, president of the Boston Chamber of Commerce, and of the Walworth Manufacturing Company. He said that since he had discovered that the sales of the Walworth Company followed almost precisely the sales graphs prepared by the Harvard Economic Service, his company had been able to discard the old uncertain method of irregular production. By following the Harvard forecast, they had been able to estimate sales for each phase of the business cycle, and plan their production and financial programs accordingly.”

“The Economic Service,” he said, “gives a perspective to business. It is an executive airplane that enables a man to see his business from afar in relation to other businesses, and deal with it accordingly.”

Turning from the past accomplishments of the Economic Service, the remaining speakers developed the further possibilities of a Bureau of Economic Research.

Mr. Jesse Isidor Straus ’93, president of R. H. Macy and Company, urged the application of the economic study of statistics to legislative problems of the country. A study he said of the economic effects of tariff and taxation on commerce might produce results that would cause even Congress to give heed to the findings of the Harvard Research Bureau in preparing its legislation.

Professor Thomas N. Carver, chairman of the Department of Economics at the University also spoke of the need of conducting national affairs by cientific economic principles.

“Already,” he said, “two great countries of the world are on the rocks largely because the men in control were illiterates in economics.

Professor Bullock, the concluding speaker, emphasized the importance of the international study of economic statistics. He said that a research bureau similar to that at Harvard had already been established by London and Cambridge Universities, and that one would soon be started at the Institute of Statistics of the University of Paris. By the cooperation of these three bureaus, he said he hoped that long strides would be taken towards a better understanding of economics and business conditions throughout the world.

_________________________________________

 

Enrollment in Economics 37, Commercial Crises 1923-24

[Economics] 37 1hf. Professor Persons.—Commercial Crises.

Total 22: 16 graduates, 2 Seniors, 1 Junior, 2 Radcliffe, 1 Graduate School of Business

 

Harvard University. Report of the President and the Treasurer of Harvard College, 1923-24. p. 107.

_________________________________________

Course Bibliography for Economics 37
Harvard University, First Term, 1923-24

Persons
Business Cycles (37)
1923-1924

Oct. 2

**Business Cycles and Unemployment. Report and Recommendations of a Committee of the President’s Conference on Unemployment, including an Investigation made under the Auspices of the National Bureau of Economic Research. New York: McGraw-Hill Book Company, Inc., 1923. Includes Wesley Clair Mitchell (ed.), “The Relation of Business Cycles to Unemployment” with articles by many economists.

*Mitchell, Wesley Clair—Business Cycles. Berkeley: University of California Press, 1913.

Burton, Theodore E.—Financial Crises and Periods of Industrial and Commercial Depression. New York: D. Appleton and Company, 1920.

Hull, George H.—Industrial Depressions, their Causes Analysed and Classified with a Practical Remedy for such as Result from Industrial Derangements, or Iron the Barometer of Trade. New York: Frederick A. Stokes Company, 1911.

Hawtrey, Ralph George—Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations. London: Constable & Company Limited, 1913.

*Robertson, Dennis Holme—A Study of Industrial Fluctuation: An Enquiry into the Character and Causes of the so-called Cyclical Movements of Trade. London: P.S. King & Son, Ltd., 1915.

*Moore, Henry Ludwell—Economic Cycles: Their Law and Cause. New York: Macmillan, 1914.

Review of Economic Cycles: their Law and Cause by Henry Ludwell Moore.
Persons, Warren M. The American Economic Review 5, no. 3 (1915): 645-48.

Review of Economic Cycles: their Law and Cause by Henry Ludwell Moore.
Persons, Warren M. Publications of the American Statistical Association 14, no. 111 (1915): 695-98.

*Aftalion, Albert (2 vol.)—Les Crises Périodiques de Surproduction. Paris: Livrairie des Sciences Politiques et Sociales, Marcel Rivière et Companie, 1913. Volume I; Volume II.

*Veblen, Thorstein—The Theory of Business Enterprise. New York: Charles Scribner’s Sons, 1904.

Bilgram, Hugo and Louis Edward Levy—The Cause of Business Depressions as Disclosed by an Analysis of the Basic Principles of Economics. Philadelphia: J. B. Lippincott Company, 1914.

King, Willford Isbell—Employment, Hours, and Earnings in Prosperity and Depression, United States, 1920-1922. New York: NBER, 1923.

Foster, William T. and Waddill Catchings—Money. Publications of the Pollak Foundation for Economic Research, No. 2. Boston: Houghton Mifflin, 1923.

H.B. Hastings—Costs and Profits: their Relations to Business Cycles. Publications of the Pollak Foundation for Economic Research, No. 3. Boston: Houghton Mifflin, 1923.

*Lavington, F.—The Trade Cycle. An Account of the Causes Producing Rhythmical Changes in the Activity of Business. London: P. S. King & Son, 1922.

Edie, Lionel D. (ed.)—The Stabilization of Business. New York, Macmillan, 1923.

Jordan, David F.—Business Forecasting. New York: Prentice-Hall, 1921.

Pell, Charles Edward—The Riddle of Unemployment and its Solution. London: Cecil Palmer, 1922.

Klein, Philip—The Burden of Unemployment. New York: Russell Sage Foundation, 1923.

Moore, Henry Ludwell. “Generating Cycles of Products and Prices.” The Quarterly Journal of Economics 35, no. 2 (1921): 215-39.

Moore, Henry Ludwell. “Generating Cycles Reflected in a Century of Prices.” The Quarterly Journal of Economics 35, no. 4 (1921): 503-26.

Moore, Henry Ludwell. “The Origin of the Eight-Year Generating Cycle.” The Quarterly Journal of Economics 36, no. 1 (1921): 1-29.

Ingraham, Mark H. “On Professor H. L. Moore’s Mathematical Analysis of the Business Cycle.” Journal of the American Statistical Association 18, no. 142 (1923): 759-65.

Frank, Lawrence K. “A Theory of Business Cycles.” The Quarterly Journal of Economics 37, no. 4 (1923): 625-42.

Oct. 4

Bullock, Charles J. “Prefatory Statement.” The Review of Economics and Statistics 1, no. 1 (1919).
“General Considerations and Assumptions.” The Review of Economics and Statistics 1, no. 1 (1919): 6-8.
“Measurement of Secular Trend.” The Review of Economics and Statistics 1, no. 1 (1919): 8-18.

Oct. 9

Moore, Henry Ludwell. Generating Economic Cycles. New York, 1923.

Oct. 11

Persons, Warren M. “The Revised Index of General Business Conditions.” The Review of Economics and Statistics 5, no. 3 (1923): 187-95.

Oct. 16

Persons, Warren M., and Eunice S. Coyle. “A Commodity Price Index of Business Cycles.” The Review of Economics and Statistics 3, no. 11 (1921): 353-69.

Oct. 18

Frickey, Edwin. “An Index of Industrial Stock Prices.” The Review of Economics and Statistics 3, no. 8 (1921): 264-77.

Maxwell, W. Floyd, and Ada M. Matthews. “A Monthly Index of Bond Yields, 1919-23.” The Review of Economics and Statistics 5, no. 3 (1923): 212-17.

Oct. 23

Persons, Warren M. “An Index of Trade for the United States.” The Review of Economics and Statistics 5, no. 2 (1923): 71-78.

Day, Edmund E. “Cyclical Fluctuations of the Volume of Manufacture.” The Review of Economics and Statistics 5, no. 1 (1923): 30-60.

Day, Edmund E. “The Physical Volume of Production in the United States for 1922.” The Review of Economics and Statistics 5, no. 3 (1923): 196-211.

Day, Edmund E. “An Index of the Physical Volume of Production: I. Agriculture, 1879-1920.” The Review of Economics and Statistics2, no. 9 (1920): 246-59.

Day, Edmund E. “An Index of the Physical Volume of Production: II. Mining, 1879-1919.” The Review of Economics and Statistics 2, no. 10 (1920): 287-99.

Day, Edmund E., and Warren M. Persons. “An Index of the Physical Volume of Production: III. Manufacture, 1899-1919.” The Review of Economics and Statistics 2, no. 11 (1920): 309-37.

Day, Edmund E. “An Index of the Physical Volume of Production: III. Manufacture, 1889-1912 (concluded).” The Review of Economics and Statistics 2, no. 12 (1920): 361-67.

Day, Edmund E. “An Index of the Physical Volume of Production: IV. Agriculture, Mining, and Manufacturing Combined, 1899-1919.” The Review of Economics and Statistics 3, no. 1 (1921): 19-22.

Oct. 30

Persons, Warren M. “II. The Method Used.” The Review of Economics and Statistics 1, no. 2 (1919): 117-39.

Nov. 20
Bibliography for reports:

Dewey, Davis Rich—Financial History of The United States (5th ed.). New York: Longmans, Green, and Co., 1915.

Lincoln, Edmond E. List of References in Economics 2. Economic History of Europe since 1800, and of the United States (Revised, Enlarged, and Rearranged). Cambridge, Mass.: Harvard University, 1920.

Sumner, William Sumner—A History of Banking in the United States. Vol. I in A History of Banking in All the Leading Nations. New York: Journal of Commerce and Commercial Bulletin, 1896.

Davis, Joseph Stancliffe—Essays in Earlier History of American Corporations. Cambridge, Mass.: Harvard University Press, 1917. Volume I;  Volume II.

Holdsworth, John Thom—The First Bank of the United States. Ph.D. Thesis, University of Pennsylvania, 1910.

Callender, G. S. “The Early Transportation and Banking Enterprises of the States in Relation to the Growth of Corporations.” The Quarterly Journal of Economics 17, no. 1 (1902): 111-62.

Dec. 11

1923 Harvard Ph.D. Thesis by Joseph L. Snider directed by Warren M. Persons.

Snider, Joseph L. “Wholesale Prices in the United States, 1866-91.” The Review of Economics and Statistics 6, no. 2 (1924): 93-118.

THEORIES OF BUSINESS CYCLES

Oral reports were presented on the theories of the following authors:

Dec. 18

Veblen, Thorstein. The Theory of Business Enterprise. New York: Charles Scribner’s Sons, 1904.

  1. Alford
  2. Allen
  3. Fetter

Dec. 20

See Veblen’s new book:

Veblen, Thorstein. Absentee Ownership and Business Enterprise in Recent Times: The Case of America. New York: B. W. Huebsch, 1923.

Jan. 3

Hobson, John A. Economics of Unemployment. London: George Allen & Unwin. 1922.
ch 5, pp. 73-83; ch 10, pp. 146-151.

Commons, John R. “Hobson’s “Economics of Unemployment” The American Economic Review 13, no. 4 (1923): 638-47.

  1. Gilbert, D.W.
  2. Maxwell
  3. Nakakawagu [Tseng]

Jan. 5

*Aftalion, Albert (2 vol.). Les Crises Périodiques de Surproduction. Paris: Livrairie des Sciences Politiques et Sociales, Marcel Rivière et Companie, 1913. Volume I; Volume II.

  1. Gilbert, R. V.
  2. Stern [Sherrin?]
  3. Silbert

Jan. 8

Bouniatian, Mentor. Les Crises Économiques: Essai de Morphologie et Théorie des Crises Économiques Périodiques et de Théorie de la Conjuncture Économique. Paris. Marcel Giard, 1922.

  1. Smith, W.B.
  2. Taber
  3. Woolfson

Jan.10

Hawtrey, Ralph George. Good and Bad Trade: An Inquiry into the Causes of Trade Fluctuations. London: Constable & Company Limited, 1913.

Hawtrey, Ralph George. Monetary Reconstruction. London: Longmans, Green and Co., 1923.

Keynes, J. M. “Review of Currency and Credit by R. G. Hawtrey.” The Economic Journal 30, no. 119 (1920): 362-65.

Article by Mitchell reviewing business in 1923 in annual number of N.Y. Evening Post.

  1. Opie
  2. Smith, D.B.

Jan. 12

Hawtrey, Ralph George. Currency and Credit. London: Longmans, Green and Co., 1919.  ch 9 + 10.

Young, Allyn A. “Hawtrey, Currency and Credit; Fisher, Stabilizing the Dollar.” The Quarterly Journal of Economics 34, no. 3 (1920): 520-32.

Report by Taber on:

Foster, William T. and Waddill Catchings—Money. Publications of the Pollak Foundation for Economic Research, No. 2. Boston: Houghton Mifflin, 1923.

Jan. 15

Robertson, Dennis Holme. A Study of Industrial Fluctuation: An Enquiry into the Character and Causes of the so-called Cyclical Movements of Trade. London: P.S. King & Son, Ltd., 1915.

  1. Silbert
  2. Stern
  3. Smith, W.B.

Jan. 15

Mitchell, Wesley Clair. Business Cycles. Berkeley: University of California Press, 1913: ch. 14.

  1. Taber
  2. Miss Bacon
  3. Miss Freudenthal

Jan. 17, 19, 22

The Methods of Stabilization of Industry as outlined in:
Business Cycles and Unemployment. Report and Recommendations of a Committee of the President’s Conference on Unemployment, including an Investigation made under the Auspices of the National Bureau of Economic Research. New York: McGraw-Hill Book Company, Inc., 1923.

 

Jan. 22
[appears to be suggestions for final examination preparation]

See Day’s article in Jan. 1923 Review [1].

Know statistical analysis used in Harvard method; lag, sequence of movements, correlation between different indices, etc. etc.

British business conditions, June 1922 [2] and Oct 1923 Supplement [3]. Index of Physical Production of Manufactures. Articles for Feb. 1921 [4], Dec. 1921 [5] and Oct. 1923 [6] for relation between production and price fluctuations.

It here typical business cycle, do crises and financial panics always occur; international nature.

Extended knowledge of author treated and general knowledge of all authors.—Present status of subject and its probably developments, a philosophy of the subject of business cycles.

Methods of forecasting. The three curves and their relations.— [7] Mitchell’s book. Ch. 6 by King is important contribution P. says.

Index of Trade—April, 1923  [8].

 

[1] Day, Edmund E. “Cyclical Fluctuations of the Volume of Manufacture.” The Review of Economics and Statistics 5, no. 1 (1923): 30-60.

[2a] Bowley, Arthur L. “An Index of British Economic Conditions: 1919-22.” The Review of Economics and Statistics 4 (1922): 145-56.

[2b] Persons, Warren M., Norman J. Silberling, and William A. Berridge. “An Index of British Economic Conditions: 1903-14.” The Review of Economics and Statistics 4 (1922): 157-75.

 [3]  “[An Index of British Economic Conditions: 1903-14]: Appendix.” The Review of Economics and Statistics 4 (1922): 176-89.

 [4] “Physical Production in 1920.” The Review of Economics and Statistics 3, no. 2 (1921): 37-39.

 [5] Persons, Warren M. “The Iron and Steel Industry During Business Cycles.” The Review of Economics and Statistics 3, no. 12 (1921): 378-83.

 [6] Blackett, O. W. “Pig Iron and Scrap Prices during Business Cycles.” The Review of Economics and Statistics 5, no. 4 (1923): 272-78.

 [7] Business Cycles and Unemployment. Report and Recommendations of a Committee of the President’s Conference on Unemployment, including an Investigation made under the Auspices of the National Bureau of Economic Research. New York: McGraw-Hill Book Company, Inc., 1923. Includes Wesley Clair Mitchell (ed.), “The Relation of Business Cycles to Unemployment” with articles by many economists.

 [8] Persons, Warren M. “An Index of Trade for the United States.” The Review of Economics and Statistics 5, no. 2 (1923): 71-78.

 

Source: Duke University, Rubenstein Library. Frank Whitson Fetter Papers, Box 49, Folder “Student Papers, Graduate Courses (Harvard University) Ec 37—Corporation Finance Notes, Report 1923-24.”

Image Source: Harvard Class Album, 1920.

Categories
Columbia Curriculum Fields

Columbia. J. M. Clark on Teaching “modern tools of economic thinking”, 1942

In my examination of department archives I have been somwhat surprised at the relative scarcity of paper traffic with regard to curriculum reform. Here a short note from Maurice Clark to the executive officer of the economics department (i.e. chairman) Robert M. Haig about Columbia’s hiring strategy and whether two “math. Ec’ist[s]” aren’t enough for the task of teaching the “modern tools of economic thinking.” Looking at the faculty list for that year, I presume Clark meant Harold Hotelling and Abraham Wald. The note sounds as though Clark is looking for a way to get out of the “Current types of economic theory” course that he had taken over from Wesley Clair Mitchell and to teach instead a core theory course again.

_____________________________________

 

COPY

January 9, 1942

Dear Bob [R. M. Haig]:

I heard Lange’s paper. Impressions very favorable per se: but he’s one more high-power mathematical economist, and with three, wouldn’t we be unbalanced? And if it takes a math. Ec’ist to do the job of “modern tools of economic thinking” we had in mind, aren’t two enough?

Another unmatured impression: that part of the gap we’re thinking of would be met by a development and more up-to-date and adequate treatment of the sort of thing I used to do in the course I quit giving when I took Mitchell’s “Types” course:–more specifically, the second half-year where I dealt with the concepts of demand, supply and cost curves in an attempt to relate them to actual behavior. I adumbrated the possibility of treating the distinction between competition and monopoly in terms of slopes of “individual demand schedules” (before Chamberlin’s book). Had ‘em read Foster & Catchings to get the “Income-flow” approach, before Keynes’ books appeared. (I note Neisser of Penn. still finds use for F. & C. in teaching.) Suggested the discrepancy between saving and investment (without, I freely admit, seeing the significances that Keynes developed). And of course I had played with “multipliers”.

A course in which I ruthlessly condensed what used to be my first half-year into two or three lectures, and developed the other kind of material more adequately and systematically, might be considered, while we’re considering things.

Yours,

J. M. Clark

_____________________________________

 

January 13, 1942

Professor John Maurice Clark,
Fayerweather Hall.

Dear Maurice:

Many thanks for your note of January 9th. I am assuming that you have no objection to my showing it to Mitchell, Angell, and Goodrich.

Faithfully yours,

[R.M. Haig]

_____________________________________

January 13, 1942

Memorandum to Professors Angell, Goodrich and Mitchell
from Professor R. M. Haig:

You will be interested in the enclosed comments from Maurice Clark

_____________________________________

 

Source: Columbia University Libraries. Manuscript Collections. Columbiana. Department of Economics Collection. Faculty. Box 2. Folder “Department of Economics—Faculty Beginning January 1, 1944 (sic)”.

Image Source:  John Maurice Clark at The History of Economic Thought Website.

Categories
Harvard Syllabus

Harvard. Economics of Transportation. Chamberlin, 1931

______________________________

Every year from 1927/28 through 1931/32, Edward Chamberlin taught a semester-long course on the economics of transportation. He took over the course that had been previously taught by Professor William Zebina Ripley, who continued teaching the next semester course in the sequence on the economics of corporations. In the following year these two courses morphed into the full-year course “Monopolistic Industries and their Regulation” co-taught by Chamberlin and Edward S. Mason.

The final examination questions for 1932 have been transcribed for this course.

______________________________

 

Course Enrollment

[Economics] 4a 1hf. Asst. Professor Chamberlin.—Economics of Transportation.

Total: 149. 5 Graduates, 46 Seniors, 85 Juniors, 7 Sophomores, 6 Other.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments, 1931-1932. p. 71.

______________________________

 

ECONOMICS 4a
1931-32

Lectures: Section Meetings:
Oct. 1-17 inclusive

Nov. 3-19 inclusive

Dec. 8-15 inclusive

Oct. 19-27 inclusive.

Nov. 20-Dec. 1 incl.

Dec. 16-22 inclusive

Assignments
Before Oct. 20

Chapter

Historical Sketch
Taussig—Principles of Economics

62, 63
Ripley—Railroads, Rates and Regulation

1
Ripley—Railroad Problems 

1,2

Rates
Jones—Principles of Railroad Transportation

4-9 inclusive
Jones and Vanderblue—Railroads, Cases & Selections

VIII

Traffic Geography
Jones and Vanderblue—Railroads, Cases & Selections

II
Daggett—Principles of Inland Transportation

8-14 inclusive

Finance
Jones

2, 16, 18
Jones and Vanderblue

XX, Section 1

Hour Examination October 29
Before Nov. 21

History of Regulation to 1917
Ripley—Railroads, Rates and Regulation

13-17 inclusive
Jones

14
Sharfman—American Railroad Problem

pp. 51-64

Federal Operation During the War
Sharfman

3, 4, 5
 

Nationalization
Sharfman

6

The Act of 1920
Sharfman

pp. 347-357
Sharfman

11

Valuation
Jones

15
Jones and Vanderblue

IV

Motor Truck Transport
Daggett

6, 34
Peterson—“Motor Carrier Regulation and Its Economic Basis”—Quarterly Journal of Economics—Aug. 1929

Inland Water Transport
Daggett

2, 33

Hour Examination December 3
Before Dec. 17

Consolidation
Jones

17
Daggett

22, 23, 24
Jones and Vanderblue

XXIV Sections 1 and 2
Foreign Experience
Daggett

30, 31

 

Reading Period

Read one of the following:

  1. Rates

Vanderblue and Burgess—Railroads, Rates, Service, Management. Chs. 5-12 inclusive.
Clark—Economics of Overhead Costs. Chs. 13, 14

  1. Valuation

Glaeser—Outlines of Public Utility Economics. Chs. 14, 19, 21. 
I.C.C. Finance Docket #3908 (O’Fallon Case)
Sup. Ct. Opinion #131, 132. October, 1928.

  1. Waterways

Moulton—St. Lawrence Navigation and Power Project. pp. 1-240
Journal of Political Economy—Feb. 1930, pp. 86-107; June 1930, pp. 345-353
Moulton—Waterways vs. Railways. Chs. 2, 3, 20.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 2, Folder “Economics, 1931-1932”.

Image Source:  Edward Chamberlin, Harvard Class Album 1932.