Month: May 2018

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Exam Questions Harvard

Harvard. Year-end exams. Money, Banking, Commercial Crises. Young, 1921-27

 

Today’s artifacts come from the roaring ’20s. Besides his courses in economic theory, Allyn A. Young taught a year long course at Harvard, “Money, Banking and Commercial Crises”. Before presenting enrollment figures and the exams for Young’s Economics 3, I have assembled a chronology that identifies the course instructors over the entire period 1911-1946. Links are provided to the related artifacts that have been transcribed here at Economics in the Rear-view Mirror. 

The chronology is followed by Young’s course description for 1924-25. Presumably there was a mid-year exam for the course, but these were not included in the printed collection of final course examinations. It is possible that the questions have been limited to the second-semester’s course content. This is something that definitely deserves checking.

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Chronology of the Harvard economics course
“Money, Banking and Commercial Crises”

This two semester course was the product of merging the one semester course “Commercial Crises and Cycles of Trade” (Economics 12) with the two semester sequence “Money” and “Banking and Foreign Exchange” (Economics 8a and 8b, respectively).

The new course “Money, Banking, and Commercial Crises” (Economics 8, then 3, and later 41) was a staple of economics course offerings for the next 35 years.

Economics 8

1911-12 taught by E.E. Day

Economics 3

1912-13, 1913-14 taught by E.E. Day.

Money, Banking, and Commercial Crises (1914-15) taught by Benjamin M. Anderson.

1915-16 taught by Norman John Silberling

Money, Banking, and Commercial Crises (1917-18) taught by Benjamin M. Anderson.

1918-19, 1919-20 taught by A. E. Monroe.

1920-21 through 1926-27 taught by Allyn A. Young. Year-end exams transcribed below.

1927-28 through 1931-32 taught by John H. Williams

1932-33 taught by John H. Williams, Joseph Schumpeter and Lauchlin Currie.

1933-34 [course title: Money, Banking, and Cycles] Seymour Harris

1934-35, 1935-36 taught by John H. Williams and Seymour Harris

Economics 41

1936-37  taught by John H. Williams and Seymour Harris

Money, Banking, and Commercial Crises (1937-38) John H. Williams and Richard V. Gilbert.

1938-39 to 1941-42 taught by John H. Williams and Seymour Harris

1942-43, 1943-44 taught by Alvin Hansen and John H. Williams

1944-45 first semester taught by Schumpeter, second semester by Hansen and Williams

1945-46 Economics 41 morphed back into a two semester course “Money and Banking” taught by John H. Williams with a new one term course “Business Cycles” taught by Alvin Hansen.

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Course Description, 1924-25

[Economics] 3. Money, Banking, and Commercial Crises. Mon., Wed., Fri., at 2. Professor Young.

In this course money and credit will be studied with special reference to the part they play in the present economic system. The principal problems of public policy with respect to the control of money and banking will be discussed. Foreign exchange, organized speculation in its relation to the money market, and the characteristic phenomena of commercial crises will be considered in some detail. The course will be conducted by means of lectures, discussions, frequent short reports or exercises on assigned topics, and (in the second half-year) a thesis based on work in the library. Certain subjects, such as the monetary and banking history of the United States, will be covered almost wholly by assigned reading, tested by written papers.

Source:  Division of History, Government and Economics 1924-25 published in Official Register of Harvard University, Vol. 21, No. 22 (April 30, 1924), p. 67.

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Enrollment, 1920-21

[Economics] 3. Professor Young —Money, Banking, and Commercial Crises.

Total 148: 6 Graduates, 34 Seniors, 67 Juniors, 26 Sophomores, 3 Freshmen, 30 Others.

Source:  Harvard University. Report of the President of Harvard College 1920-21, p. 19.

 

Year-end examination, 1920-21
HARVARD UNIVERSITY
ECONOMICS 3

  1. What is a dollar?
  2. In what manner and why were bank reserves inelastic under the national banking system? What were the consequences?
  3. Discuss the relation of overproduction to crises, distinguishing carefully different types of overproduction.
  4. Outline the sequence of events in a typical business cycle.
  5. Define: federal reserve bank note, gold-exchange standard, “value of money.”
  6. In what different ways may federal reserve notes be issued?
  7. Explain and discuss the “equation of exchange.”
  8. Describe and explain the dominating position the London money market held before the war.

 

Source:  Harvard University Archives. Examination Papers 1921 (HUC 7000.28, No. 63), Papers Set for Final Examinations [in] History, Church History,…,Economics,…, Fine Arts, Music. June, 1921, p. 56.

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Course announcement, 1921-22

[Economics] 3. Money, Banking, and Commercial Crises

Mon., Wed., Fri., at 1.30. Professor Young.

Source:  Harvard University, Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences for the Academic Year, 1921-22 (Third Edition),p. 109.


Year-end examination, 1921-22
HARVARD UNIVERSITY
ECONOMICS 3

  1. Draw up a statement showing the condition of a national bank. Explain the meaning of the various items.
  2. Under what conditions is a large surplus an indication of a bank’s strength? How may it be an indication of weakness?
  3. To what classes of persons are rising prices advantageous? To what classes are they disadvantageous?
  4. Define: gold exchange standard, banker’s acceptance, finance bill, bimetallism, index number.
  5. What do you take to have been the causes of the fall of prices between 1874 and 1896?
  6. Why were “surplus reserves” under the national banking system normally exceedingly small?
  7. State and explain the Ricardian theory of gold movements. Are the recent movements of gold from Europe to the United States explainable by the Ricardian principle?
  8. What relation was there between the Bank Act of 1844 and the controversies of the restriction period?
  9. If the weight of the gold dollar were reduced by half would prices be doubled? Explain your reasoning.
  10. “The bulk of the acceptance business arising out of the foreign trade of the entire world has for many years been conducted in London.” Explain what this statement means and why it is true.

Final. 1922

 

Source:  Harvard University Archives. Examination Papers 1922 (HUC 7000.28, No. 64), Papers Set for Final Examinations[in] History, Church History,…,Economics,…, Social Ethics, Education. June, 1922.

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Enrollment, 1922-23

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 129: 6 Graduates, 33 Seniors, 75 Juniors, 11 Sophomores, 1 Freshman, 3 Others.

Source:  Harvard University. Report of the President of Harvard College 1922-23, p. 92.


Year-end examination, 1922-23
HARVARD UNIVERSITY
ECONOMICS 3

  1. Define: money of account, standard of deferred payments, inflation, gold-exchange standard, discounting.
  2. Give an account of the life-history of a typical commercial long bill of exchange, as used in international trade.
  3. Discuss the nature and significance of the par of exchange between two countries when one has a gold standard and the other has (a) a gold standard, (b) a silver standard, (c) inconvertible paper.
  4. Is New York City likely to become the center of the world’s foreign exchange markets? Discuss.
  5. In what ways are federal reserve notes and clearing-house loan certificates alike? In what ways are they unlike?
  6. Professor W. C. Mitchell holds that prosperity breeds a crisis because of (a) the gradual increase in the costs of doing business, and (b) the accumulating tension of the investment and money markets. Explain and discuss.
  7. Was the federal reserve system responsible for the rise of prices between 1917 and 1920 and for the subsequent drop? Discuss.
  8. In what ways do the federal reserve banks effect (a) regional and (b) national clearings?
  9. On what grounds is it generally held that a larger use of bank acceptances in this country is desirable?

Final. 1923.

 

Source:  Harvard University Archives. Examination Papers 1923 (HUC 7000.28, No. 65), Papers Printed for Final Examinations [in] History, History of Religions,…,Economics,…, Social Ethics, Anthropology. June, 1923.

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Enrollment, 1923-24

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 119: 2 Graduates, 25 Seniors, 81 Juniors, 5 Sophomores, 1 Freshman, 5 Others.

Source:  Harvard University. Report of the President of Harvard College 1923-24, p. 106.

 

Year-end examination, 1923-24
HARVARD UNIVERSITY
ECONOMICS 3

Answer nine questions.

  1. Explain the first and either the second or the third of these theories of the business cycle: (1) the “banking theory”; (2) Hobson’s theory of over-saving; (3) Fisher’s theory of the lagging adjustment of interest.
  2. “It thus appears that the Bank of England’s official rate is often through long periods a mere empty symbol, leaving no actual relation to the real price of money in London; and only becomes effective, and a factor in the monetary position when…” When?
  3. Draw up a statement showing the principal items which enter into the balance of payments.
  4. What conditions must be fulfilled if New York is to become the center of the world’s foreign exchange markets?
  5. State and discuss the doctrine of purchasing-power parity.
  6. Discuss the open-market operations of the federal reserve banks, with special reference to (a) the provisions of the law, (b) the purposes of such operations, (c) their relation to possible changes in prevalent types of commercial paper.
  7. Why did national bank notes constitute an inelastic currency? in just what manner do federal reserve notes constitute an elastic currency?
  8. Discuss the effect of organized speculation on prices, taking account of the fact that different types of price variations cover different periods of time.
  9. G. Moulton lists as “fallacies,” (1) the notion that a nation’s capacity to pay a foreign debt (such as reparations) is measured by the excess of its annual production over its annual consumption, and (2) the notion that a country can pay such a debt by selling securities to other countries. Do you agree? Explain.
  10. “In the main, banks do not lend their deposits, but rather, by their own extensions of credit, create the deposits.” Explain.

Final. 1924.

 

Source:  Harvard University Archives. Examination Papers 1924 (HUC 7000.28, No. 66), Papers Printed for Final Examinations [in] History, History of Religions,…, Economics,…, Psychology, Social Ethics. June, 1924.

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Enrollment, 1924-25

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 111: 1 Graduate, 22 Seniors, 72 Juniors, 12 Sophomores, 1 Freshman, 3 Others.

Source:  Harvard University. Report of the President of Harvard College 1924-25, p. 75.

 

Year-end examination, 1924-25
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Some writers hold that business cycles are caused by the expansion and contraction of bank credit. Why and how, in their view, does bank credit expand and contract?
  2. “A country can pay a foreign debt only by exporting more than it imports.” Explain and discuss critically.
  3. What was the major defect of the old national banking system?
  4. Define: rediscount, trust company, par collections, gold standard, purchasing power parity.
  5. “The Bank of England has power to exert a decisive influence over the magnitude of the gold movements to and from England.”—Furniss.
  6. What are the distinguishing characteristics (economic or legal, not physical characteristics) of the following types of money: silver dollars, United States notes, national bank notes, federal reserve notes?
  7. What are the prerequisites to the stabilizing of a depreciated paper currency?
  8. In what measure was the federal reserve system responsible for the rapid rise of prices in 1919 and 1920 and for the subsequent collapse?
  9. The federal reserve banks hold nearly $3,000,000,000 in gold, amounting to about 75 per cent of their liability on account of deposits and note issues combined, and constituting a large idle investment. Under what conditions would a considerable part of this gold be exported to other countries?

Final. 1925.

 

Source:  Harvard University Archives. Examination Papers 1925 (HUC 7000.28, No. 67), Papers Printed for Final Examinations [in] History of Science, History, …, Economics,…, Anthropology, Military Science. June, 1925.

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Enrollment, 1925-26

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 110: 31 Seniors, 64 Juniors, 8 Sophomores, 1 Freshman, 6 Others.

Source:  Harvard University. Report of the President of Harvard College 1925-26, p. 77.

 

Year-end examination, 1925-26
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Define deposits, discount, monetary standard, bimetallism.
  2. Formulate the “quantity theory” in any way that you prefer, and discuss it critically.
  3. A Brazilian firm draws a 90-day bill upon a London banker on account of a shipment of coffee to Boston.

(1) Why should the London bill be preferred to a bill upon New York or Boston?
(2) What is done with the bill after it reaches London?
(3) How is the bill finally settled?

  1. Some writers hold that when a government issues inconvertible paper money it obtains what is virtually a “forced loan.” Others hold that such an issue is more like taxation. What is your opinion, and why?
  2. Give an account of one of the following:

The socialist theory of crises.
Hobson’s theory of over-saving.
The “banking theory” of crises.

  1. Explain briefly the meaning of any two of the following phrases:

Par-collections controversy.
Open market policy.
Gold settlement fund.
Rediscounting

  1. Compare the Bank of England and either the Bank of France or the Reichsbank with respect to

(a) restrictions on note issue;
(b) discount policy.

  1. Was the federal reserve system responsible for the inflation of 1919-20 and the ensuing collapse? Explain.
  2. Just why, in your opinion, did the mark (or the franc, or the greenback) depreciate?

Final. 1926.

 

Source:  Harvard University Archives. Examination Papers 1926 (HUC 7000.28, No. 68), Papers Printed for Final Examinations [in] History, History of Religions, …, Economics,…, Social Ethics, Military Science. June, 1926.

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Enrollment, 1926-27

[Economics] 3. Professor Young and Mr. Marget.—Money, Banking, and Commercial Crises.

Total 125: 2 Graduates, 27 Seniors, 74 Juniors, 14 Sophomores, 2 Freshmen, 6 Others.

Source:  Harvard University. Report of the President of Harvard College 1926-27, p. 74.

 

Year-end examination, 1926-27
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Explain and discuss critically some form of the “banking” or “credit” theory of business cycles.
  2. “If prices are rising” Hawtrey observes, “the mere holding of commodities in stock yields an additional profit over and above the usual dealer’s percentage on the turn-over. If traders are to be deterred from borrowing money to buy commodities, the rate of discount must be high enough to offset the additional profit. But, it may be asked, how is this possible when prices are rising at the rate of 30 per cent per annum?” Hawtrey’s answer? Your own?
  3. Discuss critically either (a) Fisher’s proposals for stabilizing the price level, or (b) proposals for attaining the same end by controlling the supply of bank credit.
  4. Select two of the following and discuss their significance as “causes” of the depreciation of inconvertible paper money: (1) excessive quantity; (2) ultimate redemption uncertain; (3) unbalanced budget; (4) adverse balance of foreign payments; (5) speculation.
  5. Define: rediscounts, purchasing-power parity, invisible exports, monetary standard, par collections.
  6. Compare the note-issue system of the Bank of England (as established by the Act of 1844) with the note-issue system of the federal reserve banks, with particular reference to (a) separation of “banking” and “issue” departments, and (b) the type of assets by which the notes are “covered.”
  7. In what way or ways do purchases and sales of government securities in the New York money market by the federal reserve banks affect the state of that market?
  8. If you were Dictator of France, and took account of considerations of justice as well as of expediency, would you plan to stabilize the franc at its present (gold) value? Or would you plan for a gradual recovery of its pre-war value? Why?
  9. Discuss the relation of international gold movements to changes of (a) relative price levels, (b) relative discount rates.

Final. 1927.

 

Source:  Harvard University Archives. Examination Papers 1927 (HUC 7000.28, No. 69), Papers Printed for Final Examinations [in] History, History of Religions, …, Economics,…, Social Ethics, Military Science. June, 1927.

Image Source: Allyn Young in Harvard Classbook 1925.

 

 

Categories
Exam Questions M.I.T.

M.I.T. Core Micro Theory. Exam Questions for Resource Allocation/Price System. Weitzman, 1973

 

In earlier posts I provided transcriptions of the course outline and readings and the final examination questions for Martin Weitzman’s 1974 course on resource allocation and the price system that was the second of four half-term courses that made up the required core graduate microeconomic theory sequence at M.I.T. back then. In the approximately one hundred page typescript that he distributed for his course Weitzman also included three earlier exams from his course. These exams are transcribed below. The September exam was offered for people to place out of taking the course, the November exam would have been the actual course final examination, and I presume the following February exam was offered as a make-up examination.

An expression that Martin Weitzman was fond of saying to get us to think about the economic intuition behind some result or to motivate an argument was for us to first consider “a quick-and-dirty banker’s calculation”. The diagram above was just borrowed from a random blog post because of its “quick-and-dirty” theme and was never used by Weitzman.

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Typically three questions are answered in an hour and a half.

Exam
(September, 1973)

  1. There are n “investment opportunities” indexed by i = 1,2,…, n. Up to ci dollars can be invested in the ith investment opportunity, and each dollar so invested yields ai present value dollars back (ai > 1). There is a budget constraint limiting investment spending to M dollars.
    1. Specify the programming problem of picking investments to maximize returns subject to a budget constraint.
    2. Describe precisely the solution to the problem.
    3. What is the shadow price of an extra dollar of budget?
    4. If a new project is discovered which pays an+1 per dollar invested, should it be undertaken? Show how the shadow price of an extra dollar of budget can be used to easily give an answer. (Hint: if you are having trouble, try a numerical example.)
  2. There are n ways of combining capital with labor to produce output. The ith technique (i = 1,…,n) has coefficients ai for labor per unit of output and bi for capital per unit of output. If K units of capital and L units of labor are available, we can define a production function F(K,L) as follows:

\begin{array}{c}F\left( K,L \right)=\max \sum\limits_{i=1}^{n}{{{y}_{i}}}\\\text{subject to}\\\sum\limits_{i=1}^{n}{{{a}_{i}}{{y}_{i}}}\le L\\\sum\limits_{i=1}^{n}{{{b}_{i}}{{y}_{i}}}\le K\\{{y}_{i}}\ge 0.\end{array}

a. Prove that F(K,L) is concave and homogeneous of degree one in K and L.
b. Interpret the shadow prices associated with the inequalities in labor and capital, for a given K and L.

  1. State clearly…
    1. …the conditions under which it is possible to decentralize allocation decisions and yet achieve efficiency in a production system by using prices.
    2. Prove the theorem you have just stated, or at least sketch an outline of it.
    3. Comment on the importance of the convexity assumption. Will and non-convexity spoil the situation irreparably? What about externalities?
  2. A village owns given amounts of grade A land, and grade B. The total labor supply of \overline{L}=5 is used solely for growing corn. The production function for grade A land is {{Y}_{A}}=12{{L}_{A}}-2L_{A}^{2} and for grade B land is {{Y}_{B}}=7{{L}_{B}}-\left( 1/2 \right)L_{B}^{2}. Naturally {{L}_{A}}+{{L}_{B}}=\overline{L}.
    1. The village uses the land as communal property to give each man an equal income, i.e., everyone gets an amount of A land or an amount of B land which yields each one the same output when he works it. Spell out in detail what this solution implies. Is this an efficient social production scheme? Why or why not?
    2. Suppose the village chief hires a consultant from 14.122. His problem is to maximize total output (YA+ YB) subject to production constraints. Then returns are equally distributed. What is the solution? What is the marginal product of labor?
    3. Let the marginal product of labor from (b) be w. Now show that if plots A and B are run as profit-maximizing firms with w being the wage rate (maximize separately {{Y}_{A}}-w{{L}_{A}} and {{Y}_{B}}-w{{L}_{B}}), that society ends up with the same solution as in (b). What does this mean? What is the difference between (b) and (c) especially as regards workers’ welfare? Are the workers better off under (a) or (c)? Would your answer have to be the same if the production functions changed? Explain.
  3. The following table specifies four processes for the production of steel. Assume
    1. factors of production are perfectly divisible and transferable among processes,
    2. all processes exhibit constant returns to scale,
    3. the wage rate is $10 per man/day,
    4. production is always efficient.
Factor requirements/ton of steel/day
Process No. Man-days Machine days
1 2 5
2 4 3
3 2 2
4 6 1

(i) Initially only processes 1 and 2 are known and both are in use. Draw one diagram showing the unit isoquant for steel production and another showing the long-run average total cost curve for steel production. Indicate the magnitude of long-run average total cost per ton of steel on your cost diagram.
(ii) Show on the relevant diagrams the unit isoquant and long-run average total cost curve which prevail after the discovery of processes 3 and 4.
(iii) Suppose that prior to the change in technology some firm was producing 10 tons of steel per day by operating each process at a level of 5. On your cost curve diagram show this firm’s short-run average total cost curve before and after the change in technology. Indicate the magnitude of any shifts in the cost curve on your diagram. (Note: in the short-run labor can be hired in any desired amount but the total amount of machinery a firm possesses is fixed.).

 

Exam
(November, 1973)

  1. There are n types of machine, indexed by i= 1,2,…, The ith type of machine is designed to work with {{\alpha }_{i}} workers, in which case it produces {{\beta }_{i}} units of output. There are {{\gamma }_{i}} machines of type i available.
    1. Formulate the problem of finding the minimum amount of labor to produce a given amount of output, say .
    2. Describe precisely the solution to the problem for arbitrary .
    3. What is the shadow cost of an extra unit of output and why?
    4. What is the shadow rental on a machine of type iand why?
    5. If a new machine is discovered of type n+1 with specification {{\alpha }_{n+1}}, {{\beta }_{n+1}}, {{\gamma }_{n+1}}, should it be used? Show how the shadow cost of an extra unit of output can be used to easily give an answer.
  2. There are n plots of land. Land of type i (i= 1,…,n) can be used to grow either ai bushels of wheat or bi bushels of rye (or the appropriate combination).
    1. Characterize efficient specialization patterns for these n plots of land. Which land should grow which crop and why?
    2. Suppose (as in a competitive market economy) a price of wheat is announced and also a price of rye. Then every plot grows the profit maximizing crop. Is this efficient? Why or why not? (show directly).
    3. Show how a supply of wheat curve would be derived in a market economy. Is it upward sloping? Why or why not?
  3. A firm consists of two plants. For each of statements (a) and (b), either prove the statement or give a counterexample. Be precise.
    1. The firm’s overall production plan will be efficient whenever each plant is producing efficiently.
    2. If both plants are maximizing profits at the same prices, the resulting overall plan will be efficient for the firm.
  4. There are two products in an economy (guns and cars) and two basic factors of production (A and B). There are n techniques for producing guns: the ith technique uses ai units of A and bi units of B per gun. Similarly there are m techniques for producing cars: the ith technique uses up ai units of A and bi units of B per automobile. The economy has a total availability of units of A and units of B.
    1. Define carefully the production possibilities set for this economy. Sketch roughly what it looks like in the space of cars and guns.
    2. Prove that it must be convex (what does this mean geometrically?).
    3. State carefully why (b) is important for the possibility of effective indirect or decentralized control (using prices) of the way guns and cars will be produced.
  5. We derived the result that a free market competitive allocation of resources is efficient. Does this mean that a market system is the best way to organize an economy in the sense that it gives the greatest benefits? Why or why not? What are the major real world situations which would cause an exception to the above cited “result” in a real life market economy? Try to be as specific as possible in showing why and where the efficiency result breaks down for each cited example.
  6. Suppose a firm or economy consists of a number of divisions or subsectors, each of which is characterized by a convex technology. Then any efficient plan will have associated with it a set of prices (one for each good, the same prices for each subsector) such that the efficient plan is sustained by having each subsector maximize its own profits. Outline a detailed sketch of how the proof of such an assertion goes. Why is this sometimes called a “decentralization theorem”. What does it suggest as a way of efficiently organizing production?
  7. An organization has 2 inputs and 2 outputs, and a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
Activity a b c d e f g
Good 1 2 1 2 1 1 3 1
Good 2 0 2 1 1 1 1 3
Good 3 -2 -4 -3 -1 -3 -5 -6
Good 4 -2 -3 -4 -3 -1 -5 -4

a. Consider a plan to run activities (a, d,e) at a positive level. If this were an efficient plan, what shadow prices would be associated with it?
b. Is this plan efficient, in fact? Prove your answer by appealing to particular theorems or results.
c. Consider a plan to run activities (a, b,d) at a positive level. Is this an efficient? Why, or why not?

 

Exam
(February, 1974)

  1. A firm consists of two plants. There are no externalities. For each of statements (a) and (b), either prove the statement or give a counterexample. Be precise.
    1. The firm’s overall production plan will be efficient whenever each plant is producing efficiently.
    2. If both plants are maximizing profits at the same positive prices, the resulting overall plan will be efficient for the firm.
        An organization has a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
  2. An organization has a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
Activity a b c d e f g
Good 1 2 1 2 4 0 3 0
Good 2 2 5 1 0 -1 1 2
Good 3 -1 -3 -1 -1 1 -2 0
Good 4 -2 -3 -4 -4 -3 -3 -1

a. Consider a plan to run activities (a,d,e) at a positive level. If this were an efficient plan, what shadow prices would be associated with it?
b. Is this plan efficient, in fact? Prove your answer by using the prices from (a) and appealing to particular theorems or results.
c. Consider a plan to run activities (a,d,g) at a positive level. Is this an efficient plan? Why, or why not?

  1. State…
    1. …clearly the conditions under which it is possible to decentralize allocation decisions and yet achieve efficiency in a production system by using prices.
    2. Prove the theorem you have just stated, or at least sketch an outline of it.
    3. Comment on the importance of the convexity assumption. Will any non-convexity spoil the situation irreparably? What about externalities?
  2. The following table specifies four processes for the production of steel. Assume
    1. factors of production are perfectly divisible and transferable among processes,
    2. all processes exhibit constant returns to scale,
    3. the wage rate is $10 per man/day,
    4. production is always efficient.
Factor requirements/ton of steel/day
Process No. Man-days Machine days
1 1 2.5
2 2 1.5
3 1 1
4 3 .5

(i) Initially only processes 1 and 2 are known and both are in use. Draw one diagram showing the unit isoquant for steel production and another showing the long-run average total cost curve for steel production. Indicate the magnitude of long-run average total cost per ton of steel on your cost diagram.
(ii) Show on the relevant diagrams the unit isoquant and long-run average total cost curve which prevail after the discovery of processes 3 and 4.
(iii) Suppose that prior to the change in technology some firm was producing 10 tons of steel per day by operating each process at a level of 5. On your cost curve diagram show this firm’s short-run average total cost curve before and after the change in technology. Indicate the magnitude of any shifts in the cost curve on your diagram. (Note: in the short-run labor can be hired in any desired amount but the total amount of machinery a firm possesses is fixed.)

  1. Consider the following production function:Y={{T}^{\alpha }}{{L}^{1-\alpha }}
    where Y is output, T and L are inputs and 0 < {{\alpha }} < 1.

a. Prove that this production function has constant returns to scale.
b. Describe the production set that corresponds to this production function. Which points are efficient?
c. Given an arbitrary efficient point (Y*, T*, L*), find the shadow or efficiency prices associated with that point.
d. Prove that the production set is convex.

  1. Let i be an index of land plots running from 1 to 10. The higher the index, the more moisture in the soil. Either rye or wheat can be grown. Land of type i (i=1,…,10) can costlessly produce either 5 units of rye or i units of wheat (or an appropriate combination).
    1. If a total of 30 units of rye is to be grown, what is the most wheat that can also be obtained?
    2. For the same situation as in (a), what are the shadow prices of wheat and rye? Explain fully what these shadow prices mean. What is the shadow rent on land of various types?
    3. Describe in general the efficient patterns of specialization. Which land should grow which crop and why?
    4. Derive the supply of wheat curve and show what it looks like.
    5. Verify that any profit maximizing output combination is efficient.

Source:  Martin Weitzman’s Notes to 14.122, personal copy of Irwin Collier, pp. 88-97.

Image Source: Blogpost: “The truth about quick and dirty” POSTED BY NIK ⋅ 10 JULY 2007 at niksilver.com

Categories
Economic History Harvard Suggested Reading

Harvard. Economic History to 1450. Readings and paper topics, Usher. 1934

 

What is nice about this particular economic history reading list is that it is not an extended bibliography but actually quite limited and specific, thereby giving us a better sense of the actual course content. The reading list had 1933-34 crossed out in the heading and 1934-35 penciled in. Note as of 1933-34, the Harvard course numbering was changed from Economics 23 to Economics 21.

_________________

Course Enrollment

[Economics] 21 1hf. Associate Professor Usher.—Economic History to 1450.

Total 4:  2 Gr., 2 Se.

Source:Harvard University. Annual Report of the President of Harvard College for 1934-1935, p. 82.

_________________

Course Description [1932-33]

[Economics] 23 1hf. Economic History to 1450
Half-course (first half-year). Two hours each week, to be arranged. Associate Professor Usher.

The purpose of the course is to afford opportunity for careful study of the more important episodes in the period under survey. Attention will be concentrated upon the following problems: the economic aspects of the period extending from the accession of Constantine to the death of Charlemagne; the economic institutions and social conditions in the thirteenth and fourteenth centuries, with emphasis upon Italy and France.

 

Source:  Division of History, Government, and Economics 1932-33in Official Register of Harvard University,Vol. 29, No. 32 (June 27, 1932) p. 78.

_________________

Economics 21.
1934-35

Required reading.

  1. The early Christian period, to be completed Oct 27.

Usher, A. P. History of population and settlement in Eurasia, Geographical Review, vol. XX, pp. 110-132.
Usher, A.P. Industrial History of England, pp. 1-52.
Usher, A. P. History of Mechanical Inventions, pp. 1-31, 66-120.
Pirenne, H. Medieval Cities, pp. 1-108.
Poissonade, P. Life and labour in medieval Europe, pp. 1-61, 102-118.
Lewinsky, The origin of property in land, pp. 1-71.

 

  1. The middle ages, to be completed Dec. 22

Boissonade, P. Life and labour in medieval Europe, pp. 132-149, 159-225, 239-263, 286-315.
Vinogradoff, P., Villeinage in England, pp. 43-88, 223-277.
Pirenne, H. Belgian democracy and its early history, pp. 1-54, 76-107.
Usher, A.P. Industrial history of England, pp. 52-86, 165-191.
Usher, A.P. History of mechanical inventions, pp. 121-200.
Gras, N.S.B. Evolution of the English Corn Market, pp. 3-64.
Thompson, J.W. The Economic and Social History of the Middle Ages, pp. 565-602.
Power, E. and Postan, M.M. English trade in the fifteenth century, pp. 247-292.
Thompson, J.W. The Economic History of the Later Middle Ages, pp. 431-461.
Holdsworth, W.S. History of English Law, vol. VIII, pp. 99-205, 222-229.
Usher, A.P. Deposit banking in Barcelona, Journal of Economic and Business History, vol. IV. pp. 121-155.
[in pencil added “or Usher. Origins of Banking: the primitive bank of deposit” (1200-1600)]

 

Reading period.

Two hundred pages from any title not used by the student for the essay.

Dill, S. Roman society in the last century of the western Empire.
Dill, S. Roman society in Gaul in the Merovingian period.
Rostovtzeff, M. Social and economic history of the Roman Empire.
Yule, H. Cathay and the way thither.
Vinogradoff, P, The growth of the Manor.
Unwin, G. The gilds and companies of London.
Anderson, Romola C. The sailing ship.
Burns, A.R. Money and monetary policy in early times.

 

Economics 21
Topics for Essays

An essay of about 2000 words will be due Dec 22 on one of the following topics, or by special arrangement upon some subject suggested by the student. (About 300 pages of reading is assumed.)

  1. The development of the colonate under the Roman Empire

Pelham, H.F. The imperial domains and the colonate.
Gras, N.S.B. A history of agriculture.
Clausing, R. The Roman colonate.
Rostovstzeff, M. Studien zur Geschichte des Römischen Kolonates.

  1. Ausonius and Gregory of Tours: a study of the intellectual life of the late Empire and the Frankish kingdom.

Dalton, Gregory of Tours.
Brehaut, E. Gregory of Tour’s History of the Franks.
Byrne, M.A. Prolegomena to an edition of the works of Ausonius.
White, H.C.E. Ausonius.

  1. Magnates and common people.

Carlyle, T. Past and Present.
The Chronicle of Jocelin of Brakelonde.
Hone, N.J. The Manor and manorial records.

  1. The origin of property in land.

Lapsley, G.T. The origin of property in land, American Historical Review, VIII, p. 426.
Maine, H. Sumner. Village communities in the East and West.
Vinogradoff, P. The growth of the Manor.

  1. The commerce of Genoa.

Byrne, E.H. Genoese shipping.
_________. Genoese trade with Syria, American Historical Review, XXV, p. 191.
_________. Commercial contracts of Genoese in Syrian trade, Quarterly Journal of Economics, XXXI, p. 128.
Finot, J. Étude historique sur les relations commerciales entre la Flandre et la république de Gênes au moyen âge.
Bent, G.T. Genoa.

  1. Moslem geography and travel from the ninth to the fourteenth centuries.

Wright, J.K. Geographical lore of the time of the Crusades.
Schoy, C. The geography of the Moslems of the middle ages, Geographical Review, XIV, pp. 257-269.
Le Strange, G. Lands of the Eastern Caliphate.
Barbier de Meynard, C. Le Livre des routes et provinces, Journal Asiatique, 1865, pp. 227-295.
Defremery, C. et Sanguinetti, B.R. Les voyages de Ibn Battûta.

  1. The industries and gilds of Florence.

Renard, G. Histoire du travail à Florence.
Doren, A. Entwickelung und Organisation der Florentiner Zünfte im 13. und 14. Jahrhunderts.

  1. The industries and gilds of Douai.

Espinas, G. La vie urbaine de Douai au moyen âge.

  1. The fairs of Champagne and Brie.

Huvelin, P. Essai historique sur les droits des marchés et des foires.
Alengry, C. Les foires de Champagne.
Basserman, Elisabeth. Die Champagner Messen.
Bourquelot, F. Études sur les foires de Champagne, Memoire de l’Académie des Inscriptions et de Belles-Lettres. Paris, 1865.

  1. The English wool trade and its organization.

Power, E. and Postan, M.M. English trade in the 15thcentury.
Jenckes, A.L. The origin, the location and the organization of the staples of England.

  1. European travellers to the Middle and Far East in the 12thand 13thcenturies.

Marco Polo. Travels.
Yule, H. Cathay and the way thither.

  1. Earlier history of the Worshipful Company of the Drapers of London.

Johnson, A.H. The history of the Worshipful Company of the Drapers of London.

 

Source:   Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003.(HUC 8522.2.1) Box 2, Folder “Economics, 1934-35”.

Image Source:  A. P. Usher in Harvard Class Album 1934.

Categories
M.I.T. Suggested Reading Syllabus

M.I.T. Core Micro Theory. Resource Allocation/Price System. Weitzman, 1974

 

For the second half of the first term of 1974-75, Martin Weitzman distributed a 100 page typescript for his lectures in the four half-course sequence of core microeconomic theory. The typescript consisted of 87 pages of lecture notes, 10 pages of final exam questions from previous years and three pages of course outline and select references. The order of Robert Bishop’s and Weitzman’s courses were reversed starting with the 1974-75 academic year so that the numbering for Weitzman’s course was changed from 14.121 to 14.122. 

Weitzman’s course outline and reading list have been transcribed below.

The final exam questions for this Fall, Term 1974 course have been posted earlier. Note: the old course numbering was used (14.121) on the exam. In a coming post I’ll provide the final exam questions from earlier years.

_____________________

Course Description corresponding to 14.122

14.121 Microeconomic Theory I
Prereq.: 14.04
Year: G(1)
2-0-4

[Instructors: D. K. Foley (1972/73); Martin Weitzman (1973/74)]

Introduction to the theory of resource allocation and the price system. Decentralization of economic decisions. Competitive equilibrium Pareto optimality. Productive efficiency.

Source:
M.I.T. Annual Catalogue, 1972/73, p. 95D.
M.I.T. Annual Catalogue, 1973/74, p. 268.

_____________________

 

Outline and Selected References

Topics

Activity Analysis Model of Production

Activity Vectors
Production Sets
Production Functions

Prices and Efficiency

Price Systems
Profit Maximization
Efficiency

Duality Theory

Convexity
Separating Hyperplanes
Shadow Prices
Cost Functions and Factor Demand

Comparative Systems and Other Applications

Efficiency Prices and Decentralized Decision Making
Externalities and Non-Convexities
Efficiency and Distribution
Foundations of Cost Benefit Analysis

 

Background References

(if time permits, it might be useful to read these before taking 14.122)

T.C. Koopmans, Essay I in Three Essays on the State of Economic Science.
W.J. Baumol, Operations Research and Economic Theory, chs. 1-8, 12, 21.

 

Reading List(14.122)

Readings should be considered as background material for the lectures. At certain times they can be of help in clarifying a topic which has been only briefly treated in class. The reading material listed here is redundant to some extent and the degree to which you will wish to consult outside reading sources should depend among other things on your preparation for the course and the extent to which you feel you understand the subject matter.

The reading list is arranged by topics.

  1. The Activity Analysis Model

A.S. Manne, Economic Analysis for Business Decisions, chs. 1, 2.
E. Malinvaud, Lectures on Microeconomic Theory, ch. 3, sects. 1-3.
Dorfman, Samuelson, and Solow, Linear Programming and Economic Analysis, ch. 6.
T.C. Koopmans, ch. 1, ch. 3, sects. 3.1-3.7, of “Allocation of Resources and the Price System”, essay 1 of Three Essays on the State of Economic Science.
W.J. Baumol, Operations Research and Economic Theory, ch. 12.
G.W. Dantzig, Linear Programming and Extensions, chs. 1-3.
D. Gale, The Theory of Linear Economic Models, ch. 1, sect. 1

  1. Prices and Efficiency

L.V. Kantorovich, The Best Use of Economic Resources, intro. and ch. 1.
Koopmans, ch. 3, sects. 3.8-3.14.
Malinvaud, ch. 3, sects. 4-8.

  1. Duality Theory

D. McFadden, An Econometric Approach to Production Theory.
Gale, ch. 1, sects. 2-4.
Dantzig, ch. 12.
Dorfman, Samuelson, and Solow, chs. 7,8.

  1. Applications and Extensions

T.C. Koopmans, “Efficient Allocation of Resources” and “Uses of Prices”, pp. 211-221 and 243-257 in Scientific Papers of Tjalling C. Koopmans.
Baumol, ch. 8, sects. 1-3, ch. 16.
W. Nicholson, Microeconomic Theory, pp. 451-456, ch. 25.
M.L. Weitzman, “Free Access vs. Private Ownership as Alternative Systems for Managing Common Property”, paper on reserve.
T. Scitovsky, Welfare and Competition, chs. 12-14.

 

Source: Personal copy of Irwin Collier.

Image Source: Detail from 1976 MIT economics department group picture.

 

 

 

 

Categories
Johns Hopkins Seminar Speakers

Johns Hopkins. Economic Seminary, presenters and topics. 1924-25

 

The graduate economic seminary at Johns Hopkins University kept good records of the weekly sessions so that we know the names of all the presenters and their topics. I have added the academic backgrounds from the published Johns Hopkins Circular for almost all the graduate students either attending or presenting.

The economic seminary schedule for the following years have also been posted:

1903-1904
1904-1905

1922-1923
1923-1924
1924-1925
1925-1926
1926-1927

_____________

POLITICAL ECONOMY
GRADUATE COURSES

The graduate instruction in Political Economy is designed primarily to meet the needs of advanced students preparing for a professional career in economic science. The courses afford systematic instruction in general economic principles, intimate acquaintance with special fields of economic activity, and, most important of all, knowledge of and ability to employ sound methods of economic research. The work centres in the Economic Seminary, the membership of which is limited to the most advanced students, and the primary design of which is to develop scientific research in economic study and investigation…

…The Economic Seminary

Two hours weekly through the year.Professors Hollander and Barnett.
Wed., 2 p.m. Gilman Hall 315.

The work of the year will be the study of representative forms of industrial development in the United States, and the analysis of significant activities of American labor organizations.

 

Source: The Johns Hopkins University Circular, Vol. 45 (March 1926), pp. 67-68.

_____________

MEMBERS OF THE ECONOMIC SEMINARY
1924-1925

[G = Graduate School of Arts and Sciences, the small “s” following a capital letter indicates a special student.]

Bloch, Kurt (Dr. ) (G) I. Ph.D. Frankfurt University 1922. Political Science.

Dempster, Margaret (SE) (G) II. A.B. Goucher College 1923. Political Economy.

Evans, George Heberton, Jr. (G). A.B. Johns Hopkins University 1920. Political Economy.

Hart, William Sebastian (Gs) I. A.B. Johns Hopkins University 1924. Political Economy.

Howard, Charles Harold (G) I. S.B. Gettysburg College 1923. Political Economy.

Jones, Sallie Elizabeth (SE) (G) II. A.B. Goucher College 1923. Political Economy.

Kemp, Maude Pustan (SE) (Gs) II. A.B. Wittenberg College 1923. Political Economy.

Marshall, Rebecca Snowden (G) I. A.B. Bryn Mawr College 1923. Political Economy.

Mitchell, George Sinclair (G) II. A.B. University of Richmond 1923. Political Economy.

Morrissy, Elizabeth (Gs) IV. A.B. Beloit College 1908; A.M. Johns Hopkins University 1922. Political Economy.

Moyer, Margaret Elizabeth (G) II. S.B. Florida State College for Women 1923. Political Economy.

Newman, Andrew Jackson (Gs) I. A.B. Washington University 1910; A.M. University of Missouri 1911. Political Economy.

Nussman, Lillian Mabel (SE) (G) II. A.B. Holllins College 1923. Political Economy

Powlison, Keith Eon (Ts) (BE) (G) I. A.B. Columbia College 1922. Political Economy

Shocket, Louis (G) II. A.B. University of Richmond 1923. Political Economy

Shaw, K. W.

Swanson, Mary Laura (SE) (G) II. A.B. Provincial University 1923. Political Economy

 

October 15, 1924

The opening meeting of the economic seminary of the session was held in room 315 on Wednesday at 2 o’clock. Professor [Jacob H.] Hollander read a paper on “The American School of Political Economy”.

October 22, 1924

Professor [George E.] Barnett read a paper on “The Introduction of Glass Bottle Blowing Machinery”.

October 29, 1924.

Associate Professor [William O.] Weyforth read a paper on “National Bank Notes.”

November 5, 1924

Dr. [Broadus] Mitchell read a paper on the “Child Labor and the Southern Cotton Manufacturing Industry”.

November 12, 1924

Miss Jacobs read a paper on “The Health Officer and the Social Worker”.

November 19, 1924

Mr. [George Heberton] Evans [Jr.] read a paper on “Apartment Rents in Baltimore”.
[(G) V; A.B. Johns Hopkins University 1920. Political Economy]

November 26, 1924

Thanksgiving recess.

December 3, 1924

Mr. [George Sinclair] Mitchell read a paper on the “Unionism in the Textile Industry”.

December 10, 1924

Mr. [Louis] Shocket read a paper on the “Influence of the Jews on the Unions of the Needle Trades”.

December 17, 1924

Dr. [Kurt] Bloch read a paper on “Knapp’s State Theory of Money”.

December 24 and 31, 1924

Christmas Recess.

January 7, 1925

Miss [Elizabeth] Morrissy read a paper on “Unemployment Insurance in the Clothing Industry”.

January 14, 1925

Professor [Jacob H.] Hollander read a paper on “Liberalism and Taxation”.

January 21, 1925

Professor [George E.] Barnett read a paper on “The Introduction of Automatic Glass Bottle Machinery”.

January 28, 1925

Mrs. [Louise Cleret] Seibert read a paper on the “French Labor During the War”.

February 4, 1925

Dr. [Kurt] Bloch read a paper on “The Dawes Plan”.

February 11, 1925

Dr. [William O.] Weyforth read a paper on the “National Bank Notes”.

February 18, 1925

Mr. [George Sinclair] Mitchell read a paper on “Some Minor American Economists”.

February 25, 1925

Mr. [Louis] Shocket read a paper on “The Experience of the Jewish Clothing Workers in Russia”.

March 4, 1925

Mr. [George Heberton] Evans [Jr.]: “Unreliability of a Sample of Apartment Rentals in Baltimore”.

March 11, 1925

Mr. [George Sinclair] Mitchell: “History of the Textile Unions”.

March 18, 1925

Dr. [Kurt] Bloch: “Reparation Payments under the Dawes Plan”.

March 25, 1925

Mr. [Keith] Powlison: “Hours of Labor”.

April 1, 1925

Mrs. [Louise Cleret] Seibert: “French Labor During the War”.

April 8, 1925

Easter Recess.

April 15, 1925

Mr. [Leonard Owens] Rea: “Municipal Indebtedness”.
[(G) I; A.B. Johns Hopkins University 1924. Political Science]

April 22, 1925

Mr. [Andrew J.] Newman: “Legal Avoidance of the Federal Income Tax”.

April 29, 1925

Mr. [Charles Harold] Howard: “Seniority in the Railway Brotherhoods”.
[S.B. Gettysburg College 1923. Political Economy]

May 6, 1925

Mr. [William Sebastian] Hart: “Labor Turnover in Department Stores”.
[(Gs) I; A.B. Johns Hopkins University 1924. Political Economy]

May 13, 1925

Miss [Margaret] Dempster: “The Adequacy of Workmen’s Compensation in Maryland”; Miss [Maude] Kemp: “Financial Campaigns of Social Agencies”.

May 19, 1925

Mr. [Jacob Elry] Metzger: “Agricultural Practice in Maryland, 1865-1924”.
[(Gs) III; S.B. Pennsylvania State College 1911. Plant Physiology]

May 20, 1925

Miss [Margaret E.] Moyer: “Individualization in Social Case Work”; Miss [Mabel] Nussman: “Follow-up Work in a Venereal Clinic”.

May 21, 1925

Miss [Sallie E.] Jones: “Ex-Wards of the Henry Watson Children’s Aid Society”; Miss [Laura] Swanson, “Organizations Among Poles in Baltimore”.

Seminary ended for the year.

 

Source:   Johns Hopkins University. Eisenhower Library, Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 1. Minutes of the Economic Seminary, 1892-1951. Folder “1922-1940”.

 

The Johns Hopkins University Circular, University Register, 1924-25, (November 1924, Vol. 43, No. 355).

The Johns Hopkins University Circular, Annual Report of the President of the Johns Hopkins University 1924-1925, (October 1925, Vol. 44, No. 364), p. 74. Also lists names and topics for seminar speakers.

Image Source: Webpage “Gilman Hall circa 1920” in the Hopkins Perspective, 1876-Today collection.

Categories
Exam Questions Oxford

Oxford. Five Economics Exams. Intro, Intermediate, History, International, Money & Banking, 1902

 

Something I find particularly interesting in the following five exams is that the second course in political economy at Oxford in 1902 was based upon the American textbook, Political Economy, by Francis A. Walker.

________________

SECOND PUBLIC EXAMINATION.
Pass School. Group B. 3.
Political Economy. I.

Adam Smith’s Wealth of Nations.

Time allowed—3 Hours.

  1. “Why have gold and silver been commonly chosen as the material of money?
  2. How far did Adam Smith anticipate (a) the Malthusian theory of population, (b) the law of diminishing returns?
  3. Explain why the earnings of labour are different in different occupations.
  4. Give an account of the Mercantile System and describe the chief methods adopted under its influence.
  5. In what ways have the results of free trade in England differed from those suggested as probable by Adam Smith?
  6. Compare Greek, Roman, and modern colonies as to (a) the motives which led to their foundation, and (b) the conditions of their prosperity.
  7. In what ways, besides taxation, may a state raise revenue? Are any of them important in England at the present time?
  8. What information is given by Adam Smith as to the condition of Hindostan, China, Holland, and Scotland?
  9. Give Adam Smith’s views on—

(a) the importance of the carrying trade;
(b) the expediency of usury laws;
(c) hearth money;
(d) taxes on ale-houses;
(e) land taxes.

  1. Explain and examine the following:—

(a) ‘Labour is the real measure of the exchangeable value of all commodities.’
(b) ‘The whole price of any commodity must finally resolve itself into some one or other or all of three parts.’

[T. T. 1902.]

 

SECOND PUBLIC EXAMINATION.
Pass School. Group B. 3.
Political Economy. II.

Walker’s Political Economy.

Time allowed—3 Hours.

  1. Explain the law of diminishing returns. What is its bearing on the theory of Rent?
  2. To what extent is the condition of the working-classes affected by the absence of perfect competition?
  3. What are the conditions which favour the growth of capital in a country?
  4. What is the connexion between Cost of Production and the Price of a Commodity?
  5. Under what circumstances is it expedient for a country to import goods although it could produce them more cheaply than the country from which they are imported?
  6. Why are the total exports from a country and the total imports into it not usually equal in value?
  7. Describe the chief functions of a modern bank.
  8. What is Bimetallism? What claims are made on its behalf, and how far are they valid?
  9. What is a protective duty? Under what circumstances, if any, is such a duty expedient?
  10. Explain the following phrases: — economic man, territorial division of labour, debasement of coin, depreciation, tabular standard, Gresham’s law, the theory of the diffusion of taxes.

[T. T. 1902.]

Source: Oxford University Examination Papers, Second Public Examination, Pass School, Group B.3. Trinity Term, 1902, pp. 29-30.

________________

 

SCHOOL OF MODERN HISTORY.
Political Economy and Economic History.

[Candidates must answer questions from both sections of the paper.]

I.

  1. What circumstances, in Mill’s opinion, make (a) Wages high, (b) Profits low, (c) Interest vary, (d) Rents fall?
  2. Enumerate, explain, and, if necessary, criticize Mill’s four fundamental propositions respecting Capital.
  3. Explain, with examples, the operation, advantage, and danger of the Credit system, as it exists in England.
  4. Distinguish the forces by which value is determined from the means by which it is measured, and give a careful discussion of the latter.
  5. Discuss Mill’s views upon any one of the following:—

(a) Unproductive Labour.
(b) Competition.
(c) Equality of Taxation.
(d) An inconvertible paper currency.

  1. Comment on the following passages from Mill:—

(a) Hardly anything worse can be said of the worst laws on the subject of industry and its remuneration than that they place the energetic and the idle, the skillful and the incompetent, on a level: and this, in so far as it is in itself possible, it is the direct tendency of the regulations of these unions to do.
(b) The exchange value of a thing may fall short, to any amount, of its value in use; but that it can ever exceed the value in use, implies a contradiction.
(c) A thing may sometimes be sold cheapest, by being produced in some other place than that at which it can be produced with the smallest amount of labour and abstinence.
(d) It must be remembered, too, that general high prices, even supposing them to exist, can be of no use to a producer or dealer, considered as such; [sic]

  1. Define Free Trade. How far do (a) countervailing duties, (b) the recent Tax on imported corn, run counter to the principles contained in your definition?

II.

  1. Do you consider that the economic prosperity of England has been attained by means of, or in spite of, Legislation?
  2. What were the advantages and disadvantages of the Manor System to the peasant?
  3. Do you think that Economic History can be profitably studied apart from the study of Political Economy?
  4. Explain any of the following:—Staple Towns; Convertible Husbandry; Drawbacks; Gresham’s Law; Navigation Acts; Truck Acts; Sinking Fund; Libelle of English Polycye.
  5. Compare the debt which England owes to wool with that which she owes to iron.
  6. Explain and comment upon the following:—
    (a) Therefore, to speak of the abolishing of usury is idle. All states have ever had it, in one kind or rate, or other. So as that opinion must be sent to Utopia. (Bacon’s Essays.)
    (b) In agriculture, too, Nature labours along with man; and though her labour costs no expense, its produce has its value, as well as that of the most expensive workmen. (Adam Smith.)
    (c) To found a great Empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers. (Adam Smith.)
  7. How far did the agricultural improvements of the eighteenth century make the Industrial Revolution possible?

[T. T. 1902.]

 

SCHOOL OF MODERN HISTORY.
Political Economy. A.
Foreign Trade.

  1. ‘The one condition at once essential to, and also sufficient for, the existence of international trade is a difference in the comparative as distinguished from the absolute cost of producing the commodities exchanged.’ Cairnes, cited by Bastable.
    Explain the principle referred to; and give examples from the commercial history of the nineteenth century of mistakes in policy which may be traced to want of acquaintance with this principle.
  2. ‘Tiefgreifende Umwälzungen der Vermögensverhältnisse, wie sie unter Ricardo’s Voraussetzungen zu erwarten sind, können nicht nur für die Kapitalisten, sondern auch für die Masse der Arbeiterbevölkerung so grosse Uebel erzeugen, dass man häufig vorziehen muss, auf eine an sich zweckmässigere internationale Verteilung der Production zu verzichten…. Es ist vorsichtig, darauf zu achten, dass die Wegräumung der schützenden Schranken keine gemeinschädliche Erschütterung des Wirtschaftslebens verursacht.’
    ‘Sogenannte Erziehungszölle haben…für die auf der normalen Höhe der Entwicklung stehenden Kulturstaaten keinen Sinn und Zweck mehr.’ (Lexis.)
    Translate and comment on these passages.
  3. Trace the history of the Corn Trade from 1815 to Referring to Canning’s speech on the Corn Law in the latter year, criticize the measure then proposed by him.
  4. What were the advantages claimed by Macaulay, Peel, and Cobden, for a free trade in corn; and to what extent were these advantages realized by the abolition of the Corn Laws?
  5. Give some account of the Merchant’s Petition in 1820; and trace through the next six years the reforms in commercial policy of which it was the harbinger.
  6. ‘To re-establish duties upon the import of foreign produce, to be regulated by the principle of reciprocity, would be accompanied with insuperable difficulties.’ (Peel.)
    Give instances of the principle of reciprocity being employed by statesmen of the Free Trade persuasion with success.
  7. ‘The Budget of 1860 completed the work of freeing the Statute Book of the United Kingdom from the vast series of tolls which for many hundreds of years had cumbered its pages.’ (Report on the Customs Tariffs, 1897.)
    Review the simplifications of the tariff effected between 1840 and 1860; mentioning instances in which the remission of taxation was attended with an increase of revenue.
  8. Point out some of the difficulties attending the use of import and export statistics. Why is the money value of exports, both (a) absolutely and (b) relatively to that of imports, an imperfect measure of a country’s industrial prosperity?

[T. T. 1902.]

 

SCHOOL OF MODERN HISTORY.
Political Economy. B.
Currency and Banking.

  1. Mention and criticize some of the doctrines combated by Horner and Canning in their defence of the Report of the Bullion Committee.
  2. By what arguments did Ricardo defend the Resumption of Cash Payments against Mr. Western in 1822? Comment upon the ‘opinion which he (Mr. Ricardo) had given of the effect which had been produced on the value of gold by the purchases [of gold] made by the Bank.’
  3. ‘No currency can be good of which the permanent average value does not conform to the permanent average value of a metallic currency; but I do not admit the inference that in order to enable it to do this, its fluctuations in value must conform to the fluctuations in the value of a metallic currency.’ (J. S. Mill.)
    Compare Mill’s doctrine as to the regulation of a convertible currency with that which is embodied in the Bank Act of 1844.
  4. ‘The value of money is settled like that of all other Commodities by supply and demand and only the form is essentially different.’ (Bagehot.)
    Apply this statement to variations in the rate of discount on the London money-market.
    Is there any connexion between fluctuations of discount and permanent changes in the level of general prices?
  5. ‘The question what is the relation between the amount of money in a country and the general scale of prices existing therein’ is ‘perhaps the one upon which the most contradictory opinions have been expressed by economists of reputation.’ (Walker.)
    Express your opinion on this question; referring to the views of leading economists, in particular those of Professor Marshall.
  6. ‘A joint supply of gold and silver will probably be more stable than a supply of either metal separately.’ (Foxwell.)
    Does the principle involved in this statement—the tendency of independent variations to compensate each other—form a strong argument in favour of Bimetallism?
    With what success could the principle be applied to the use of a ‘tabular standard’—based on the variation in the prices of several commodities—for deferred payments?
  7. ‘It is agreed on all sides that violent fluctuations of prices are an evil in the long run; but the difference of opinion is as to whether it is the sudden rise of prices, or the subsequent fall which is mainly responsible for the evil.’ (Marshall.)
    ‘An appreciation of gold will upon the whole tend to put a drag upon production.’ (Foxwell.)
    Compare and comment on the views of Professors Marshall and Foxwell as to the detriment caused by a change in the level of prices.
  8. How would you measure a variation in the value of money with respect to commodities in general between two epochs?

[T. T. 1902.]

Source: Oxford University Examination Papers, Second Public Examination, Honour School of Modern History. Trinity Term, 1902, pp. 32-34

Image Source: Convocation House, looking S.E. 1634–36. ‘Plate 56: Bodleian Library, Convocation House and Schools Quadrangle’, in An Inventory of the Historical Monuments in the City of Oxford (London, 1939), p. 56. British History Online http://www.british-history.ac.uk/rchme/oxon/plate-56  [accessed 13 May 2018].

 

 

Categories
Chicago Exam Questions Fields

Chicago. Money and banking prelim exam questions, 1969

 

In Milton Friedman’s papers at the Hoover Institution Archives are filed copies of three preliminary exams for graduate students in economics from the Winter Quarter of 1969. Recent posts featured the transcriptions of the price theory prelim and the macroeconomics prelim ( or “income, employment and price level” as was the Chicago wont to say). This post takes a walk on the monetary side, namely, with the prelim for the field of money and banking. This exam was followed in the archival folder by a handwritten table by Friedman with the points awarded for the seventeen candidates who took the exam. Out of a maximum score of 240 possible points, the top exam received 189 points.  Failing grades were for 118 points and below (four examinees). The exams have Friedman’s mostly illegible notes written on them, presumably indications of the correct answers. Perhaps some day there will be a brave soul with greater patience than I possess who will try transcribing these academic scribblings of a few years back. 

The reading list for Milton Friedman’s money course from the Winter Quarter 1970 has been posted earlier.

_________________

MONEY AND BANKING
Preliminary Examination for the Ph.D. and the A.M. Degree
Winter Quarter, 1969

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your code number and NOT your name
Name of examination
Date of examination

Results of the examination will be sent to you by letter

Answer all questions. Time: 4 hours

  1. [40] The Federal Reserve has recently altered the method of calculating required and actual reserves. Required reserves are now calculated on the basis of average deposits two weeks earlier. Actual reserves equal average cash in vault two weeks earlier plus deposits at Federal Reserve Banks the current week. (There are a few other minor technical details that can be neglected.)
    Under this new system, the adjustment mechanism of the banking system is in principle dynamically unstable (explosive) for any one week by itself.

(a) Explain why the system is dynamically unstable.
(b) What factors render the system stable in practice?
How does the new system affect:
(c) The Federal Reserve’s ability to control the money supply;
(d) The significance of excess reserves, free reserves, and borrowings.

  1. [25] “Central bankers were highly receptive to the Keynesian analysis of monetary policy because it fitted in with their own preconceptions, which were based on the real-bills doctrine.” Explain why you agree or disagree, in the process summarizing the history of the real-bills doctrine.
  1. [25] A major relationship in most income-determination models is the negative interest elasticity of investment. But during the post war period in the U.S., falling interest rates have been accompanied by declining rates of investment in plant and equipment and a rising volume of residential construction.

(a) Does that suggest that residential construction is more interest-elastic than investment in plant and equipment?
(b) How far, if at all, has the observed pattern been related to central bank policy and the structure of financial intermediaries?

  1. [40 ]

(a) Construct a model for the analysis of economic policy in a closed economy, with an exogenous money supply, an income-elastic tax system, flexible prices, and saving a constant fraction of income.
(b) For a unique equilibrium, which variables do you regard as determined by this model, and which outside the model?
(c) Distinguish between monetary and fiscal policy in terms of your model.
(d) Can monetary policy be used to maintain stable prices? Can fiscal policy? Indicate the conditions in the model necessary for only one or the other to be effective.

  1. [40] Consider the problem of explaining the response in a stationary economy to a change that leads to increased unemployment of resources, such as an unanticipated fall in the demand for goods and services. Suppose that any increases in unemployment are temporary, with dynamic properties of the system such that there will be a return to an “equilibrium” or “natural” rate of unemployment if no further unanticipated shocks occur.

(a) Explain what the “natural rate of unemployment” means.
(b) Assume that the quantity of money is constant. Sketch out an explanation of the time path of output, employment of labor, price of goods, price of labor, and interest rate.
(c) Indicate what each of the following concepts means and how, if at all, each is relevant in explaining the adjustments: search unemployment, labor as a quasi-fixed factor of production, Phillips curve, expectations.

  1. [40] The loss in real value of money during inflation has been likened to a tax. Assume that inflation is fully anticipated. How much is the tax, who bears it, and who receives the proceeds:

(a) If there are 100 percent reserves and the central bank pays no interest on reserves, with commercial banks otherwise regulated?
(b) Same as (a) except there is fractional reserve banking?
(c) If there is fractional reserve banking and the central bank pays no interest on reserves, with commercial banks forbidden to pay a nominal rate of interest deposits higher than would be paid in the absence of inflation?
(d) Same as (c) except banks are also forbidden to charge nominal interest rates on loans higher than would prevail in the absence of inflation?
(e) If there is fractional reserve banking, no interest rate regulation on commercial banks, and the central bank pays interest on reserves totaling to the interest payments earned on its assets?

  1. [30] Assume that the U.S. stops pegging the price of gold and of other currencies, and in reaction to this measure[?], the European common market countries form a currency bloc linked internally by fixed exchange rates and permit the exchange rates of the common market currencies to float relative to the dollar. Assume that all other currencies float relative to the dollar.
    Compare monetary adjustment within the two currency areas (i.e. adjustment of the fifty states of the U.S. as compared to adjustment of the six countries of the common market).

 

Source: Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source:  Milton Friedman (undated) from University of Chicago Photographic Archive, apf1-06231, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Exam Questions

Chicago. Graduate economics prelim. Theory of income, employment and price level, 1969

 

The price theory prelim for 1969 at Chicago was transcribed for the previous post. Today’s post gives us the 1969 prelim examination questions for core macroeconomics (in Chicago speak of the day: “Theory of Income, Employment and Price Level”).

The M.I.T. general macroeconomic exams for 1959-1971 were transcribed and collected into a single post.

The copy of the exam in Milton Friedman’s papers at the Hoover Institution includes (Warning: Plot-spoiler!) the answers to the True-False-Uncertain questions:    1=F; 2=F; 3=T; 5=T; 5=F; 6=T; 7=T.

_____________

CORE EXAMINATION
Theory of Income, Employment and Price Level
Winter, 1969

Preliminary Examination for the Ph.D.

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the Examination will be sent to you by letter

Answer all questions. Time: 3 hours

 

I.

  1. [20] Indicate whether each of the following statements is True (T), False (F), or Uncertain (U), and state briefly your reasons:

____1. If the capital stock is growing, then the marginal efficiency of investment is greater than the marginal product of capital.

____2. In an economy growing at a rate of 4 percent per year in which the income elasticity of demand for money is 2.0, a budget deficit of up to 8 percent of government expenditures can be financed by money creation without producing inflation.

____3. In a simple income determination model, the elasticity of income with respect to changes in the marginal propensity to consume is mpc/(1-mpc).

____4. The instability of the growth equilibrium in Harrod-Domar models can validly be attributed to the particular assumptions made about the production function.

____5. A decline in prices raises real balances for a fixed quantity of money. This is known as the real balance effect.

____6. A real balance effect is compatible with a liquidity trap.

____7. A decrease in rental rates on cars which led to no change in the total number of cars in operation would raise recorded national income.

  1. [20] Fill in the missing numbers and briefly describe how you obtained them. Neglect any effects of the corporation or personal income taxes. Assume all rates are on an annual basis.
Annual interest rate on government consols = 6.5 percent
Annual dividends as a percent of earnings = 25 percent
Dividend yield of common stock = 3 percent
Rate of return on real estate = 5 percent
Annual percentage rate of change of a price index of goods and services =  ______
Percentage rate of change in the price per share of common stock =   ______
  1. [40] Assume that in a closed economy [with flexible prices] tax revenue is proportionate to income, that the government fixes the level of its spending, and that the government finances all budget deficits by money creation. Analyze the consequences of this policy for [What is] the equilibrium level or rate of change of nominal income and show the effect of an increase in the level of government spending from an initial position of equilibrium[?] Discuss separately two cases: (a) the government fixes the nominal level of its spending; (b) the government fixes the real level of its spending.
  2. [30] “It is of no manner of consequence with regard to the domestic happiness of a state whether money be in a greater or less quantity. The good policy of the magistrate consists only in keeping it, if possible, still increasing” (David Hume, 1742). What is the verdict of two centuries of further writing on money on this proposition?
  3. [30] “Many commentators have written as if commercial banks were losing deposits to their non-banking competitors. A closer look, however, shows that this notion is misleading.
    “If a commercial bank depositor writes a check in favor of his mutual savings bank, the savings bank will either re-deposit the check in its own commercial bank account or extend mortgage credit to an individual. The individual, in turn, will either deposit the check in his bank account or turn it over to the seller of the house he is buying. And the seller will either put the check in his bank account or turn it over to his creditors who will put it in theirs….
    “The crucial point is that commercial banks compete for deposits only with other commercial banks. They cannot lose deposits to other financial institutions or financial instruments.”
    Discuss.
  4. [30] Consider the following neo-Keynesian system in which Ctis real consumption, Itis real investment, Ytis real income and Xtis real autonomous expenditures.

{{C}_{t}}-\gamma {{C}_{t-1}}=k\left( 1-\nu \right){{Y}_{t}}
{{I}_{t}}-\delta {{I}_{t-1}}=m\left( 1-\delta \right){{Y}_{t}}+{{X}_{t}}-\delta {{X}_{t-1}}
{{Y}_{t}}={{C}_{t}}+{{I}_{t}}

What are the necessary conditions for stability? If these are satisfied, can the model generate cycles?

  1. [30] Panama has no central bank but uses U. S. currency (plus some coin of its own), relabeling a dollar as a Balboa.
    Netherlands has a central bank, which issues a national currency denominated in guilders.
    The U. S. has a central bank which issues a national currency denominated in dollars.
    The U.S. and Netherlands have fixed exchange rates with other major currencies. Assume that none of the countries has any extensive exchange control.
    The monetary authorities of all three countries proclaim that they cannot control the quantity of money.
    Discuss.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source: David Hume’s toe in Edinburgh.

Categories
Chicago Exam Questions

Chicago. Graduate prelim exam questions for price theory, 1969

 

For comparison’s sake, here are the questions for the price theory prelim exam at the University of Chicago in 1964.

_________________

PRICE THEORY
Preliminary Examination for the Ph.D. and the A. M. Degree
Winter Quarter, 1969

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your code number and NOT your name
Name of examination
Date of examination

Results of the examination will be sent to you by letter

Answer all questions. Time: 3 hours

I.

  1. A recent survey found that supermarkets in low income areas charge higher average prices than supermarkets in high income areas for many identical items. This is consistent with

_____(a) price discrimination in the sale of groceries

_____(b) no price discrimination

_____(c) lack of competition in the retail grocery market

_____(d) competition in the retail grocery market.

Check those that apply.

 

On the following questions, indicate whether True (T), False (F), or Uncertain (U), with brief explanation.

  1. A firm produces output xusing inputs a1 and a2, which it purchases competitively at prices p1 and p2. Its total cost is given by

C=A{{x}^{\gamma }}p_{1}^{{{a}_{1}}}p_{2}^{{{a}_{2}}}

where A, ?, a1, a2 are constants.

_____(a) The demand for the first factor is given by

{{a}_{1}}=\frac{\partial C}{\partial {{p}_{1}}}=\frac{{{\alpha }_{1}}C}{{{p}_{1}}}

_____(b) The production process of the firm exhibits constant returns to scale.

_____(c) The above cost function corresponds to a Cobb-Douglas production function.

 

  1. Consider a price system involving four commodities, q1, q2, q3, and q4. If the goods are gross substitutes, it can be shown that the equilibrium will

_____(a) Satisfy the Hicks conditions of perfect stability, and

_____(b) Be dynamically stable.

Assume demand shifts from the first commodity to the second commodity. Again, assuming that the commodities are gross substitutes, it can then be demonstrated that:

_____(c) P1/P2falls and P3/P4remains unchanged;

_____(d) P2/P3rises and P1/P4falls;

_____(e) P3/P1rises by a smaller proportion than P2/P1.

 

_____ 4. If the consumer’s utility function is separable, then his marginal utility must be declining for all goods.

_____ 5. In a two good world, consumer indifference curves must be everywhere convex to the origin. Otherwise there is no solution to the consumer’s problem of maximizing his satisfaction subject to his budget constraint.

_____ 6. Three top executives leave company A and join company B. The price of company A’s stock falls and the price of company B’s stock rises. This proves that the executives are being exploited.

 

II.

In Ronald Coase’s celebrated article on the nature of social cost the first example concerns the externality imposed by a cattle ranch that is next to a corn farm. The cattle can wander into the corn farm and eat some of the corn. This increases cost to the corn farmer and imposes an externality on him. Construct a formal analysis of the following situation:

(i) Let there be two firms such that the output of each firm is an “input” in the production function of the other. Let the other inputs be of the same kind, say, labor and capital. Let the output prices be given and let the input prices be given. Derive the profit maximizing solution for the two firms.

(ii) Give a precise measure of the externality and show that the solution in (i) does not depend on who pays whom.

(iii) Under what conditions will the dollar amount of the externality be proportional to the output of the other firm?

 

III.

Consider an economy with two, L and K, factors of production producing goods, X and Y, under conditions of constant returns to scale. Assume that X is relatively L-intensive at all factor prices.

(a) Analyze the effect of an increase in L on the production of X and Y on the assumption that the relative price of X and Y is constant. How would the increase in L affect the share of L in the economy’s income?

(b) Analyze the effect of an increase in the relative price of X on relative and absolute factor rewards, and on the share of L in the economy’s income. Would your answer be altered if both production functions were of Cobb-Douglas type?

(c) Analyze the effect of an increase in K on the relative price of X on the assumption that neither X nor Y is inferior in the community’s consumption.

 

IV.

What effect would you expect the British devaluation of the pound from $2.80 to $2.40 to have had on the dollar price of Rolls Royce cars? Justify your conclusion, preferably by diagrams describing the position of the company, indicating explicitly any assumptions you regard as relevant. Assume that wage rates in Britain in pounds are not affected by the devaluation.

 

V.

The difference between the price of foreign crude oil and the price of domestic crude oil (landed at the same U.S. port) times the quantity of oil consumed in the U.S. is roughly $5 billion. This has been cited as an estimate of the cost to the U.S., in terms of wasted resources, of the whole set of governmental measures special to oil (oil import quotas, percentage depletion allowances, prorationing of oil, etc.). Indicate as specifically as you can the defects, if any, in this measure, and the information needed to set a dollar value on each defect.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source: Lecture Hall 1, Social Science Research Building. University of Chicago Photographic Archive, apf2-07482, Special Collections Research Center, University of Chicago Library.

Categories
Columbia Curriculum Regulations

Columbia. Economics graduate students’ memo of suggestions, 1939

 

The following memo with its cover letter was later attached as “Exhibit B” to a general statement submitted October 25, 1939 to Professor Austin P. Evans, Chairman, Committee on Instruction, Faculty of Political Science, Columbia University.

“There is appended a confidential memorandum submitted to the executive officer of the Department by a graduate student committee which contains interesting comment and suggestions. (Exhibit B).”

__________________

Cover letter for the graduate students’ memo

Columbia University
May 9, 1939

Dean R. C. McCrea,
Columbia University,
New York City.

Dear Dean McCrea:
As we agreed at luncheon with you and Professor Mills the other day, we are sending you the typed notes of student suggestions to the Department of Economics. We believe that these represent the concurrence of general student opinion, plus the thought we have given these matters.
Hoping that the notes will prove useful to you,

Sincerely yours,

WYLLIS BANKDLER
DICKSON RECK
VON DUSEN KENNEDY
FRANK PIERSON

* * *  *

Notes on some student suggestions for the operation of the Department of Economics, Columbia Graduate Faculty. 5/7/39.

The suggestions concern chiefly gaps that are felt to exist in the offering of the department. There are also a few notes on the method of conducting various types of course, and on the requirements placed on students, and on the allotment of credits.

1) History of Economic Thought. Intrinsic interest in this subject is amplified by a) Oral requirement, and b) the fact that many students feel that they will some day be called upon to teach it. Some feel that the subject is already overemphasized. In any case, there is the feeling that students should not be held responsible for so large a topic unless it is offered.
Various treatments are possible. a) A mere recital of doctrines. b) A tracing of current ideas. c) A combination with Economic History, concerned with the influence of the times on the theories, and vice versa. Treatment (c) is that followed by Professor Mitchell in his former course, and in the extremely useful Lecture Notes made from it.
Student feeling is against being held for “all the doctrines, man by man, and all the men, doctrine by doctrine”. A combination of (b) and (c) above would probably be well received.

2) Economic theory. Statements in the first paragraph under (1) above hold here. This topic is understood to include (a) Systematic presentation of current schools of thought, and (b) in particular, the structure of Neo-Classical (and derivative) Theory. The material under (b) is very well handled by Milton Friedman’s Extension course. Convenience would be served by bringing this into the Graduate Catalogue, so that it would count, without special action, for the 15 central points for Master’s candidates.
Further particular large branches include c) Socialist Theory and d) Institutionalism. Student objection to the existing offering of Socialist Theory falls under two heads. First, it is claimed that the subject matter is not covered adequately in class, that the treatment is diffuse, incomplete and wandering. Second, it is protested that the treatment is not either so fair or so sympathetic as that given, say, Neo-Classical Doctrine.
Institutionalism is handsomely handled by Dr. Dorfman. There is some feeling that the material might be expanded to cover modern Institutionalists and their work and problems more intensively.

3) Economic History. Dr. Hacker’s treatment of American Economic History is very popular, as is Professor Burn’s course in modern capitalism. A course in Modern European Economic History, from the breakdown of Feudalism, would be very well received in addition, although the Burns course could be expanded to fill this need.
There is dissatisfaction with the existing Seminar. Auspices that would concentrate more closely on the material are rather widely held to be desirable. Professor Stockder’s seminar might fill this gap were it admitted to graduate economics standing. A suggestion for procedure should this prove impossible is included under “Catalog” below.

4) Labor. This may be discussed under two heads, a) Offering for the student specializing elsewhere, and b) Specialization in Labor Economics.

a) A General Survey Course in Labor Economics under capable, sympathetic auspices will be subject to very wide demand. Students whose major interest is elsewhere seem to feel quite generally that so important a branch of economics should not be left blank in their education. A large demand will also be forthcoming from first-year students who have not previously studied labor, either at all or adequately, whether or not they intend to specialize here. Such a course is of necessity a large lecture type, and requires in its instructor the specific technique relevant.
A counter-suggestion by the Faculty is that Professor Wolman expand the subject-matter of his course. A very wide and almost unopposed sector of student feeling would prefer bringing in an outsider more cordial to the material and more tolerant of the viewpoints and questions of the members of the class.
b) A Seminar in Labor Relations for the specialist would find many applicants. Student desires as to the auspices are in agreement with the above comments. No university adequately specializes in training labor economists, and it is suggested that Columbia might consider filling this more than local gap.

5) Public Economic Policy. It is safe to say that no subject arouses wider interest among students. At present, public policy is dealt with piecemeal among the several courses, with by no means all the most important aspects being covered at all. (The most thoroughly considered section is monetary policy, both existing and proposed.) It is submitted that this is an important need which Columbia is well fitted to meet without much extra trouble.
Suggestions on this score represent the fusion of two streams of thought; a) The proposal of a joint seminar to explore specific areas of planning and policy, and to be conducted by academic experts in the various fields (Angell, Bonbright, Gayer, Orchard, Macmahon, Lynd, etc.); b) The feeling that contact with people actually engaged in forming and executing public policy would provide a realistic knowledge of problems actually faced (economically, politically, administratively, etc.), as well as valuable personal relations. The suggestion under (b) would involve the invitation to Columbia for one, several, or all meetings of the seminar such men as Berle, Ezekiel, Currie, Tugwell, Mumford, Wallace, etc. etc.
Experience with the mere importation of outside lecturers, as in an instance in the Public Law Department, seems to show that a course so built lacks continuity and depth in grappling with such problems as would be considered under (a) above.
Yet to define the benefits of (b) to the membership of a seminar of manageable size would be wasteful and otherwise undesirable. Two solutions have been advanced, which are not mutually exclusive. The first involves the holding of “public” and “private” meetings in the manner of the Banking Seminar. This could be assisted by co-operation with the Economics Club, that is, the visitors could partially be drained off into luncheon meetings. This solution suffers from several difficulties including the discontinuity of having each outsider only once. The second solution is embodied in the suggestion for Panel Seminars below.
Students would greatly like to co-operate in the organization of this seminar.

6) Agricultural Economics. While this is already a subject of inter-university specialization, a survey course is part of a rounded general offering.

7) Population. Students do not feel that this is ably handled. The suggestion has been made that Professor Goodrich’s course in Internal Migration could be expanded to cover this, and also Regionalism (see under (8) below).

8) Economic Geography. The offering in the School of Business is excellent, and needs only to be given graduate economics status. See also under (7) above and “Catalogue” below.

9) Method and Technique of Research. This includes a thousand little troublesome matters that each professor assumes that the student learns elsewhere. What are the Journals in economics and related fields? How do we keep up with current developments in economics? What are the basic sources in various branches? Where are all these things scattered in the library? How do we begin the investigation of a new topic? How doe we prepare a bibliography? And many others.
The suggestions here fall under three heads. First, it is felt that a booklet answering the above and related questions would prove extremely helpful. Second, instructors should keep this need in mind, and clarify the portions of techniques and bibliography that fall in their sphere. Third, careful bibliographies already existing for various courses, and others that may arise, could be assembled and sold at cost.

10) Panel Seminar. This refers to a method of conducting seminars that shows promise of solving the dilemma of the unwieldiness of large numbers on the one hand, and the wastes of exclusiveness on the other. The discussion is conducted by a panel, consisting of one or more instructors and visitors and a carefully selected small group of students. Where student reports are to be presented, the selection is keyed to guaranteeing excellence and pointedness. An “audience” of students interested in the topic may ask occasional questions from the floor, but does not act to lower the tone of the discussion nor to encumber its progress. The “audience” may be regularly enrolled, receiving attendance credit, or may vary with the particular meeting’s content. Large and varying “audiences” are probably too much for this structure to carry.
It is felt that this method would meet the need in several situations. It should operate to raise the quality of the reports, doing away with the boredom and consequent loss of enthusiasm and tempo that so often assails large seminars now. But at the same time, it would avoid the narrow exclusiveness that operates to keep interested students from an organized study of subjects offered only in seminars.
The seating arrangements suggested by the above description seem rather stiff and stilted and disruptive. In point of fact, they are not a necessary corollary of this division of labor. Ordinary seminar seating can be used, the only requirement being that there is a staff of students who are considered capable, intelligible and interesting, and who do the reporting.
The panel seminar method is especially suggested for the discussion of public economic policy advocated in (5) above, where it is felt that wide student interest would be aroused and should be encouraged.

11) Doctor’s Oral Examinations. Under existing conditions, orals engender a period of rather heavy strain in most students. This period is of the order of two weeks or so, and is not related to the quantity of work being done, but rather to the crisis quality of the examinations. No useful purpose is served by this strain, in fact it is generally considered a hindrance to efficiency.
The remedy seems to be a removal of some of the critical focus upon orals. This may be accomplished, with no loss of academic standards or relevant rigor, by the process of having the true examination take place informally with each of the professors involved before the formal oral is taken. The formal assembled examination then assumes the character of a more official formality, in which passing is nearly certain barring a strong reason to the contrary. This division between the investigation of proficiency and ability on the one hand, and the ceremonial opportunity to forbid the banns on the other, should not only relieve most of the strain on the candidate, but also afford the faculty a more intensive chance to satisfy itself as to the student’s competence.
There are some indications that the present situation approximates this suggestion more closely than appears on the surface. Insofar as this is true, all that is necessary is to let this true state of affairs become clear to the candidates. In any event, more could be done along these lines with benefit and relief to all concerned.

12) Training for Careers. It is important periodically to review the types of career for which students in economics at Columbia are acquiring training, and at the same time to survey the curriculum with respect to the kind of training it chiefly affords. The student body is divided in proportions unknown at present* mainly among those preparing for teaching, for research, and for government service. The curriculum is skewed in the direction of training research workers. This fundamental educational divergence is worth noting, and worth investigating in its effects upon the value of the Economics offering to the students.

*One of the questions on this year’s questionnaire will be directed to this problem.

Many of the curricular suggestions above are directed as much to the problem “what kind of work” as to the problem “research in what field”, and are worthy of reconsideration in this light.

13) Catalog. The arrangement of the catalog, and the standing given by it to various courses, can prove a powerful aid in broadening the area of endeavor for which preparation may be secured here, as well as filling many of the lesser holes mentioned above.
In regard to the standing given courses in other departments, particularly in the School of Business, the effort has been made above to mention fields in which benefit would accrue to Master’s candidates if Graduate Economics Standing were given to certain courses. Particularly does this apply to the offerings of Brissenden, Stockder, perhaps Morgan, and to the advanced courses in Economic Geography. Where this is not feasible, something can be done by way of the advisory committee, see below.
Positive encouragement rather than permission can be given to students to broaden the scope of their studies if the catalog, or if necessary a separate printed or mimeographed announcement, would list as fully as possible all courses in related fields, or isolated courses of interest, that would be profitable to economists. In this way many gaps that the Economics Department cannot hope to fill itself would be plugged, and the benefits of intra-University division of labor would be received.

14) Advisory Committee. This has proved itself useful this year, and should certainly be continued. Its mention here is in connection with the potentialities of cooperation between it and the administration and faculty.
Many of the suggestions in these notes that may prove impossible of fulfillment, particularly those which come together under “Catalog”, may be aided by the unofficial action of the advisory Committee. If the committee is in possession of information concerning related courses, for instance, then even in the absence of official action the broadening of courses of study can be advanced. In this and many similar cases, the worthwhileness of the Department to new students can be increased.

 

Source:  Columbia University Archives. Columbiana. Department of Economics Collection. Box 1 “General departmental notices, memoranda, etc. Curriculum material”, Folder “Committee on Instruction”.

Image Source:  Butler Library, 1939. Columbia’s Rare Book & Manuscript Library blog. April 19, 2018.