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Cambridge Exam Questions

Cambridge. Examinations in political economy, 1872-1873.

 

Another set of political economy exams from almost 150 years ago. Cf. the 1868-1872 examination questions from Harvard.

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19th Century Cambridge examinations in political economy
posted at Economics in the Rear-view Mirror

Cambridge University examination papers, Michaelmas term, 1871 to Easter term, 1872.

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CAMBRIDGE UNIVERSITY EXAMINATION PAPERS
MICHAELMAS TERM, 1872 TO EASTER TERM, 1873.

From the MORAL SCIENCES TRIPOS.

TUESDAY, Nov. 26, 1872. 1 to 4.
POLITICAL ECONOMY.

  1. If a person saves and hoards ten thousand sovereigns, or a thousand ten pound notes, does his action in either case tend to increase the wealth of the country? Give reasons for your answer.
    A person receives an annuity of £1000, but uses for his personal expenses only £500, saving the rest; shew either by a mathematical formula, or by a general explanation, that after a certain number of years the country will begin to be enriched by his means, but not earlier.
  2. Why does skilled labour command a higher price than unskilled? Shew that there are two causes, one necessary and permanent, the other depending on the circumstances of the society; and find the condition for the existence of the latter.
  3. Assuming that in a system of large farming, labour is more productive than in a system of small farming; shew that a country of small farms may nevertheless support both a larger total population, and also a larger manufacturing and commercial population, than the same country would support under the other system; and find the condition of either result.
    Are there any causes which might render the labourer more productive where labour in the abstract is less so? Shew however that the truth of the above proposition does not depend on this distinction.
  4. Enunciate the principle of free trade; and examine whether there are any exceptions to the generally beneficial effects of free trade on both the countries concerned, either from economical or from political causes.
  5. Shew that a landlord cannot indemnify himself for a tax upon rent by raising its amount. Can you suggest reasons why this proposition would be much less true in a rudimentary than in a highly developed state of society, even supposing the two states to be absolutely alike in respect of the security of property?
    How far is the above proposition true of the landlord of a house?
  6. Shew that every commodity permanently offered for sale has a minimum average price; and examine in what case the price will exceed this minimum, and by what it is then determined.
    Two cloth manufacturers, A and B, start each with a capital of £10,000. A, who invests £2500 of his capital in permanent machinery, sells his cloth at 8s. 6d. a yard. B‘s machinery is similar to A‘s, but turns out inferior work, and costs only £1000. If profits are 10 per cent, shew that B‘s cloth will sell for 8s. 4d. a yard.
    If the machinery, instead of being permanent, wears out in a year, shew that B‘s cloth will sell for 7s. 1d. a yard.
  7. In what case is an inconvertible paper currency detrimental to a country? what is the sign of its being detrimental? and to whom is the detriment done?
  8. Quote instances to shew, that the rate of wages has very much less influence on the cost of production than might at first sight appear.
  9. Ricardo observes that a country may import commodities which it has the means of making much cheaper at home. Shew how this is theoretically possible, without assuming ignorance or negligence on the part of the importing nation: and at the same time give reasons for the extreme rarity of the occurrence as a matter of fact.
  10. Describe the means by which the transactions of international commerce are carried on with the least possible waste in the carrying power. E. g. England produces cotton, woollen and iron goods: France, silks and wines: Russia, corn and other agricultural productions: Australia, sheep, gold, &c. How is the distribution of these several commodities over the world, and the payment for each of them brought about?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 80.

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From the MORAL SCIENCES TRIPOS.

THURSDAY, Nov. 28, 1872. 9 to 12 a.m.
POLITICAL ECONOMY.

  1. Investigate the principles that should regulate the price of a postage stamp (for internal circulation).
  2. How far is the price of a newspaper determined by the cost of its production? how far by supply and demand?
  3. “So far from the 6 per cent, rate (of discount) having caused any inconvenient pressure, it has hitherto totally failed in bringing back any of the redundant means held by the community, and which, such is the general prosperity, they prefer keeping in their desks to putting them to productive use through banking channels.”
    Point out the economical errors contained in this passage.
  4. A government taxes the manufacture of beer. People do not leave off drinking beer, the demand for it remains the same, and the manufacturers can raise the price to the full amount of the tax. The consumers save the extra price by economizing in use of provisions, but the demand for these does not fall off, as the government spends the tax in buying provisions.
    What will be the effect on prices? and what inference may be drawn as to general laws of rise and fall of price?
  5. Australia exports wool largely to England.
    Examine briefly the manner and extent in which the price of Australian wool in England would be affected by the following occurrences:

(1) Large consumption of Australian mutton in England.
(2) Cessation of the returning stream of enriched English emigrants, from Australia to England.
(3) Extensive gold-discoveries in Australia.

  1. What will be the effect, if any, on the rents of a country of either of the following occurrences?

(1) A large migration of the agricultural population to the manufacturing districts:
(2) The abolition of Protection.

  1. How soon after the first colonisation of a new and fertile country will any part of its land be rented? What will determine the amount of the highest rent paid, and how will this be affected by the progress of civilisation?
  2. Between two countries, chiefly agricultural, the exchange is at par: how will it be affected by the discovery in one of the two countries of large mines of coal and iron? Examine the reason and the limits of the effect produced.
  3. Mill says that a tax on the raw material of a manufacture “limits unnecessarily the industry of the country: a portion of the fund destined by its owners for production being diverted from its purpose.”
    In order to test the truth of this statement compare in detail the effects produced by taxing wool and cloth respectively, considering both the temporary effects produced at the time of imposition of such taxes and also their permanent effects.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 83.

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From the MORAL SCIENCES TRIPOS.

FRIDAY, Nov. 29, 1872. 1 to 4.
POLITICAL ECONOMY.

[Not more than four questions are to be attempted.]

  1. Give a history of the development of the Economic view of agricultural production from Quesnay to Ricardo. Examine especially Adam Smith’s view. Notice and explain the difference between his account of rent of land, and of mines. What does he mean by saying that “the most fertile mine determines the price;” and is there any sense in which the statement is defensible?
  2. Give briefly the different views that have been taken of the Foundation of Value. What is meant by the “amount of value” in the country? Is the phrase justifiable? Give Bastiat’s Theory of Value, examining

(1) How far it is possible to make it include all cases:
(2) How far it is useful in determining the precise value of anything.

How far is Bastiat’s criticism of Adam Smith for “attaching value to material things” well founded?

  1. Give a history of the changes which have taken place in the economic relation of the colonies to the mother-country, in so far as this is determined by law: and examine how far in any stage of a colony’s development Protection may be advantageous to (1) the mother-country, (2) the colony.
  2. Examine and compare the different theories upon which the Relief of the poor has been administered in England from the time of Elizabeth to the present. Upon what assumptions, psychological or sociological, does the mode of administration prevailing at present appear to proceed? and how far do these assumptions correspond to actual fact?
  3. Give the principal means by which the commercial system proposed to increase the quantity of gold and silver in any country. How far are any of these employed at present in European countries? How far are the grounds on which they are retained the same as those criticized by Adam Smith?
  4. State carefully how far you consider the method of Political Economy to be inductive, and how far deductive. Illustrate by considering the evidence on which Ricardo’s Theory of Rent is maintained: distinguishing between different propositions which may appear to be combined in the theory, either as it was stated by Ricardo, or as it has since been modified by others.
  5. Give an account of the restrictions upon Free-Trade in Money at present existing in England: examining how far they can be justified on the ground of

(1) Their real effects.
(2) Their supposed effects.

  1. Bastiat argues that in a state of society based on Free Contract, there is naturally a perfect harmony of economic interests among its members. Examine carefully how far this is true, independently of any monopolizing of the natural agents of production: and discuss the answers which Bastiat (and others) have made to the objections that may be drawn from the fact of such a monopoly.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 85.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
FRIDAY, Nov. 29, 1872. 9 to 12.

  1. Distinguish between Productive and Unproductive Labour, between Simple and Complex Co-operation, and between Fixed and Circulating Capital.
  2. Point out the fallacy of the argument in favour of extravagant expenditure grounded upon the supposition that it is good for trade.
  3. ‘As the population of the country increases, agricultural produce has a tendency to become more expensive.’
    Why? Shew the importance of the words printed in Italics.
  4. What is Communism? What were the distinguishing features of the scheme proposed by Fourier? Discuss its practicability.
  5. Analyse the ‘cost of labour.’
  6. Describe the systems of tenancy known as Metayer and Cottier.
  7. Determine the causes which regulate the prices of
    1. old china vases,
    2. potatoes in the London markets,
    3. cotton dresses.

Has gold a price? Has it value?

  1. A draper buys up all the manufactured silk of a pattern that happens to be fashionable in the hope that he will be able to dispose of his stock at the high price occasioned by this manoeuvre. Is this a safe investment of capital?
  2. Investigate the social and economic effects of ‘Out-door relief’.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 115.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
FRIDAY, Nov. 29, 1872. 1 to 4.

  1. What exactly is Credit?
    Compare the economic effects of the ‘credit’ which a tradesman gives to his unproductive customers, and that which he obtains from a banker.
  2. Criticize upon Adam Smith’s principles the propriety of the following taxes under our present circumstances:

(1) A fixed duty levied upon the farmer for every acre sown with wheat.
(2) A tax upon every article sold by auction, levied upon the seller.
(3) A tax upon maidservants.

  1. In what various ways has the scale of prices in different countries been affected by the operations of Governments upon money or the precious metals?
  2. Under what circumstances is international trade between any two countries profitable? Is it advantageous to the whole population of each country?
  3. State the principal provisions of the Bank Charter Act. Upon what grounds is it generally attacked?
  4. What exactly is meant by the Exchanges being unfavourable to a given country? Is such a state of things advantageous to any persons in that country?
  5. Under what circumstances does Adam Smith consider that protective import duties are advisable? Apply his arguments to the present trade of England.
  6. What has Adam Smith to say upon “the discouragement of agriculture in Ancient Europe”?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 115.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
SATURDAY, Nov. 30, 1872. 9 to 12.

  1. How do you define a tax? Are gas and water rates, and tolls on bridges, taxes?
  2. Give some account of the principal causes which make the Rate of Discount in any country fluctuate from year to year. Why do Consols fall at the mere anticipation of a war between two foreign countries?
  3. Describe some of the principal ways in which Governments have interfered with the natural price of food.
  4. Bastiat maintains that the ‘domain of what is gratuitous is continually enlarging’: explain this statement, and shew what use he makes of it.
  5. How does Bastiat define Value? According to his use of the word, would it be accurate to say that the value of meat has trebled during the last fifty years?
  6. In discussions upon Communism we frequently meet with the terms Natural and Artificial Organization of Society: what is the distinction between them?
  7. On what grounds is property in land singled out for special attack? How does Bastiat meet such attacks?
  8. Give some account of the functions of Banks in earlier times, and compare them with their present functions.
  9. What does Adam Smith understand by the Natural Progress of Opulence? How has it been interfered with?

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 116.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
MONDAY, June 2, 1873. 9 to 12.

[Fawcett’s Manual of Political Economy]

  1. Distinguish between Wealth, Capital, and Money.
  2. Illustrate the two following statements:
    1. The labour of productive labourers is not unfrequently unproductive.
    2. Labour which is unproductive may yet be very useful.

How does Fawcett propose to extend Mill’s definition of Productive Labour?

  1. Investigate the advantages and disadvantages of farming on a large and small scale.
    How far would it be possible to secure the advantages of both large and small farming by the application of the joint-stock principle?
  2. “In the absence of agricultural improvements, more land is not brought into cultivation, unless the value of agricultural produce is increased.”
    Shew the connexion of this proposition with Ricardo’s theory of Rent, and examine any objections which have been brought against that theory.
  3. “The increase of national prosperity has as yet made but little impression upon the condition of the labouring classes.” Do you think that this statement is true? If you do, how do you account for the fact, and what remedies do you consider the most likely to be effectual? If you do not, state the reasons for your opinion.
  4. What are the principal causes of the different rates of wages in different employments, and in different localities either of the same or of different countries?
  5. What are the elements of which profits are composed? In what sense is it true that “the profits of different trades have a constant tendency to become equalized”?
  6. Give a short account of the tenure known as Métayer, pointing out under what conditions it is likely to work well.
  7. What are the principal points in which the laws regulating the price of iron ore, and those regulating the price of cotton fabrics, differ? How is the price of an ancient statue determined?
  8. Give some account of the laws which regulate the value of gold.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 355.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
MONDAY, June 2, 1873. 1 to 4.

(Half the total marks for this paper will be assigned to the Essay.)

  1. State as strongly as you can the arguments for and against the appropriation of landed property by the State.
  2. What is meant by the Solidarity of Society?
    Discuss the relation between the Solidarity of Society and the social effects of the principle of Competition.
  3. Compare the views of Smith and Bastiat upon the nature of Value.
  4. “Where Malthus saw Discordance, attention to this element enables us to discover Harmony.”
    What was the nature of this ‘Discordance’?
    How is Bastiat enabled ‘to discover Harmony’?
    Compare the views of other Economists.

*  *  *  *  *  *  *  *  *  *

Write an essay on one of the following subjects:—

(a) The Mercantile System.
(b) The Navigation Laws.
(c) The Poor-law Question.
(d) The Custom of Primogeniture.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 356.

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SPECIAL EXAMINATION IN MORAL SCIENCE FOR THE ORDINARY B.A. DEGREE.

POLITICAL ECONOMY.
TUESDAY, June 3, 1873. 9 to 12.

  1. State and criticise Smith’s account of the elements that form the natural price of commodities.
  2. How does Smith divide land considered in its relation to rent? Is the division a sound one?
  3. Trace the effect of the progress of improvement upon the price of (a) silver, (b) cattle, (c) wool.
  4. Explain the nature of a promissory note, a bill of exchange, an exchequer bill.
    What circumstances make the rate of exchange unfavourable to a country?
  5. Examine Smith’s views with regard to the comparative benefit to society of the employment of capital in farming and in manufactures.
  6. Shew how credit facilitates production.
  7. Discuss the economic effects of bounties on production, and on exportation of corn.
  8. Give some account of the Methuen treaty; the motives which led to it; and its effects upon the trade of the countries concerned in it.
  9. Discuss the comparative advantages and disadvantages of direct and indirect taxation.
  10. Investigate the causes of the prosperity of new colonies.

Source:  Cambridge University Examination Papers. Michaelmas Term, 1872 to Easter Term, 1873 (Cambridge, 1873), p. 357.

Image Source: Mathematical Bridge at Queen’s College, Cambridge University (1865).

Categories
Exam Questions Harvard

Harvard. Exams for Elementary, Full, and Advanced Political Economy. 1880-81

 

This post reaches back to the early years of Harvard’s (then) department of political economy. A grand total of three courses were offered in 1880-81. The textbooks of choice were Mill’s Principles of Political Economy and Cairnes’ Leading Principles of Political Economy. Some links to the chapters/sections cited are included below.

1879-80 Harvard Exams in Political Economy

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Harvard College Courses
POLITICAL ECONOMY.

  1. The Elements of Political Economy.—Financial Legislation of the United States.—Lectures. Twice a week. Professor Dunbar and Dr. Laughlin.
    Course 1 is intended for students who desire to pursue the study for only one year.
  2. Mill’s Principles of Political Economy. —Financial Legislation of the United States. —Lectures. Three times a week. Professor Dunbar and Dr. Laughlin.
    Courses 1 and 2 cannot be taken together, nor can either be taken by any student who has taken the other.
  3. Cairnes’s Leading Principles of Political Economy. —McLeod’s Elements of Banking. —Bastiat’s Harmonies Economiques. —Lectures. Three times a week. Professor Dunbar.
    Students proposing to take course 3 must first consult the Instructor.

Source: The Harvard University Catalogue, 1880-81, pp. 82-83.

Harvard Graduate Department
POLITICAL ECONOMY.

  1. Public Finance. —Leroy-Beaulieu’s Science des Finances. Once a week. Professor Dunbar.

Source: The Harvard University Catalogue, 1880-81, pp. 192. [apparently not taught in 1880-81 according to the Annual Report of the President of Harvard College, 1880-81, p. 62.]

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Political Economy Course Enrollments
1880-1881

No. of Sec-tions Hours per week for stu-dents Hours per week for instruct-tors
Prof. Dunbar and Dr. Laughlin Political Econ. 1 Elementary Course.—Mill’s Principles of Political Economy.—Lectures 22 Total:
7 Seniors,
4 Juniors,
9 Sophomores,
2 Others.		 1 2 2
Prof. Dunbar and Dr. Laughlin Political Econ. 2 Full Course.—Mill’s Principles of Political Economy.—Lectures on Currency and the Financial Legislation of the United States 100 Total:
13 Seniors,
73 Juniors,
13 Sophomores,
1 Other.		 2 3 6
Prof. Dunbar Political Econ. 3 Advanced Course.—Cairnes’s Leading Principles of Political Economy.—Giffen’s Essays in Finance.—Lectures 12 Total:
1 Graduate,
8 Seniors,
2 Juniors,
1 Law.		 1 3 3

Source: Harvard University. Annual Report of the President of Harvard College, 1880-1881, p. 49.

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The John Stuart Mill’s Principles:
textbook of Harvard choice

Most likely edition of John Stuart Mill’s Principles of Political Economy used at Harvard was a New York reprint of the London 5th edition. It corresponds to the pages given for the mid-year exam in Political Economy 1 from 1879-80.

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Final Examinations
Mid-Year and End-Year, 1880-1881

POLITICAL ECONOMY 1.
[Mid-Year Examination, 1880-81 with references to J. S. Mill]

  1. Explain the following terms: Real Wages, Fixed Capital, Allowance System, Margin of Cultivation, Price, Demand, Medium of Exchange, Seignorage, Value of Money, and Bill of Exchange.
  2. In what way would a general demand for luxuries effect productive laborers, and the wealth of the community? ( I., ch. v, §5)
  3. State the laws which regulate the permanent and temporary values of agricultural products.
  4. How far does the law of Demand and Supply govern the value of money? ( III., ch. ii., §5.)
  5. Explain the following statement: “It is true, the absolute wages paid have no effect upon values; but neither has the absolute quantity of labor.” ( III., ch. iv., §3.)
  6. Show how Gresham’s Law is illustrated by the history of the currency in the United States between 1834-1873.
  7. What are the different forms assumed by credit? What are their relative effects on prices? ( III., chs. xi. and xii.)
  8. State the doctrine of Comparative Cost. What is the advantage of international trade to the production of a country?
  9. What determines the value of imported commodities?
  10. Describe the issue of assignats, and point out the mistakes committed.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 14-15.

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POLITICAL ECONOMY 1.
[Final, Year-End Examination, 1880-81, with references to J. S. Mill]

  1. Define Supply, Value of Money, Productive Consumption, Cost of Production, Cost of Labor, Exchange Value, Law of Production from Land, Rate of Profit, Capital, and Gresham’s Law.
  2. Explain fully whether you consider that United States bonds are capital or not. (Book I., ch. 4, §3.)
  3. (1) What is the lowest rate of profit which can permanently exist?
    (2) Why is this minimum variable? (Book II., ch. xv., §2.)
  4. (1) What connection exists between the Price of agricultural products and the amount of Rent paid?
    (2) Can rent affect the Price?
  5. Explain carefully the following:—
    “The average value of gold is made to conform to its natural value in the same manner as the values of other things are made to conform to their natural value.” (Book III., [ch. ix] §2.)
  6. State the conditions under which International Trade can permanently exist. (Book III., ch xvii.) What will be the ultimate effect of a large movement of foreign gold upon Prices, Imports, and Exports in the receiving country?
  7. How does the general rate of interest determine the selling price of stocks and land? (Book III., ch. xxiii., §5.)
  8. Point out carefully the connection of money wages with the productive power of the land cultivated by a community. (Book III., ch. xxvi. §1.)
  9. What is the general effect of the progress of society on the land-owner, the capitalist, and the laborer? (Book IV., chs. ii., iii., iv.)
  10. On whom does a tax of a fixed proportion of agricultural produce fall? (Book V., ch. iv., §3.)
  11. Describe the leading provisions of the national bank system, as they now exist, in regard to (1) the security for notes; (2) reserves; redemption of notes; (3) aggregate limit of circulation; (4) gold banks; (5) and state the important changes made since the passage of the original act. (6) Compare our system with that of the Bank of England.
  12. State the provisions of the Resumption Act, and the circumstances which made it easy to resume specie payment at the date fixed upon

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 10-11.

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POLITICAL ECONOMY 2.
[Mid-Year Examination, 1880-81, with references to J. S. Mill]

In answering the Questions, do not change their order.
In all cases give the reasons for your answer.

  1. Is an actor to be classed as a productive laborer? The inventor of a machine? A confectioner?
  2. If in a country like this a large amount of capital becomes fixed in the building of railroads, what effect will this change taken by itself have upon the laboring class, supposing the capital to be (1) domestic, or (2) borrowed wholly or in part from abroad?
  3. How do banks help forward the tendency of profits to equivalent rates in different employments?
  4. To what extent is it true that “wages (meaning money wages) vary with the price of food, rising when it rises, and falling when it falls.” [Book II., ch. xi. §2]
  5. What determines
    1. the general rate of wages in a country,
    2. the relative rates of wages in different employments?
  6. How is it shown that “rent does not really form any part of the expenses of production or of the advances of the capitalist?” [Book II., ch. xvi. §6]
  7. How are we to reconcile these two passages from Book III., ch. IV.:—
    1. “High general profits cannot any more than high general wages, be a cause of high values.” (§4.)
    2. “Every rise or fall of general profits will have an effect on values.” (§5.)
  8. What is the system upon which the small silver currency of the United States is coined and issued?
  9. What will be the effect if the circulating medium of a country is increased beyond its natural amount,
    1. when the medium is coin?
    2. when it is coin and convertible paper?
    3. when it is inconvertible paper?
  10. Why does the increase or diminution of the reserve of a bank affect its ability to lend?
  11. What is the plan of the National Banks of the United States and of the Bank of England respectively, as regards (1) the ultimate redemption, and (2) the convertibility, of their notes?
  12. Arrange the following resources and liabilities of the Bank of England in the proper form, separating the Issue and the Banking Departments:—
Notes Issued £41.5 Government Securities £14.2
Other Deposits 27.9 Reserve 9.4
Other Securities (Loans) 27.9 Public Deposits 5.6
Coin and Bullion 26.5 Rest 3.2
Government Debt, &c. 15.0 Seven-day Bills 0.3
Capital 14.5
  1. Having arranged the account, show what changes would be made in it, if the Bank increased its loans by 3 millions, and sold 1 million of government securities, and if depositors at the same time withdrew 2 millions to be sent abroad.

**If you have time, state any difficulty which you find in Ricardo’s doctrine of rent.**

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 15-16.

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POLITICAL ECONOMY 2.
[Final, Year-End Examination, 1880-81, with a link to J. S. Mill]

One question may be omitted from each of the four groups.

I.

  1. Show carefully the distinction between wages, cost of labor and cost of production.
  2. Why is it that a potential change of the supply of other commodities is enough to make their value conform to any change in their cost of production, but that in the case of gold and silver the change of supply must be actual?
  3. What is the error involved in the assumption frequently made by writers and public speakers, that the currency of a country ought to increase in like ratio with its wealth and population?
  4. What effect does the great durability of gold and silver have upon the value of money?

II.

  1. Explain the incidence of taxes laid on wages.
  2. Explain what effect, if any, will be produced on the price of corn by,
    1. a tax upon rent;
    2. a tithe;
    3. a tax of so much per acre, irrespective of value;
    4. a tax of so much per bushel.
  3. What is the meaning of the statement that “it is not a difference in the absolute cost of production, which determines the interchange [of commodities between countries], but a difference in the comparative cost.” [Book III., ch. xvii, §2.]
  4. Why does cost of production fail to determine the value of commodities brought from a foreign country? Does it also fail in the case of commodities brought from distant parts of the same country?

III.

  1. What effect is produced upon rents, profits and wages, respectively, in a country where population is stationary and capital advancing, like France?
  2. Explain the doctrine of the tendency of profits to a minimum, the cause of that tendency, and the circumstances which counteract it.

IV.

  1. Explain the changes in the amount of greenbacks outstanding, beginning at February, 1868.
  2. Describe the provisions of the national bank system, as they now exist, and compare them with those of the Bank of England, in regard to (1) the security of notes; (2) reserves; (3) redemption of notes; (4) aggregate limit of circulation; (5) gold banks.
  3. State the provisions of the Resumption Act, and the circumstances which made it easy to resume specie payment at the date fixed upon.
  4. What was the difference between the five-twenty bonds and the six per cents. of 1881 (Act of July, 1861)? Why was it good policy for the government to issue such a large proportion of the former?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 11-12.

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POLITICAL ECONOMY 3.
[Mid-Year Examination, 1880-81, with references to Cairnes, et al.]

Do not change the order of the questions.

  1. “No article is dearer than another simply in virtue of the skill bestowed upon it.” What then is the relation of skill to value? [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 76]
  2. What is the argument for the proposition that the price of corn, in the progress of society, reaches a maximum, beyond which it cannot advance?
  3. When a depreciation of currency is in progress, what will be the difference in the effect on the prices of manufactured goods, vegetable products, and animal products respectively?
  4. What is meant by saying that a nation is interested, not in having its prices high or low, but in having its gold cheap?
  5. Explain the statement that “the high scale of industrial remuneration in America, instead of being evidence of a high cost of production in that country, is distinctly evidence of a low cost of production.” [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 385]
  6. This being shown, “how is the fact to be explained, that the people of the United States are unable to compete in neutral markets in the sale of certain imported wares, with England and other European countries?” [J. E. Cairnes.Some Leading Principles of Political Economy Newly Expounded (1874), p. 386]
  7. “The laws of political economy express tendencies.” Examine this statement, and show the meaning of the word “law” as used in economic discussion.
  8. Examine the following statement of the doctrine of rent and of the deductions therefrom:—
    “Ricardo taught that cultivation begins, when land is first open to occupation and population is scarce, with the richest soils, and thence of necessity proceeds, with the growth of numbers, steadily to poorer and still poorer, until at last all proportion must cease, and famine and death relieve the overburdened earth; the end being only postponed, as assassination is said to temper despotism, by a graduated massacre, in the forms of war, pestilence and famine, which anticipate by performing the catastrophe in detail; that is, if people did not die prematurely in series adjusted to the overruling law they would have to perish at last in the lump.—Elder’s Memoir of Carey, p. 14.
  9. Examine the position taken in the following extract from an argument in disproof of the Malthusian Theory:—
    “The question of fact into which this issue resolves itself is not in what stage of population is most subsistence produced? But in what stage of population is there exhibited the greatest power of producing wealth? For the power of producing wealth in any form is the power of producing subsistence—and the consumption of wealth in any form, or of wealth producing power, is equivalent to the consumption of subsistence….Thus the power of any population to produce the necessaries of life is not to be measured by the necessaries of life actually produced, but by the expenditure of power in all modes.
    “There is no necessity for abstract reasoning. The question is one of simple fact. Does the relative power of producing wealth increase with the increase of population?”— Henry George’s Progress and Poverty, pp. 126-7.
  10. Also the following:—
    “Agricultural profits cannot fall unless recourse is had to poorer land, but such land will never be cultivated, since capitalists can never be willing to submit to a fall of profit: and the very meaning of the expression that some land is not worth cultivating, is, that it will not yield the ordinary profit to the farmer who should attempt to reclaim it. It appears then, that the rate of profit is stationary in agriculture, and, consequently, in all other trades; and that whatever rate be established in an early stage of society, it must remain the same throughout its subsequent development.”— Shadwell’s System of Political Economy, p. 165.

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Mid-year Examinations in Philosophy, Political Economy, History, Fine Arts, and Music in Harvard College (February, 1881) included in the bound volume Examination Papers, 1880-81, pp. 16-17.

__________________

POLITICAL ECONOMY 3.
[Final, Year-End Examination, 1880-81, with references to Cairnes and Giffen]

  1. What effect has the existence of “non-competing groups” on the exchange of commodities, each of which is the product of several classes of labor, as g. the exchange of a steam engine for cotton cloth?
  2. How far are prices determined by Reciprocal International Demand, Reciprocal Domestic Demand, and cost of Production respectively? Is any change to be made in Cairnes’s statement that “an alteration in the reciprocal demand of two trading nations will act upon the price, not of any commodity in particular, but of every commodity which enters into the trade?” [J. E. Cairnes. Some Leading Principles of Political Economy Newly Expounded (1874), p. 93]
  3. What inferences are to be drawn from a regularly recurring excess of exports? In what respect is it to be viewed with satisfaction, or the reverse?
  4. The destruction of our carrying trade is spoken of as causing us a serious economic loss. What is the nature of the loss?
  5. A public officer in a recent interview set forth that,—
    “The sorghum, tea and silk industries will before many years save the United States importations amounting to about two hundred million dollars;” and that, inter alia, “we can raise on American soil a tea that will compete successfully in the market of the world and that will save us an annual tribute to foreigners of twenty-two millions.”
    What effect, if any, would this be likely to have on the competition of foreign manufactures with our own?
  6. How was the payment of the French indemnity effected with so little immediate disturbance of the money market, and what connection had the payment with the financial crisis of 1873?
  7. Although “war, it is understood, makes money dear,” still Mr. Giffen (writing in 1872) says that “we are entitled to say that money has been cheap in Europe, notwithstanding the war.” Why did the war not produce the usual effect? [Robert Giffen. Essays in Finance (3rd 1882), p. 55.]
  8. What grounds are there for believing that, at the lowest point of the recent commercial depression, England, instead of “living on her capital,” as some maintained, was still accumulating?
  9. “If we observe that the commencement of the great crisis in the commerce and trade of the world coincides precisely with the demonetization of silver in North America and Germany, we shall easily perceive the connection of causes between that fact and these phenomena, and see that the mischievous results of the demonetization of silver must, from year to year, become more apparent.”
  10. What are Mr. Giffen’s views as to the possibility of an early reduction of the English national debt? What is the nature and advantage of the operation in terminable annuities sometimes undertaken for this purpose?

Source: Harvard University Archives. Harvard University, Examination papers, 1873-1915. Box 2, Papers Set for Annual Examinations in Rhetoric, Philosophy, Political Economy, History, Roman Law, Fine Arts, and Music in Harvard College (June, 1881) included in the bound volume Examination Papers, 1880-81, pp. 12-13.

Image Source: Harvard Square in 1882 from the Brookline Photograph Collection, Public Library of Brookline.

Categories
Duke Harvard M.I.T. Nebraska Virginia War and Defense Economics

United States. College and University Courses on War Economics, 1942

 

This post is limited to the economics courses reported in a survey conducted in the days and months after the attack on Pearl Harbor that provides an extensive list of “War Courses” offered at U.S. colleges and universities at the time. The post begins with a short description of the survey itself. Next, two tables provide the names of institutions, courses (with descriptions), and instructors together with enrollment statistics. The post ends with a short bibliography of books listed for some of the courses on war economics.

Most of the courses in the survey (and not included here) concern administrative matters such as the procedures governing military procurement. There is at least one course on the economics of war that had been organized at Harvard by Seymour Harris not included in this survey (68 schools did not respond).

_________________________

Not included in the survey

Harvard University. Economic Aspects of War, organized by Seymour Harris, 1940

Final Exam for Economic Aspects of War, 1940

_________________________

How the Study was was Made
[pp. 11-13]

In April, 1942, a study was issued entitled A Report on War Courses offered by Collegiate Schools of Business and Departments of Economics. In this study were presented the combined information sent in by 58 schools and departments listing 196 separate courses. The Department of Commerce in cooperation with the National Conference of State University Schools of Business had distributed these questionnaires to approximately 175 schools on December 11, 1941. The questionnaires called for information on war courses offered after September, 1939.

In May another questionnaire was sent out to approximately the same number of schools of business administration and departments of economics. This questionnaire asked the school to list those war courses which were not reported for inclusion in the April report. Replies were received from 120 schools, 89 of which reported that they were offering war courses not previously reported, and 31 of which reported that they were offering no war courses. Sixty-eight schools did not reply.

Since the questionnaire asked the schools to “include established courses such as Business Policy and Cost Accounting provided they have been reoriented to meet war needs”, the element of judgment enters in to qualify the results. Some schools reported that they had organized no new courses but had reorganized old ones to meet war needs. They felt, however, that the alteration was not great enough to warrant reporting them as war courses. Other schools reported courses which contained in their description very little of a war nature. Courses which it was felt were not primarily war courses were not included in the report. In addition, courses were excluded which it was felt did not fall clearly into the field of business administration and economics.

Any further information which is desired on any of the courses reported here can be secured by writing to the instructor of the particular course. His name appears along with the description of the course.

_________________________

War Courses Offered in Collegiate Schools of Business and Departments of Economics

Economics of War

SCHOOL

 COURSE TITLE WEEKS
OF COURSE		 HOURS
PER
WEEK		 CREDIT
HOURS		 ON
CAMPUS		 SEC-TIONS STU-
DENTS

PREREQ-UISITES*

U. of Akron, Akron, Ohio.

 Economics of War

16

 2 2 No 1 15

2C
Albright Col., Reading, Pa. Economic Problems

16

 3 3 Yes 1 18

2C

U. of Ariz., School of Bus. & Pub. Admin. Tucson, Ariz.

 Economics of War 18 3 3 Yes 1 17 2C
U. of Ariz., School of Bus. & Pub. Admin. Tucson, Ariz. Geography of War Areas 18 3 3 Yes — —

—

Babson Inst., School of Bus. Admin., Wellesley, Mass.

 War Economics 12 3 0 Yes 2 40 C
Brooklyn Col., Brooklyn, N.Y. Econ. of Defense & War 16 3 3 Yes 2 34

2C

Brown U., Dept. of Econ., Providence, R.I.

 Economics of War 30 3 6 Yes 1 45 2C
Bucknell U., Dept. of Commerce & Finance, Lewisburg, Pa. Econ. of Modern War 6 6 ½ 3 Yes 1 20

2C

Carleton Col., Dept. of Econ., Northfield, Minn.

 Economics of War 18 3 3 Yes 1 — 2C
City College of N.Y., Commerce Center, New York, N.Y. Price Control Reguls. 6 6 3 Yes 1 39

—

U. of Cincinnati, Col. of Engin. & Commerce, Cincinnati, Ohio.

 Economics of War 14 3 3 Yes 2 60 —
U. of Cincinnati, Col. of Engin. & Commerce, Cincinnati, Ohio. Probs. of War and Reconstruction 14 3 3 Yes 2 60

—

Claremont Col., Claremont, Cal.

 America at War: Econ. Org. 6 10 5 Yes — — 4
Claremont Col., Claremont, Cal. War and Economics 15 3 5 Yes — —

4

Clark U., Worcester, Mass.

 Economics of War 6 5 2 Yes 1 — 2C
Clemson Col., Clemson, S.C. Economics of War 16 3 3 Yes 1 32

2C

Dartmouth Col., Tech. School of Bus. Admin. Hanover, N.H.

 Econ. Prob. of War 13 3 3 Yes 3 100 3C
U. of Detroit, Col. Of Commerce & Fin., Detroit, Mich. Economics of War 17 3 3 Yes 1 49

2

U. of Detroit, Col. Of Commerce & Fin., Detroit, Mich.

 War Finance 6 7 3 Yes 1 — 2
Duke U., Durham, N.C. Economics of War 18 3 3 Yes 2 55

3

Fenn Col., School of Bus. Admin., Cleveland, Ohio.

 Economics of Price Control 10 2 2 Yes 1 — 2C
U. of Fla., Col. of Bus. Admin. Gainesville, Fla. Economics of Total War 3 3 3 — — —

—

Franklin & Marshall Col., Lancaster, Pa.

 Econ. History of U.S. 15 3 3 Yes 5 125 —
Franklin & Marshall Col., Lancaster, Pa. War Economics 15 3 3 Yes 4 110

C

U. of Ga., Athens, Ga.

 Advanced Econ. Theory 8 5 5 Yes 1 8 3C
U. of Ga., Athens, Ga. Economics of War 8 5 5 Yes 2 66

2C

U. of Ga., Col. of Bus. Admin., Athens, Ga.

 Econ. of Consumption 12 5 5 Yes 2 40 3C
Hamline U., St. Paul, Minn. Prins. of Economics 8 3 3 Yes 2 62

1

Harvard Grad. School of Bus. Admin., Boston, Mass.

 Banking Probs. and Federal Fin. 16 3 3 Yes — — C
James Millikin U., Decatur, Ill. Econ. of War and Reconstruction 16 3 3 No 1 24

2C

Loyola U., Dept. of Econ., New Orleans, La.

 Economics of War 16 3 3 Yes 1 25 2
Macalester Col., St. Paul, Minn. Econ Probs. of a War Economy 18 3 3 Yes — —

2C

U. of Md., Col. of Commerce, College Park, Md.

 Econ. Institutions & War 16 3 3 Yes — — 2
Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass. Economics of War 15 2 6 Yes 1 35

—

Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass.

 Postwar Econ. Probs. 15 2 6 Yes — — —
Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass. Postwar Problems 15 3 9 Yes — —

3C

U. of Minn., School of Bus. Admin., Minneapolis, Minn.

 Finance 11 3 3 Yes 1 11 3C
U. of Minn., School of Bus. Admin., Minneapolis, Minn. Our Economic Life 11 3 3 Yes 1 125

—

U. of Minn., School of Bus. Admin., Minneapolis, Minn.

 Public Finance 22 3 6 Yes 1 15 4C
Mont. State U., School of Bus. Admin., Missoula, Mont. War Economics 10 4 4 Yes 1 —

2C

N. Dak. Agri. Col., Dept. of Econ., Fargo, N.D.

 War Economics 16 3 3 Yes 1 25 2C
U. of N. Dak., School of Com., Grand Forks, N.D. Economics of War 8 5 3 Yes 1 21

2C

Okla, A&M, Col., School of Com., Stillwater, Okla.

 War and Post-War Econ. Problems 18 3 3 Yes — — 3C
U. of Pittsburgh, Pittsburgh, Pa. War Economics 18 2 2 Yes 2 65

2C

Pomona Col., Claremont, Cal.

 Econ. of War & Defense 6 5 3 Yes 1 19 2C
St. John’s U., Collegeville, Minn. Economics of War 18 3 3 Yes 1 20

2C

U. of S. Dak., School of Bus. Admin., Vermillion, S.D.

 Economics of War 18 3 3 Yes 1 25 2C
U. of S. Dak., School of Bus. Admin., Vermillion, S.D. Money & Banking & War Finance 18 3 3 Yes — —

2C

Stanford U., Dept. of Econ., Stanford U., Cal.

 American Economy in Wartime 10 5 5 Yes 2 89 2C
Stanford U., Dept. of Econ., Stanford U., Cal. War Effort 10 4 3 Yes — —

—

Stout Inst., Menomonie, Wisc.

 War Economics 6 5 5 Yes 1 — 2C
Susquehanna U., Selinsgrove, Pa. Amer. Probs. in World Relationships 32 2 2 Yes 1 27

1

Temple U., Philadelphia, Pa.

 Economic Planning 15 3 3 Yes 1 25 2C
Temple U., Philadelphia, Pa. Internat. Trade & Commerce 15 3 3 Yes 1 30

2

Transylvania Col., Econ. & Sociology Dept., Lexington, Ky.

 Economics of War 18 3 3 Yes 1 18 3C
Villanova Col., Villanova, Pa. Probs. of Peace After the War 6 5 2 Yes — —

—

U. of Va., Charlottesville, Va.

 Economics of War 36 3 6 Yes 1 — 2C
U. of Va., Charlottesville, Va. Prins. of Economics 12 3 2 Yes 2 180

1

State Col. of Wash., School of Bus. Admin., Pullman, Wash.

 Econ. & Bus. Tendencies 18 3 3 Yes 1 — 3C
U. of Wash., Col. of Econ. & Bus., Seattle, Wash. Econ. of Natl. Defense 12 5 5 Yes 1 94

2

U. of Wash., Col. of Econ. & Bus., Seattle, Wash.

 World at War 12 5 5 Yes 1 — —
Western Reserve Univ., Cleveland, Ohio. Econ. of Natl. Defense 16 4 3 Yes 1 —

2C

Western Reserve Univ., Cleveland, Ohio.

 Econ. of War and Reconstruction 15 1 ¾ 2 Yes 1 27

2 or E

*Prerequisites:

Numerals—years of college which must have been completed
C—certain courses in the same or allied subjects
E—experience in the field

_________________________

Instructors and course descriptions

SCHOOL COURSE TITLE INSTRUCTOR AND COURSE DESCRIPTION
U. of Akron, Akron, Ohio. Economics of War Jay L. O’Hara. Economic causes of war; transition from peace to war economy, fiscal and monetary problems of war economy; price control, rationing and priorities.
Albright Col., Reading, Pa. Economic Problems John C. Evans. Text supplemented by lectures, readings in economic theory for purposes of orienting the student, and current reading in the better newspapers and periodicals for correlation of current opinions.
U. of Ariz., School of Bus. & Pub. Admin. Tucson, Ariz. Economics of War E. G. Wood. An analysis of those economic factors which determine modern war; man power and materials, methods for their mobilization.
U. of Ariz., School of Bus. & Pub. Admin. Tucson, Ariz. Geography of War Areas G. Herrech. A course dealing with climatic, topographical and economic factors in war areas. Population characteristics and pertinent matters of history and government will be included, as well as a discussion of the military characteristics of the geographic background. Text material will be newspapers and magazines, and reference work in the library.
Babson Inst., School of Bus. Admin., Wellesley, Mass. War Economics James M. Matthews. Introductory analysis of economic causes of war, the economics of the war process, the post-war economic adjustment, war production, labor, wages, finance, prices, consumer control, railroads, electric power, housing, agriculture.
Brooklyn Col., Brooklyn, N.Y. Econ. of Defense & War Curwen Stoddart – The economic problems of defense in modern times; the expenditures by countries for armament and defense purposes since 1914 and the economic policies pursued in financing these expenditures. The functioning of the economy under war time controls, including the regulation of prices, production, consumption and finance, the repercussions of war upon neutral countries and the consequences of peace; with special attention to the immediate problems resulting from demobilization of war-time resources.
Brown U., Dept. of Econ., Providence, R.I. Economics of War Antonin Basch. Economic mobilization for war. Government controls over production, consumption, foreign trade, prices and wages through monetary policy, fiscal policy, price control, priorities, rationing and foreign exchange control. Economic warfare. Lessons of the first World War. Problems of post-war reconstruction.
Bucknell U., Dept. of Commerce & Finance, Lewisburg, Pa. Econ. of Modern War Rudolph Peterson. Problems created by the war in the field of production, distribution, finance, and prices and methods of meeting them.
Carleton Col., Dept. of Econ., Northfield, Minn. Economics of War D.A Brown [no course description]
U. of Cincinnati, Col. of Engin. & Commerce, Cincinnati, Ohio. Economics of War H.B. Whaling. Inflation and price controls. Fiscal and tax problems, function of the banking system in the war economy, rationing, devices for saving, conversion of peacetime to wartime economy, impact of war economic policies on post war economy.
U. of Cincinnati, Col. of Engin. & Commerce, Cincinnati, Ohio. Probs. of War and Reconstruction R.R. McGrane. How the war came to Europe. Problems of financing the war, mobilization of industrial resources, mobilization of public opinion. Problems of peace; what kind of peace does the U.S. want, what will be the position of the U.S. in the new world order?
City Col. of N.Y., Commerce Center, New York, N.Y. Price Control Regulations Henry Bund, Joseph Friedlander, Percy J. Greenberg. This laboratory and clinic course to be given by prominent authorities will provide up-to-the minute information and analysis of rulings and interpretations of orders of the Office of Price Administration. The lecturers will concern themselves with the purpose and provisions of the various regulations; individual groups of manufacturers, wholesalers and retailers will receive instruction in the computation of price ceilings for various commodities and how to obtain relief from present regulations which are oppressive; a series of laboratory exercises will be required.
Claremont Col., Claremont, Cal. America at War: Econ. Org. Arthur G. Coons [no course description]
Claremont Col., Claremont, Cal. War and Economics Walter E. Sulzbach. Emphasis on international aspects of war and economic organization.
Clark U., Worcester, Mass. Economics of War S. J. Brandenburg. A descriptive study of public economic policy in relation to war: what economic mobilization for modern war means in terms of labor, resources, civilian and military economic preparation, finance, and private and government enterprise. A study of economic problems to be faced in post war reconstruction will form a final unit of the course.
Clemson Col., Clemson, S.C. Economics of War James E. Ward. We deal with the problems of financing a war, production problems, maladjustments caused by war, post-war aspects, etc.
Dartmouth Col., Tuck School of Bus. Admin. Hanover, N.H. Econ. Prob. of War George Walter Woodworth. The chief aim of this course is to develop an understanding of how the economic resources of a nation can be most effectively marshalled for total war. First requirements are seen, then the problems of mobilization and conversion of resources. Final section is devoted to post-war problems.
U. of Detroit, Col. Of Commerce & Fin., Detroit, Mich. Economics of War Bernard F. Landuyt. An analytical survey of the economic aspects of the preparation for and conduct of war, with particular reference to the participation of the United States in World War II. Attention given to both the armed conflict and the civilian scene.
U. of Detroit, Col. Of Commerce & Fin., Detroit, Mich. War Finance Bernard F. Landuyt. A survey of the major aspects of the problem of war finance, with especial reference to the current American problem. Emphasis will be placed on the nature and significance of the problem, the principles basic to its solution, and the effectuation of these principles.
Duke U., Durham, N.C. Economics of War Earl J. Hamilton and H. E. von Beckerath [no course description]
Fenn Col., School of Bus. Admin., Cleveland, Ohio. Economics of Price Control A. O. Berger. A study of price control in normal times by (a) competition and (b) regulation under monopoly conditions, such as utilities. Price control under conditions of war: the reasons for it, the determination of ceilings, the economic implications.
U. of Fla., Col. of Bus. Admin. Gainesville, Fla. Economics of Total War Walter J. Matherly [no course description]
Franklin & Marshall Col., Lancaster, Pa. Econ. History of U.S. Harold Fischer and Noel P. Laird. A study of the factors in the economic development of the United States, with special attention to these factors as they influenced America’s rise to the rank of a world power. A history of the evolution of the economic life of the American people. Emphasis on problems involved in our adjustments to a war economy.
Franklin & Marshall Col., Lancaster, Pa. War Economics Noel P. Laird. A careful analysis of such economic problems as agriculture, consumers’ needs, price, banking, public finance, labor, transportation, and unemployment. Special attention will be given to war economy with emphasis on priorities, rationing, and government control over production, distribution, consumption, finance and other economic activities. A survey of the economic problems created by the war.
U. of Ga., Athens, Ga. Advanced Econ. Theory E. C. Griffith. The course deals with monopolistic competition and the problems of government regulation of prices; special emphasis is given to specific industries such as the iron and steel industry. Special attention will be given in 1942 to government control of inflation, rationing, and antitrust policy in a period of war.
U. of Ga., Athens, Ga. Economics of War Robert T. Segrest. Economic problems and policies of nations in wartime. Post-war problems with special emphasis on the United States.
U. of Ga., Col. of Bus. Admin., Athens, Ga. Econ. of Consumption John W. Jenkins. National economy from the interests of the consumer, before the war, now and in the post-war world.
Hamline U., St. Paul, Minn. Prins. of Economics C. B. Kuhlmann. War economics is given as the last 8 weeks of the course in principles of economics.
Harvard Grad. School of Bus. Admin., Boston, Mass. Banking Problems and Federal Finance Ebersole and D.T. Smith. Financing of the Federal Treasury during the present war is the over-shadowing concern of business, finance, and banking. Current activities of the Treasury are studied in relation to fiscal policy, and bank operations. Indispensable background is covered in two parts: bank portfolios and bank relations, with emphasis upon government relations arising out of government lending corporations, financing Federal deficits by bond issues sold to banks or to the public, and central bank and money management policies of the Treasury and Federal Reserve system.
James Millikin U., Decatur, Ill. Econ. of War and Reconstruction M. E. Robinson. An analysis of the fundamental framework of the war economy. Problems of finance, population, prices, civilian production, and procurement as affected by war. Study of our efforts to convert and produce for war in contrast to those of other nations. Brief study of the economic structure and problems of a post-war economy. Much of the course will be devoted to a study of sources, propaganda, and war annals.
Loyola U., Dept. of Econ., New Orleans, La. Economics of War John Connor. Economic factors in war: strategic materials; man power; production and consumption controls; price regulations; financing; post-war problems, etc.
Macalester Col., St. Paul, Minn. Econ Probs. of a War Economy Forrest A. Young. Modern warfare and the economic system; economic warfare; critical and strategic raw materials; maximizing production; foreign trade and shipping; labor and wage policies; housing difficulties; priorities, allocations, rationing and demand controls; direct and indirect price control and bases of price fixing; fiscal policy and war financing; problems of postwar readjustment.
U. of Md., Col. of Commerce, College Park, Md. Econ. Institutions & War G. A. Costanzo. An analysis of the Economic causes and problems of war. Industrial mobilization; theory and techniques of price control; banking and credit control; war finance; international trade and foreign exchange controls; economic sanctions and autarchy; and the problems of readjustment in a post-war economy.
Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass. Economics of War Ralph E. Freeman. A study of the economic changes resulting from the adjustment of industry to the demands of War, and the impact of these changes on business stability, standards of living and methods of social control.
Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass. Postwar Econ. Probs. Richard M. Bissell. A study of the economic difficulties that are likely to arise after the war, and of policies that may be adopted to cope with them.
Mass. Inst. of Technology, Dept. of Econ. & Soc. Sci., Cambridge, Mass. Postwar Problems Richard M. Bissell. A study of the economic problems involved in maintaining national income and employment under the conditions that are likely to prevail after the war.
U. of Minn., School of Bus. Admin., Minneapolis, Minn. Finance J. Warren Stehman. Reconstruction Finance Corporation, Commodity Credit Corporation, Federal Housing Administration Title VI, governmental financial policies to control prices, war finance and its effects upon business policy and upon investments. Probably fifty percent of the course dealt with financial material related directly to the war effort and fifty percent not so related.
U. of Minn., School of Bus. Admin., Minneapolis, Minn. Our Economic Life Helen G. Canoyer. Although the title of the course was not changed, due to an action of the advisory committee of General College, the committee did agree to a change in the emphasis of the course to war economics.
U. of Minn., School of Bus. Admin., Minneapolis, Minn. Public Finance Roy G. Blakey.  Each meeting was a discussion led by one of the members of the seminar. All were assigned certain basic readings and each was required to write a term paper or thesis on a phase of the subject selected by him in consultation with the instructor.
Mont. State U., School of Bus. Admin., Missoula, Mont. War Economics Roy J. W. Ely. The course is a study of the various factors that appear to lead to war; pre-war preparations; an analysis of war economy; and post-war adjustments.
N. Dak. Agri. Col., Dept. of Econ., Fargo, N.D. War Economics Paul E. Zerby.  Causes of war; economic means of warfare; economic problems and adjustments of post-war period; money and banking, public finance, labor, international economic policies, government and business.
U. of N. Dak., School of Com., Grand Forks, N.D. Economics of War S. Hagen. The course covers the steps by which a peace economy is transferred into a war economy. The controls instituted by the government to direct economic activity during the war period are studied and compared with peace time controls. Special attention is given to such topics as priorities, price-ceilings, war finance, labor management, lend-lease, and post-war problems.
Okla, A&M, Col., School of Com., Stillwater, Okla. War and Post-War Econ. Problems R. H. Baugh. An analysis of the impact of war on economic arrangements and processes; deals with such problems as the conversion of industry to war production, war-time labor issues, inflation, financing the war, rationing, conversion of war production to peace-time production, post-war employment, and international trade from the war.
U. of Pittsburgh, Pittsburgh, Pa. War Economics M. K. McKay. Emphasis is given to the problems emerging in the transition from peace to war. Special consideration is directed to war production, the role of the consumer and the various regulatory measures introduced by the government. Finally, post-war problems were viewed.
Pomona Col., Claremont, Cal. Econ. of War & Defense Kenneth Duncan. The economic problems and policies of a nation at war. Attention, is given to the economic forces contributing to war and to the strategy of international markets, materials, and shipping. The shift to a war economy and the war-time control over production, labor, prices, and consumer demand. War finance and inflation. Problems of demobilization and post-war economic planning.
St. John’s U., Collegeville, Minn. Economics of War Linus Schieffer. This course is designed to examine the repercussions upon the economy of the nation of a total war effort such as modern war entails. It investigates the problem of conversion of plant and resources, the dangers of inflation, the influence of strategic materials. It likewise spends some time discussing the postwar consequences of such a wholesale conversion of the national economy.
U. of S. Dak., School of Bus. Admin., Vermillion, S.D. Economics of War Claude J. Whitlow. Economic causes of war; nature of total war; man-power regulation and total war; war effort in real terms; price system under impact of war; labor problems in war time; war-time control of production and consumption; public finance and war; international relations during and after a period of war; post-war economic problems.
U. of S. Dak., School of Bus. Admin., Vermillion, S.D. Money & Banking & War Finance E. S. Sparks [no course description]
Stanford U., Dept. of Econ., Stanford U., Cal. American Economy in Wartime B. F. Haley, K. Brandt, W. S. Hopkins. War economics of raw materials, labor resources and policy in the war economy; transportation in World Wars I and II; business organization and policy; controls in the war economy, international aspects of the war effort; consumption and living standards in the war economy.
Stanford U., Dept. of Econ., Stanford U., Cal War Effort Staff. Lectures in all phases of the national war effort.
Stout Inst., Menomonie, Wisc. War Economics A. Stephen Stephan. The change from peace-time to war-time economy and the problems involved. The war and its effect on industry and consumers. Problems of war production, financing the war, price control, economic regulations and civilian morale.
Susquehanna U., Selinsgrove, Pa. Amer. Probs. in World Relationships W. A. Russ, H. A. Heath. A survey of the problems confronting the United States in her present day relationships with Europe, the Far East, and Latin America. These problems will be discussed, from the standpoint of relationships in economics, science, history and government. The second semester surveyed the economic relationships of war.
Temple U., Philadelphia, Pa. Economic Planning Russell H. Mack. Examination of the chief problems of production, pricing, and distribution arising under capitalism and planned economy. Special emphasis on the problems and techniques of war-time price control and rationing.
Temple U., Philadelphia, Pa. Internat. Trade & Commerce Grover A. J. Noetzel. The fundamental principles of international commerce. Special emphasis throughout upon the disorganizing effects of the present war upon world commerce. Proposed plans of reconstruction of post-war trade.
Transylvania Col., Econ. & Sociology Dept., Lexington, Ky. Economics of War W. Scott Hall. Background of nature and causes of war, economic factors in the causation, preparation for, and waging of war, economic effects of war. Emphasis on term paper.
Villanova Col., Villanova, Pa. Probs. of Peace After the War Edward J. McCarthy. An historical survey of the various efforts to organize states for economic and political purposes. Religious, social, economic and political problems facing nations at war are considered together with the several plans for post-war organization now being offered.
U. of Va., Charlottesville, Va. Economics of War David McC. Wright. Production for war, labor supply, price control, war finance, changes in the structure of the economy, post-war reconstruction, etc.
U. of Va., Charlottesville, Va. Prins. of Economics Tipton R. Snavely, D. Clark Hyde [no course description]
State Col. of Wash., School of Bus. Admin., Pullman, Wash. Econ. & Bus. Tendencies [No instructor named] Basic tendencies, in economic and business ideas and institutions. The effect of the war on economic change and the environment of business enterprise. The objectives and policies of government. Problems of post-war institutional adjustments.
U. of Wash., Col. of Econ. & Bus., Seattle, Wash. Econ. of Natl. Defense Harold G. Moulton and Howard H. Preston. Analysis of the problems arising from our national defense program, including organization of production, procurement of materials, financing industrial expansion, monetary issues, price control methods, labor relations, international exchange, fiscal policy of the government.
U. of Wash., Col. of Econ. & Bus., Seattle, Wash. World at War Staff. Factual information on the background of the present war, the ideological conflict; the fundamentals of military and naval strategy, economics and war, and the essentials of planning for peace.
Western Reserve Univ., Cleveland, Ohio. Econ. of Natl. Defense Russell Weisman. The problems of industrial mobilization. Priorities, allocations, and price control. Methods of financing – taxation, public borrowing, fiat money and credit. Economic policies of the leading nations in World War I and II.
Western Reserve Univ., Cleveland, Ohio. Econ. of War and Reconstruction Warren A. Roberts. An analysis of the steps involved in the conversion to war effort, and the effects upon business. An examination of the economic program of Germany and England and a comparison of policies of labor representation, of personnel conversion from normal occupations, of stages of development of war finance, and of uses of compulsory loans. A brief consideration of post-war problems.

 

_________________________

Bibliography
Texts used in War Courses Offered by Collegiate Schools of Business and Departments of Economics

ECONOMICS OF WAR

Atkins, W. E. (Editor). Economic Behavior. Houghton Mifflin Co., Boston, 1931, 1079 p., $8.50.

Backman, Jules. Wartime Price Control and the Retail Trade. National Retail Dry Goods Association, New York, 1910, 48 p., $.10.

Baruch, Bernard M. American Industry in the War. Prentice-Hall, Inc. New York, 1941498 p., $3.75.

Boulding, Kenneth Ewart. Economic Analysis. Harper and Bros., New York, 1941, 809 p., $4.25.

Brown University Economists, A. C. Neal (Editor). Introduction to War Economics. Richard D. Irwin, Inc., Chicago, 1942, $1.25.

Burnham, James. Managerial Revolution. John Day Company, Inc., New York, 1941, 285 p., $2.50.

Chamberlin, Edward. Theory of Monopolistic Competition. Harvard University Press, Cambridge, 1938, 241 p., $2.50.

Condliffe, John Bell. The Reconstruction of World Trade; A Survey of Industrial Economic Relations. W. W. Norton, Inc., New York, 1940, 427 p., $3.75.

Fairchild, F. R.; Furniss, E. S. and Buck, N. S. Economics. Macmillan Co., New York, 1940, 828 p., $3.00.

Faulkner, Harold Underwood. Economic History of the United States. Macmillan Co., New York, 1937, 319 p., $.80.

Fraser, Cecil E. and Teele, Stanley F. Industry Goes to War; Readings on American Industrial Rearmament. McGraw-Hill Book Company, New York, 1941, 123 p., $1.50.

Hardy, C. O. Wartime Control of Prices. Brookings Institution, Washington, D. C., 1940, 216 p., $1.00.

Harris, Seymour E. Economics of American Defense. W. W. Norton and Company, Inc., New York, 1941, 350 p., $3.50.

Lorwin, Louis L. Economic Consequences of Second World War. Random House, New York, 1941, 510 p., $3.00.

Meade, J. E.; and Hitch, C. J. Introduction to Economic Analysis and Policy. Oxford University Press, New York, 1938, 428 p., $2.50. Mendershausen, Horst. Economics of War. Prentice-Hall, Inc., New York, 1940, 314 p., $2.75.

Nelson, Saul and Keim, Walter G. Price Behavior and Business Policy (T.N.E.C. Monograph No. 1) U. S. Government Printing Office, Washington, D. C., 1940, 419 p., $.45.

Pigou, A. C. The Political Economy of War. MacMillan and Company, London, 1921, 251 p., $3.25.

Robbins, Lionel Charles. Economic Causes of War. Macmillan Co., New York, 1939, 124 p., $1.35.

Robinson, Joan. The Economics of Imperfect Competition. Macmillan and Co., London, 1934, 352 p., $4.50.

Spiegel, Henry William. Economics of Total War. D. Appleton-Century Co., New York, 1942, 410 p., $3.00.

Stein, Emanuel and Backman, Jules. War Economics. Farrar and Rinehart, Inc., New York, 1942, 501 p., $3.00.

Steiner, George A. and Associates. Economic Problems of War. John Wiley and Sons, Inc., New York, 1942, 676 p., $3.50.

Steiner, W. H. Economics of War. Farrar and Rinehart, Inc., New York, 1942, 250 p., $3.00.

Vaile, Roland Snow; and Canoyer, Helen G. Income and Consumption. H. Holt and Co., New York, 1938, 394 p., $2.25.

Waller, Willard Walter (Editor). War in the Twentieth Century. Random House, Inc., New York, 1940, 572 p., $3.00.

Zimmermann, Erich W. World Resources and Industries; A Functional Appraisal of the Availability of Agricultural and Industrial Resources. Harper and Bros., New York, 1934, 842 p., $4.00.

 

Source: U.S. Department of Commerce, Bureau of Foreign and Domestic Commerce. Supplementary Report on War Courses offered by Collegiate Schools of Business and Departments of Economics. Washington, D.C.: August 1942. Pages 11-13, 20-25, 45-89, 94-96.

Image Source: U.S. National Archives and Records Administration. “Buy War Bonds” (Uncle Sam). Wikimedia.

Categories
Exam Questions Harvard

Harvard. General Exams in Microeconomic and Macroeconomic Theory. Spring, 1992

 

The following general examinations for microeconomic and macroeconomic theory (Spring 1992) have been transcribed from a collection of general exams at Harvard from the 1990s provided to Economics in the Rear-view Mirror by Abigail Waggoner Wozniak (Harvard economics Ph.D., 2005). Abigail Wozniak was an associate professor of economics at Notre Dame before being appointed a senior research economist and the first director of the Federal Reserve Bank of Minneapolis’ Opportunity & Inclusive Growth Institute. Economics in the Rear-view Mirror is most grateful for her generosity in sharing this valuable material.

The “Wozniak collection” is over 90 pages long, so it will take some time for all the exams to get transcribed.

Transcriptions are also available for: 

Spring 1991. General Examinations in Microeconomic Theory and Macroeconomic Theory.

Fall 1992. Microeconomic Theory and Macroeconomic Theory.

___________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics 2010b: FINAL EXAMINATION and
GENERAL EXAMINATION IN MICROECONOMIC THEORY

Spring Term 1992

For those taking the GENERAL EXAM in microeconomic theory:

  1. You have FOUR
  2. Answer a total of FIVE questions subject to the following constraints:
    *at least ONE from part I;
    *at least TWO from Part II;
    *EXACTLY ONE from Part III.

For those taking the FINAL EXAMINATION in Economics 2010b (not the General Examination):

  1. You have THREE HOURS
  2. Answer a total of four questions subject to the following constraint:
    *DO NOT ANSWER ANY questions from Part I;
    *at least TWO from Part II;
    *at least ONE from Part III.

 

PLEASE USE A SEPARATE BLUE BOOK FOR EACH QUESTION

PLEASE PUT YOUR NAME (OR EXAM NUMBER) ON EACH BOOK

 

PART I (Questions 1 and 2)

QUESTION 1

A consumer in a three good economy (goods denoted x1, x2 and x3; prices by p1, p2, p3) with wealth level w>0 has demand functions for commodities 1 and 2 given by:

\begin{array}{l}{{x}_{1}}=100-5\,\,\frac{{{p}_{1}}}{{{p}_{3}}}+\beta \,\,\frac{{{p}_{2}}}{{{p}_{3}}}+\delta \,\,\frac{w}{{{p}_{3}}}\\{{x}_{2}}=\alpha -\beta \,\,\frac{{{p}_{1}}}{{{p}_{3}}}+\gamma \,\,\frac{{{p}_{2}}}{{{p}_{3}}}+\delta \,\,\frac{w}{{{p}_{3}}}\end{array}

Where Greek letters are non-zero constants.

i) Indicate (but don’t actually do it!) how to calculate the demand for the third good, good 3.

ii) Are the demand functions for x1 and x2 appropriately homogeneous?

iii) Calculate the numerical values of \alpha ,  \beta , \gamma . (Hint: what are the various restrictions on the consumer’s demand function and on the relationships between various demand functions? Have you made use yet of all of them?)

iv) Given your results above, draw for a fixed level of x3, the consumer’s indifference curve in the x, y plane.

v) What does your answer to (iv) imply about the form of the consumer’s utility function u(x1, x2, x3)?

 

QUESTION 2

Consider a Cournot duopoly. The inverse demand function is

p=100 – (q1 +q2)

where qi, i= 1,2, is the production of firm i (Note: if q1+q2 ≥100 then the price is zero). Marginal cost for the two firms is constant and equal to zero.

  1. Show that given the production qi≤100 of firm i the optimal reaction of firm j (j \ne i) is qj = ½ (100-qi). Use this to compute the Cournot-Nash equilibrium. Draw also the reaction function.
  2. Argue that it can never be a best response for any firm to supply more than x1=50. Argue then that if no firm will ever supply more than 50 then no firm will ever supply less than x2=25.
  3. Continue the above recursion and determine the limit of xt. Interpret in terms of the concept of rationalizability (define terms).

 

PART II (Questions 3, 4 and 5)

QUESTIONS 3

Consider the following 2 person, 2 commodity general equilibrium model. Individual 1 is risk neutral and has a utility function

u1(x,q) = x + y

Individual 2 is risk averse and has von Neumann-Morgenstern utility function

u2(x,y) = x½ + y.

Individual 1’s endowment of good y is {\bar{Y}}, he has no x. There are three states of nature and the endowment of individual 2 depends on the state. The levels of endowment of x are x1, x2 and x3. He has no y.

  1. Suppose the subjective beliefs are that each state is equally likely. Find a complete-market Arrow-Debreu equilibrium.
  2. Suppose there is a market for the delivery of x and y only uncontingently. Find the equilibrium. Is it efficient?
  3. Suppose that before any trade takes place, all individuals will be told whether or not state 1 will arise. They are not able to distinguish between states 2 and 3 at this stage. Find the equilibrium as it depends on the information disseminated.
  4. Calculate the expected utility attained in the equilibrium of part c), ex ante (i.e. before any announcement is known), using the fact that the probability that the individuals will be told that the state is 1 is 1/3, and that it is not 1 is 2/3. Under what conditions (on x1, x2 and x3) is the information socially valuable. Comment.

 

QUESTION 4

[This problem concerns a firm which is not explicitly optimizing anything. We just want to study the stability of its profitability and debt-equity structure.]

At each instant of time, the firm employs only a single factor, capital, in an amount K. Gross profits are f(K), concave and increasing in K. It has a certain level of borrowing B on which it owes rB in interest costs; r is fixed. Net profits therefore are

\pi = f(K) – rB

Some of the profit is distributed in the form of dividends, D. The rest of it is held as retained earnings R. Suppose the firm follows the “dividend policy”

\begin{array}{l}R=\alpha \pi \,\,\,\,\,\,\,\,\,\,\,\,\,\,0\le \alpha \le 1\\D=\left( 1-\alpha  \right)\pi \end{array}

The change in firm’s stock capital is equal to the sum of its level of retained earnings R and new borrowing B minus depreciation \delta K (\delta > 0)

\dot{K}=R+\dot{B}-\delta K

Its level of new borrowing responds positively to the excess of current net profits above a target level \pi *, according to

\dot{B}=\beta \left( \pi -\pi * \right)

\beta \ge 0.

In an equilibrium, K, B, \pi , R and D are all constant.

1) Assume we have an equilibrium for fixed parameters \alpha and \beta . For what values is it locally stable?

2) Equity in the firm is, by definition, K – B. Find the steady-state debt-equity ratio, in terms of the parameters and the production function.

Assuming that the equilibrium is stable,

3) What is the effect of a small increase in \pi * on the equilibrium debt-equity ratio?

 

QUESTION 5

There are n men and n women. Each man has an ordering over the set of women, and each woman has an ordering over the set of men. (indifference is not allowed)

  1. Show that in any Pareto optimal system of pairing men and (i.e. a pairing that cannot be dominated by another system), someone must get his/her first choice.
  2. Consider the following system: Each man proposes to the woman whom he most prefers. Women receiving more than one proposal accept the one they like the best. (Women receiving exactly one proposal accept it.)
    Next, all men whose proposals were rejected, propose to the woman they most prefer from among those who have not yet accepted proposals. The rules for acceptance are as above. This continues until all pairings have been completed.
    Is the result a Pareto optimum?
    Is it in the core of this game, suitably defined? (supply your own definition here).
  3. Show by example how the system could be manipulated by a man who knew the preferences of all other men and who could profess false preferences.

 

PART III (ANSWER EXACTLY 1 QUESTION) (Questions 6 and 7)

QUESTION 6

What does “competition” mean in the context of neoclassical theory? To what extent are neo-Marxian and neo-Keynesian theories compatible with the neoclassical idea of competitive markets? What alternatives to neoclassical adjustment processes characterize Marxian and Keynesian theories?

 

QUESTION 7

Paul Samuelson once urged us “(r)emember that in a perfectly competitive market it really doesn’t matter who hires whom; so have labor hire ‘capital’”. (“Wages and Interest: a Modern Dissection of Marxian Economic Models.” American Economic Review, 1957) Does it really not matter who hires whom in neoclassical theory? Is the same true in a Marxian framework? A Keynesian framework?

 

Source: Department of Economics, Harvard University. Past General Exams Spring 1991-Spring 1999, pp. 60-66. Copy provided to Economics in the Rear-view Mirror by Abigail Wozniak.

___________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics 2010d: FINAL EXAMINATION
and
GENERAL EXAMINATION IN MACRO ECONOMIC THEORY

Spring Term 1992

FINAL EXAMINATION

Instructions for all Economics Department graduate students:

The examination will last four hours.

Answer all three parts of the examination (Parts I, II and III). Within each part, be sure to answer two questions (so that, in all, you will answer six questions).

Use a separate bluebook for each question. Clearly indicate the question number and your identification number on the front of each bluebook.

Do not indicate your name on any bluebook you submit.

Instructions for all other students:

The examination will last three hours.

Answer Parts II and III only. Within each part, be sure to answer two questions (so that, in all, you will answer four questions).

Use a separate bluebook for each question. Clearly indicate the question number and your name on the front of each bluebook.

 

PART I:

  1.  Consider the following q-theory of investment:

(1) I=I\left( q \right)\,\,\,\,\,\,I\acute{\ }>0

(2) \dot{K}=I-\delta K

(3) r={\left( \dot{q}+\pi  \right)}/{q}\;

(4) \pi =\pi \left( K \right)\,\,\,\,\,\,\,\,\,\pi \acute{\ }

Where I is investment, q is Tobin’s q, K is the capital stock, \delta is the depreciation rate, r is the required rate of return, and \pi is the profit from owning one unit of capital.

  1. What is Tobin’s q?
  2. Interpret each equation.
  3. Write the model in terms of two variables and two laws of motion.
  4. What is the state (non-jumping) variable, and what is the costate (jumping) variable?
  5. Draw the phase diagram for this model, including arrows showing the dynamics, the steady state, and the stable path.
  6. Because of an increase in acid rain, the depreciation of capital (\delta ) suddenly increases. Assume the change is permanent. Compare the old and new steady states.
  7. Describe the transition between the old and the new steady states.
  8. Suppose now that (because of strong environmental policies) the increase in \delta is only temporary. Describe the effects.

 

Question 2 (Answer both Parts)

  1. (20 minutes)
    The Solow model assumes a constant gross saving rate, whereas the neoclassical growth model determines the saving rate through household optimization.

    1. Explain the forces in the neoclassical growth model that make the saving rate rise or fall as an economy develops.
    2. How does this behavior of the saving rate influence the convergence rate—that is, the per capita growth rate of a poor country relative to a rich country? (Assume here that all countries are closed and have the same underlying parameters of technology and preferences.)
  2. (20 minutes)
    “The imperfection of private credit markets implies that a cut in lump-sum taxes, financed by a budget deficit, affects the economy. In particular, in a full-employment setting,

    1. a larger deficit crowds out private investment, and
    2. a budget deficit is a “bad idea.”
      Discuss and comment.

 

PART II

Answer any two of the following three questions. Be sure to use a separate bluebook for each answer.

  1. A familiar suggestion to central banks is to conduct monetary policy by “targeting” nominal income. Distinguish (a) the argument for targeting nominal income on the ground that this is the measure of economic activity the central bank should ultimately care about affecting, from (b) the argument for targeting nominal income on the ground that doing so will best enable the central bank to affect some other aspect(s) of economic activity in an optimal way. In your analysis of argument (a), be specific about the preference that this notion of nominal income targeting implies with respect to real income and prices separately, and say whether you think these preferences are sensible (and why). In your analysis of (b), this way would lead to a better outcome than focusing monetary policy directly on those aspects of economic activity that the central bank ultimately seeks to affect.
  2. “When money, interest-bearing government debt and productive capital are imperfect substitutes in investors’ portfolios, the economy can achieve a stable growth equilibrium only if the part of the government’s primary deficit (that is, its deficit exclusive of interest payments) that it finances by issuing new debt is equal to some particular value in relation to the economy’s size, where the deficit/income ratio is uniquely determined by specific parameters describing economic behavior. If the government attempts to run a larger debt-financed primary deficit, its growing debt will crowd out private capital, which in turn will raise the real interest rate, which will cause the government’s interest payments to rise, which will make its outstanding debt grow even faster—all in an explosive way—and vice versa if the deficit/income ratio is too small.” Do you agree or disagree with this statement? Why? Be specific about the assumptions underlying your answer.
  3. Under what conditions would the government’s choice among alternative forms of interest-bearing debt, to finance a given non-monetized deficit, affect (a) the aggregate level of real economic activity, and/or (b) the composition of real economic activity, and/or (c) the price level? Why? Under what conditions would this choice affect none of (a), (b) or (c)? Be explicit about the assumptions you make in describing both sets of conditions.

 

PART III

QUESTION 6

Consider an economy with overlapping generations of identical two-period lived consumers who work in the first period of their life and consume in the second period. The utility function of a consumer representative of the generation born at time t is

{{U}_{t}}={{c}_{t+1}}-\frac{1}{2}a_{t}^{2},

Where ct+1 denotes the consumption taking place at t +1, of a consumer born at t and a her labor supply at time t. Output is produced with labor using a linear production function: one unit of labor yields one unit of output. Output is non-storable. Population is constant.

  1. Show that the competitive equilibrium of this economy is Pareto sub-optimal. Explain why.
  2. Propose two schemes to eliminate this inefficiency. Show precisely how to implement them and compare the resulting welfare levels to the welfare level achieved by the economy described in the previous question. [Restrict yourself, for simplicity, to schemes yielding constant consumption and employment over time.]
  3. What is the channel through which your two proposed schemes affect employment? How does this channel compare with the transmission mechanism of i) real business cycle models, and ii) Keynesian models?

QUESTION 7

You are asked to testify in the Senate about the advisability of phasing out the current U.S. social security scheme. Sketch the argument that you would make in favor of or against this phasing out, knowing that the Senators whom you are addressing have no tolerance for mathematics.

QUESTION 8

In a large open economy, what is the equilibrium effect on national saving and investment of a shift in desired domestic saving (originating, say, from a change in how patient domestic consumers are) or in desired domestic investment (coming, for instance, from a permanent productivity shock)? Does your answer shed any light on the debate about how well international capital markets operate?

 

Source: Department of Economics, Harvard University. Past General Exams Spring 1991-Spring 1999, pp. 67-71. Copy provided to Economics in the Rear-view Mirror by Abigail Wozniak.

 

Categories
Chicago Exam Questions

Chicago. Final exam for graduate international economics (Economics 370). Metzler, Fall 1953.

 

Lloyd Metzler’s Chicago graduate course Economics 370 covered monetary aspects of foreign trade. [ Economics 370 Reading List, 1950]. Today’s post adds the course examination of the fall quarter of 1953.

_______________________

Biographical Note

From the guide to the Lloyd A. Metzler papers at the University of Chicago archives.

Lloyd Appleton Metzler was born on April 3, 1913 in Lost Springs, Kansas. He attended the University of Kansas, where he studied economics under John Ise and earned a Bachelor’s degree in 1935 and an MBA in 1938. Metzler then entered Harvard University. He served as an instructor and tutor at Harvard and completed a Ph.D. in economics in 1942. His dissertation, “Interregional Income Generation,” earned him the Wells Prize. That same year, Metzler was the recipient of a Guggenheim fellowship.

From Harvard, Metzler went on to Washington, D.C., where worked for the Office of Strategic Services and several economic policy and planning commissions between 1943 and 1946. Metzler joined the research staff of the Board of Governors of the Federal Reserve System in 1944. In 1946 he returned to academia when he accepted a teaching position at Yale University. He soon left Yale for the University of Chicago in 1947, where he remained for the rest of his career.

Dr. Metzler survived surgery for a brain tumor in 1952, and with the help of his wife Edith, managed to continue teaching and writing for the next twenty years. He served as Editor of the Journal of Political Economy from 1966 until his retirement in 1971. Metzler made numerous contributions to business cycle literature, macro-monetary theory, tariff theory, mathematical economics, and the field of international trade. The Metzler paradox, Laursen-Metzler effect, and Metzler matrix, all bear his name. He died on October 26, 1980.

_______________________

ECONOMICS 370
Fall 1953
Examination, Dec. 18, 1953

Answer all questions.

(1) A given country has the following balance of payments:

Payments Receipts
Imports 100 Exports 500
Income Transfers (net)
…(1) Interest, Dividends, Profits 50
…(2) Unilateral Transfers 150
Capital Outflow 200 .    .
500 500

Assuming that consumption and net investment amount to $5,000, indicate three ways in which national income may be defined. What is the significance of each definition?
(Note: if the numerical example troubles you, a definition of income in terms of broad categories, without numbers, will be quite satisfactory.)

(2) Discuss graphically the relations between the balance of trade and the flow of capital. Show, in particular, the circumstances under which the capital flow would adjust itself to a rather rigid balance of trade and the circumstances in which the balance of trade would adjust itself to a rigid capital movement. (In discussing these questions, you may make any assumptions you please as to the cause of the initial disturbance.)

(3) Suppose that two countries are on a flexible-exchange standard and that the exchange standard is so efficient that the supply of foreign exchange is for practical purposes equal to demand. Suppose, further, that the state of balance is temporarily disturbed by an outflow of capital from Country I to Country II—i.e., the capital flow schedule of Country I shifts to the right. Assuming that the banks do not destroy or create any new money, show, in the new equilibrium, what happens to prices, the exchange rate, and the rate of interest in each country. (You may assume, for this purpose that with the given supply and demand schedules, the capital outflow requires a level of prices and income in Country I just half as high, relative to prices and income in Country II as before.)
Contrast the conditions of equilibrium with those in a fixed-exchange system.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder “Econ 371 Exams”.

Source Image: Posting by Margie Metzler on the Metzler Family Tree at the genealogical website, ancestry.com.

Categories
Exam Questions Harvard

Harvard. Exams for consolidated undergrad and graduate public finance. Butters and Soloway, 1955

The public finance syllabus for 1954-55 as taught by J. Keith Butters and Arnold M. Soloway has been transcribed and posted earlier. With this post we now have the January (mid-year) and May (end-year) exams for this course.

________________________

1954-1955
HARVARD UNIVERSITY
ECONOMICS 151 AND 251
Mid-Year Examination. January, 1955

Answer Question 1: recommended time one hour and fifteen minutes.

  1. Assume that within the next year or so the current business expansion continues to the point where unemployment is reduced to a very low level and inflationary price rises are beginning to be evident. Assume that this expansion is caused by an intensification of factors now present in the economy such as: (a) a high level of consumer spending; (b) large business expenditures on plant and equipment and in the construction market generally; (c) a resumption of fairly rapid inventory accumulations. Assume that the international situation remains approximately unchanged and that for the fiscal year ending June 30, 1956 the administrative budget of the federal government is expected to be approximately in balance at a level of about $65 billion.
    1. Query: Under these circumstances compare the relative effectiveness and merits as anti-inflationary fiscal measures of (a) a government surplus produced by a reduction in the level of government expenditures on real goods and services; (b) an equivalent surplus caused by an increase in tax rates; and (c) a balanced reduction in expenditures and receipts. In answering this question specify any assumptions which you care to make or need to make.
    2. Query: Under these circumstances indicate the extent to which you would prefer to rely (a) on fiscal policy techniques (such as any of the above) as compared with (b) measures of monetary policy and debt management. What are the reasons for your preferences? To the extent that you prefer to rely partly or wholly on measures of monetary policy and debt management, indicate the specific techniques which you would recommend and their presumed effects.

Answer Question 2: recommended time forty-five minutes.

  1. “The procedures by which the federal budget of the United States government is formulated and enacted tend to produce undesirable distortions in the amount and distribution of federal expenditures and receipts.” Discuss this statement. In your discussion indicate the specific features of the budgetary process which produce such distortions and the theoretical principles in terms of which the proper distribution and amount of federal expenditures and receipts should be appraised.

Answer either Question 3 or 4: recommended time one-half hour.

  1. Describe the federal old-age and survivors’ insurance program now in effect in the United States. Indicate the main trends in the historical evolution of this program since its original enactment in 1935. What gaps or defects from either an economic or an equity standpoint do you see in the program as it now exists?
  2. Discuss the main historical shifts which have taken place in the revenue and expenditure patterns of state and local units of government as compared with those of the federal government of the United States during the period 1925-1950. What problems have been created by these shifts and what courses of action are indicated as a means of overcoming these problems?

Answer Question 5: recommended time one-half hour.

  1. Under the present federal taxing process, how is the general public interest protected from overextensions of favors to special interest groups? Is the present protection sufficient? What modifications, if any, would you suggest in the present procedures? (Answer this question specifically in terms of the reading period assignment.)

 

Source: Harvard University Archives. Harvard University. Final examinations, 1853-2001 (HUC 7000.28). Bound Volume 107, Final Exams—Social Sciences—Jan. 1955, Papers Printed for Final Examinations: History, History of Religions, … , Economics, … , Naval Science, Air Science. January, 1955.

________________________

1954-1955
HARVARD UNIVERSITY
ECONOMICS 151 AND 251
Final Examination. May, 1955

Answer Question 1: recommended time one and one-half hours.

  1. “Justice in taxation and a high rate of economic growth are two frequently stated aims of government policy.” Discuss the present personal and corporate income taxes in the light of these goals. In your discussion be specific as to the relevant issues such as (for example): concepts of justice; definitions of taxable income; the problem of capital gains; etc.

Answer three of Questions 2 through 5: recommended time one-half hour for each question answered.

  1. Sales and excise taxes should not be used in our federal tax structure because they are regressive, deflationary, and price-distorting. Discuss.
  2. When economists study a particular tax they use such terms as “shifting,” “incidence,” and “effects.” Define these terms and discuss them in connection with
    1. a tax on net profits
    2. a tax on the rent of land.
  3. Describe the present method of taxing transfers, either by gift or at death. Discuss the weaknesses of the present law and possible methods of correcting them.
  4. Discuss critically the major differences between Tucker and Musgrave in their analyses of the tax burden.

 

Source: Harvard University Archives. Harvard University. Final examinations, 1853-2001 (HUC 7000.28). Bound Volume 110, Final Exams—Social Sciences—June. 1955, Papers Printed for Final Examinations: History, History of Religions, … , Economics, … , Naval Science, Air Science. June, 1955.

Image Source:  Harvard Business School, The Annual Report 1954.

Categories
Bryn Mawr Chicago Economists Gender Home Economics Illinois Radcliffe

Bryn Mawr. Economics Ph.D. Alumna. Lorinda Jane Perry, 1913.

 

This new entry in the series “Meet an economics Ph.D. alumna/us” features the 1913 Bryn Mawr Ph.D., Lorinda Jane Perry. Details about the last 25 years of her life are relatively scarce compared to the events leading up to her last academic position as an associate professor at Hunter College in New York City, i.e. up through the first half of the 1920s. She apparently left economics to go to the Law School at the University of Chicago and as of the 1940 Census was sharing a home in Chicago with four likewise single siblings (a former member of the Illinois Legislature, an attorney, a urologist in private practice and a medical doctor working in the Health Department). 

___________________

Lorinda Jane Perry
Timeline

1884. Born December 23rd in Melvin, Illinois.

1900-1904. Illinois State Normal University.

From the Index, 1904 Yearbook of I.S.N.U.

While in high school I burned with a desire to know all of the latest slang. But that fire has been quenched. Now I can’t bear such expressions as “Oh! Deah,” or “By Jinks” and others. Now I see the wrong and wish to form a society for the “Purification of the American Girl’s Language.” I have not outlined my course of action, but hope some day to sing with the poet:

“Hail to the graduating girl, who is sweeter far than some,
Who when she talks, speaks no slang and chews no chewing gum.”

Between 1904 and 1906. Lorinda Perry taught in country schools near Melvin and Monmouth, Ill.

1906-1909. A.B. in Economics and History at the University of Illinois.

1909-1910. A.M. University of Illinois. The History of the Lake Shipping Trade of Chicago. Simon Litman, thesis supervisor.

1910-11. Women’s Educational and Industrial Union Fellowship at Radcliffe.

A fellowship of $500.00 established and maintained by the Massachusetts Federation of Women’s Clubs and the Women’s Educational and Industrial Union, 1905-1909, has been continued by the Women’s Educational and Industrial Union for the year 1910-11. This fellowship is offered to a graduate student who has been recommended by the Professors of Economics in Radcliffe College. The holder of the fellowship must devote one year to research under the Department of Research of the Women’s Educational and Industrial Union with a stipend of $500, and one year to graduate courses at Radcliffe College with the usual tuition fees as stated in the Radcliffe College catalogue; or she may devote one-half time to research work at the Union and one-half time to graduate courses at the College for two years, with a stipend of $300 per year. Applications for the year 1911-12 should be made before May 1, 1911, through the Dean of Radcliffe College.
The fellowship was awarded in 1905-07 to Caroline Manning (Carleton College) A.B. 1898, (Radcliffe) A.M. 1907; in 1907-08 to Grace Faulkner Ward (Smith) A.B. 1900; in 1908-10 to Edith Gertrude Reeves (University of South Dakota) A.B. 1906, (Radcliffe) A. B. 1907, A.M. 1910; in 1910-11 to Lorinda Perry (University of Illinois) A.B. 1909, A.M. 1910.
Source: Annual Reports of the President and Treasurer of Radcliffe College 1909-10, p. 66.

1911-13. Graduate Student at Bryn Mawr College. Fellow in the Department of Research, Women’s Educational and Industrial Union.

1913. Ph.D. Bryn Mawr. Millinery as a Trade for Women. New York: Longmans, Green, and Company. Susan Myra Kingsbury and Marion Parris Smith, dissertation supervisors.

[From the Preface, written by Susan M. Kingsbury, pp. viii-iv]

“In the fall of 1910, Miss Lorinda Perry, a graduate of the University of Illinois, 1909, securing a Master’s degree in 1910, and Miss Elizabeth Riedell, a graduate of Vassar College, 1904, were awarded Fellowships in the Department of Research of the Women’s Educational and Industrial Union and selected for investigation the subject of Millinery as a Trade for Women. During the year employers and employees were interviewed, and the results secured from the former were analyzed and interpreted by Miss Perry, from the latter by Miss Riedell.

In the years 1911 to 1913, Miss Perry held a Fellowship at Bryn Mawr College and under the direction of Dr. Marion Parris Smith, Associate Professor of Economics, continued the study of the millinery trade in Philadelphia. Miss Perry’s discussion of the trade in the two cities was accepted by Bryn Mawr College in partial fulfilment for the degree of Doctor of Philosophy in May, 1913. In Philadelphia the field work was conducted by the Consumers’ League and at their expense under Miss Perry’s direct supervision. Fortunately the information on the trade in Boston was brought up to date by the courtesy of a number of Boston employers who permitted their entire pay rolls to be copied from their books by the secretaries of our Research Department. Tabulations of this data and retabulations of the earlier Boston material by our secretaries enabled Miss Perry to unify the two studies and to revise most of her earlier work and that prepared by Miss Riedell. Those sections dealing with the effect of seasons on Boston employees and on Boston workers in the trade as secured from personal interviews are therefore the combined work of the two students.

The method of attack, the range of inquiry and the extent of returns in the investigation are all presented in the introductory chapter. As this was one of the first studies of the type by the department and indeed in the country, the schedules were far from perfect resulting in an incompleteness which in later studies of the series has been avoided. It is to be regretted that the opportunity to use pay rolls came only within the last year so that detailed information as to wages was not obtained from the workers who were visited in their homes, as was done in the study of The Boot and Shoe Industry in Massachusetts as a Vocation for Women. It is also unfortunate that pay rolls could not be secured in Philadelphia.

Prepared for the purpose of affording students training in social investigation, the study must lack in finish of presentation and completeness of interpretation; but the work has been carefully supervised and supplemented by every means available to the Research Department. In order that the survey may serve as large a group as possible, the material is often presented in much greater detail and the tables arranged with much smaller class intervals than might at first appear necessary or desirable, although discussions in the text often deal with larger groupings. Indeed in many tables the facts are presented for each case, especially where subclassification has made the number considered too small for generalization. We hope that agencies interested in a study of minimum wage laws, in other regulation of working conditions by legislation, in vocational guidance and placement, in industrial education, and especially, in awakening the public conscience may each find here data which can be rearranged or grouped so as to form a basis upon which to act.”

1914-1916. Head of Department of Political and Social Sciences at Rockford College

1916. Dissertation published The Millinery in Boston and Philadelphia: A Study of Women in Industry. Binghamton,New York: Vail-Ballou.

1916-1920. Associate in Department of Household Science. University of Illinois.

DR . PERRY TO GIVE COURSE IN HOUSEHOLD ACCOUNTING

Dr . Lorinda Perry, associate in home economics, will have charge of a class in household accounting to be given under the auspices of the Home Improvement association of Champaign . The course will be open to members of the association only, but membership in the organization is open to any who wish to join. The object of the course is to teach the women how to place their homes on a business basis.

Source: Daily Illini, March 8, 1919, p. 5.

1917-1918. “Some Recent Magazine Articles on the Standard of Living,” Journal of Home Economics. Vol. 9 (December 1917), pp. 550-558. Concluding Part. Vol. 10 (January 1918), pp. 9-17.

1919. Taught in Chicago according to report in the Daily Illini, Nov. 22, 1919, p. 8.

1920. Appointed Associate Professor of Economics at Hunter College, New York City.

Ca. 1928. J.D. University of Chicago.

1926-27 Registration of Second Year Student, Lorinda Perry, Resident Autumn, Winter, Spring Quarters.
Source: University of Chicago, The Law School, 1927-28. In Announcements Vol. XXVII, no. 22 (May 10, 1927). p. 20.

1931. [Miss Lorinda Perry of Chicago] while in Melvin during the Thanksgiving season, learned that she had been successful in passing the state bar examination”. The Paxton Record (Illinois), Dec. 3, 1931, p. 10.

1940. U.S. census. Living with brothers and sisters, in Chicago Ward 5, University Ave. No occupation listed either for her or her older sister Josephine (who had twice been elected to the Legislature of Illinois from the Fifth district from 1930 to 1934).

1951. Died August 30th in Chicago, Illinois. Last residing at 6221 University Ave., Chicago.

 

Principal Source: Obituary in The Paxton Record (Illinois), September 6, 1951, p. 1.

Image Source: from the Holton/Kinney/Foster/Watson family tree posted at ancestry.com.

 

 

Categories
Chicago Cornell Economists Germany Harvard

Chicago. Economics Ph.D. alumnus, later Cornell professor, Newman Arnold Tolles, 1932

 

Tracking the careers of Ph.D. trained economists at Economics in the Rear-view Mirror has not been limited to the handful of tournament winning, prize economists of past times or even the prominent gatekeepers of orthodoxy. Our series “Meet an economics Ph.D. alumna/us” includes both those who have moved and shaken their local academic communities without leaving much of a footprint in the sands of the history of economics and those who have constituted the vast majority of economists who have survived the demands of the graduate economics programs of their times and then modestly contributed to the pool of our collective economic knowledge during the course of their professional careers.

Today’s economics Ph.D. alumnus, Newman Arnold Tolles (University of Chicago, 1932), achieved considerable professional success during his lifetime, though he is unlikely to ever be found in the syllabi of present and future histories of economics. Tolles is however worthy of nomination as one of a myriad poster-children representing mid-20th century U.S. economics. 

_______________________

Newman Arnold Tolles

Sept. 21, 1903. Born in New York City.

1923. B. Phil in economics, School of Commerce, University of Chicago.

1924. M.S.,University  of Chicago.

1925. Recent Literature on British Unemployment Insurance. Quarterly Journal of Economics. Vol. 39, No. 4 (Aug., 1925), pp. 651-662.

1926. A.M.,  Harvard.

1925-27. Study at the London School of Economics.

1929-35. Assistant Professor Mount Holyoke and part-time at Smith College in 1931-33.

1932, Autumn. Ph.D. U of Chicago (diss: Economic Aspects of Unemployment Insurance in Great Britain, 1911-31. Published Chicago: University of Chicago libraries, 1935).

1935-1945. Government service (1935-38 as economist with the Bureau of Labor Statistics, 1938-40 as assistant director and director of research in the US Dept of Labor’s new Wage-Hour Division., 1940-45 chief of the Working Conditions Branch at BLS).

(with Louis M. Solomon) Earnings in Eastern and Midwestern Airframe Plants, 1942 : Bulletin of the United States Bureau of Labor Statistics, No. 728.

(with Robert Julius Myers) Income From Wages and Salaries in the Postwar Period : Bulletin of the United States Bureau of Labor Statistics, No. 845.

Spendable Earnings of Factory Workers, 1941-43 : Bulletin of the United States Bureau of Labor Statistics, No. 769.

(with Louis M. Solomon) Wage Rates in the California Airframe Industry, 1941 : Bulletin of the United States Bureau of Labor Statistics, No. 704.

(with Theodor Winter Reedy) Wage Stabilization in California Airframe Industry, 1943 : Bulletin of the United States Bureau of Labor Statistics, No. 746.

1945-47. Professor and chairman of the graduate department of economics, American University.

1947. appointed Professor at Cornell’s newly-established New York State School of Industrial and Labor Relations to retirement July 1969.

1951. (with Earl Brooks and Richard F. Dean) Providing Facts and Figures for Collective Bargaining—The Controller’s Role. Ithaca: New York State School of Industrial and Labor Relations, Cornell University.

1952. (with Robert L. Raimon) Sources of Wage Information: Employer Associations. Ithaca: Cornell Studies in Industrial and Labor Relations, no. 3.

1953-54. Fulbright guest professorship in Munich and Kiel.

1957. New York State Department of Labor. Chairman of the minimum wage board for the cleaning and dyeing industry.

1959. American Minimum Wage Laws: Their Purposes and Results. Ithaca: New York State School of Industrial and Labor Relations at Cornell University, no. 95.

1960. The Purposes and Results of U.S. Minimum Wage Laws. Monthly Labor Review, Vol. 83, No. 3 (March 1960), pp. 238-242.

1961. (assisted by Betti C. Goldwasser) Labor Costs and International Trade (Washington, D.C.: Committee for a National Trade Policy).

1964. Origins of Modern Wage Theories (Englewood Cliffs, NJ: Prentice-Hall).

1965 study of salaries of professional economists for the American Economic Association [published AER Vol. 58, No. 5, Dec. 1968, Supplement, Part 2. Studies of the Structure of Economists’ Salaries and Income.]

1966. Weathering Layoffs in a Small Community: Case Studies of Displaced Pottery and Carpet-Mill Workers. Washington, D.C.: Bulletin of the Bureau of Labor Statistics, 1516.

1965-1969. Two terms as Ithaca city alderman as a Democrat.

1969. Lost race for mayor of Ithaca.

Two years after retirement part-time teaching at Cornell also teaching at State University College at Geneseo (economics department).

July 1971. Becomes emeritus professor at Cornell.

Apr. 10, 1973. Died from a heart attack while teaching his class at Geneseo State Teachers College.

Sources:

Cornell University Faculty Memorial Statement by Robert H. Ferguson, Vernon H. Jensen, Robert L. Aronson.

“Arnold Tolles Dead; Served County, City with ‘Compassion’”, The Ithaca Journal, April 11, 1973, p. 3.

Guide to the N. Arnold Tolles Papers. Kheel Center for Labor-Management Documentation and Archives, Cornell University Library

Image Source: From Tolles’ obituary printed in The Ithaca Journal, April 11, 1973, p. 3.

_______________________

All the World’s a Stage
Tolles @ Center Stage

Photograph of a scene from the 1932 faculty show. Verso reads: A Scene from Faculty Show, presented once every four years at Mount Holyoke College by members of the Administration and Faculty. They present ‘A Hard Struggle’ by Westland Marston, Esq., as a curtainraisser. Left to right: Miss Ruth Douglass of the department of Music, Leslie Burgeivin of the department of English Literature, Miss Dorothy Graves of the department of Art; N. Arnold Tolles of the department of economics; Miss Elizabeth Doane of the department of French; and Bernard Bloch of the department of English.

Source:  https://compass.fivecolleges.edu/object/mtholyoke:24371

 

 

 

 

Categories
Exam Questions M.I.T.

M.I.T. General Examinations in International Economics. Feb/May 1966

 

The following general exams for the field of international economics in 1966 at M.I.T. cover mainly topics related to international payments and finance as opposed to pure trade theory and commercial policy. 

The general exams in international economics from 1959 have been posted earlier.

_________________________

General Examination in International Economics
February 9, 1966

  1. Make the case for or against economic integration, as you define it, in Europe, in a particular corner of the world, or more widely.
  2. Working Party 3 of the Organization for Economic Cooperation and Development has been assigned the topic of balance-of-payments adjustment policy. Write a sketch of the line it should take, in your estimation, regarding speed of adjustment, approved mechanisms, responsibilities of surplus countries, etc.
  3. In the wide ranging controversy about the adequacy of international monetary reserves, where do you inscribe yourself, and why?
  4. Discuss the theory of international trade in terms of the empirical support which various theories have been able to muster. Does one theory survive this testing better than others?
  5. Explain why, if it be true, that foreign trade was an effective engine of economic growth in the 19th century, but is not in the 20th.

_________________________

International Economics General Exam
May 1966

Write three essays, of one hour each, on Topic 1, and one each out of Groups 2 and 3 (but excluding the combination of #3 (United States) and #5).

Group 1

  1. The Relevance of the Theory of Comparative Advantage to Problems of Development in Less Developed Countries Today

Group 2

  1. The Role of Technological Change in Balance-of-Payments Disequilibrium
  2. Specific Policy Recommendations (with appropriate analysis) for the Balance-of-Payments Problem of the United Kingdom, the United States, or a developing country such as India

Group 3

  1. The Costs and Benefits of Well-Functioning International Capital Markets
  2. International Monetary Arrangements Today

 

Source: Institute Archives and Special Collections, MIT Libraries. Charles Kindleberger Papers, Box 22, Folder “Examinations International Economics 1959-75”.

Image Source: Boston Public Library, Tichnor Brothers Postcard Collection. Massachusetts Institute of Technology, Cambridge, Mass. Tichnor Bros. Inc., Boston, Mass., 1930.

Categories
Economics Programs Harvard

Harvard. Galbraith’s Proposal to Split the Economics Department, 1973

 

During the early 1970s the Harvard economics department went through an identity crisis in which the orthodox mainstream was challenged by a not-so-silent minority of proto-heterodox economists and a dissatisfied graduate student body. The following three artifacts from the discussion of that time come from John Kenneth Galbraith’s papers. I would not exclude the possibility that some/much of the December 26, 1972 memo from the dean of the faculty of arts and sciences was inspired, if not directly penned, by Galbraith.

Galbraith was incapable of writing even an intrauniversity memo without flashes of wit as both the draft and final versions of his memo clearly demonstrate. And yet, there remains an overwhelming pathetic, quixotic note to his proposal of dividing the economics department in order to save its diverse, social elements.

____________________________

When the Dean Asks
How to Fix the Harvard Economics Department

December 26, 1972

From: THE DEAN OF THE FACULTY OF ARTS AND SCIENCES

To: THE CHAIRMAN OF THE DEPARTMENT OF ECONOMICS

Re: TERMS OF REFERENCE FOR A STUDY OF AND RECOMMENDATIONS ON THE DEPARTMENT OF ECONOMICS

Recent developments and discussions suggest problems of some concern in the Department of Economics. In the belief that such problems, if attacked in timely fashion and a spirit of goodwill, will be more readily resolved than if allowed to persist and be aggravated, I am proposing action which I trust will meet with the approval of all concerned. I shall first identify those matters on which, I believe, there will be general agreement and then suggest terms of reference for the appropriate action.

  1. The Department of Economics has become very large. In the current catalogue I count 25 tenured members, 56 non-tenured members, 5 visiting professors and 13 economists in associated departments principally the Kennedy School, in addition to the large force of teaching assistants. It is not surprising that so large a body should have problems in maintaining a sense of common purpose and identity.
  2. There has of late been a deep difference of view on appointments in the Department. This has led to the suggestions that the Department, its size notwithstanding, is not emphasizing an adequate representation of diverse, socially unpopular or methodologically different positions, and that standards for promotion operate to exclude or minimize the representation of such views.
  3. There will be agreement that a majority may be less urgently seized of the need for representation of a minority view than the minority.
  4. In recent years there has been dissatisfaction among students, principally graduate students, with instruction in the Department. Again I state the fact without passing on the merits of the position. I do note that, historically, students have found satisfaction and pride in their association with the Department.
  5. The question has been raised whether some appointments are being appraised in accordance with contribution or non-contribution to or effect on corporate profit-making which, however useful and legitimate, is external to the scientific work and teaching of the Department.

In light of the foregoing I propose to ask the three past presidents of the American Economic Association together with the two American Nobel Prize winners who are engaged in active teaching (one of whom is also current President of the American Economic Association), together with the Chairman of the Department of Economics to examine the Department as a matter of urgency and to report. The following are the terms of reference for this examination:

  1. The group shall be denoted the Special Study Committee, and hereafter as the Committee.
  2. In its deliberations the Committee will consult to the fullest extent with students of the Department as well as with tenured and non-tenured members of the Department, and will discuss its provisional findings with students and faculty.
  3. The Committee will consider and report on whether the present personnel of the Department reflects an appropriately broad spectrum of method and view and, as necessary, on corrective steps. Corrective steps may specifically include recommendations for change in past action.
  4. The committee will consider whether the present teaching of economics is sufficiently broad, and specifically whether there should be a second and alternative track to a doctorate in economics embracing both course work and examinations and in which the primary emphasis would be on history of economic thought, institutional economics and socialist thought, or subject matter disciplines not required by the present framework.
  5. The Committee shall consider possible division or subdivision or other reorganization of the Department to provide greater knowledge of candidates for appointment or promotion, greater corporate responsibility for instruction and other possible gains from smaller size. In this connection special attention should be given to the relationship with the Kennedy School of Government.
  6. The effect of external corporate or other activities of Departmental members as these may bear on appointments, teaching or research, shall be examined with recommendations.
  7. The report of the Committee shall be made public and, in the absence of specific and fully-supported objection, it is my hope that its conclusions will be found acceptable to the Department. There is no intention to alter the constitutional arrangements by which tenured members, as now or in a suitably reorganized or subdivided Department, if that is the decision, are responsible for appointments and instruction.

____________________________

Galbraith Draft Statement (undated)
[handwritten additions in bold italics]

Draft #2

MEMORANDUM

MEMO:

The President
The Dean of the Faculty of Arts and Sciences
Members of the Department of Economics

From: John Kenneth Galbraith

 

In these last weeks tensions long present in the Department of Economics at Harvard have come to the surface. The consequences are attracting interest and discussion well beyond the confines of the Department and the University. It is doubtful if anyone, and certainly any active participants, can state the issues with complete impartiality but some of the basic circumstances admit of agreement. They are.

(1) The Department has become very large—the current catalogue lists twenty-five regularly tenured professors, thirty-five nontenured professors, thirteen members in an adjunct relationship from other parts of the University and five visiting professors. In addition there are a large number of teaching assistants. The Department has become a parliamentary and not a corporate body. Long before the recent explosion I expressed my concern not only to my colleagues but also to the top management over our increasingly ungainly and ineffective mass and its dangers. I encountered little or no disagreement.

(2) The Department has for some years been deeply divided in its views. There has been an ineffective and mostly unchanging minority, and an effective and largely unchanging majority.

(3) While the basis of the division is diverse, including the polemical folk-tendencies of academic life, our learned delight in self assertion, our sensitivity to the intellectual shortcomings of others, differences in reaction to change, political attitudes, it is also a difference in the view of economics. I doubt that any statement of this difference can avoid prejudice. I shall content myself with being dull. It partly involves the acceptance or rejection of the established economic institutions; partly acceptance or rejection of accustomed preconceptions of economic thought, partly the trade-off between precision in established modalities and lesser precision in more innovative, critical or experimental work; partly it has to do with the degree of commitment to measurement and mathematics.

(4) While the underlying fact is a difference in the view of the subject (including the importance of representing the minority views) the argument over appointments invokes competence. Each side with no slight sense of moral righteousness defines competence in its own image. What is unscientific or soft to one side is irrelevant or unreal or unuseful to the other. Certainty in these positions is enhanced by the effect of professional esteem on ego. The members of the majority rightly reflect on the high regard in which precision and excellence of their work is held in their particular spheres of econometric, mathematical or applied work. The members of the minority rejoice similarly on their standing in the profession generally. Given these attitudes, the likelihood that one side will yield gracefully to the other is (if possible) even further reduced. Thus the absolute certainty of continued conflict.

(5) The difference comes to a head over appointments. This reflects a clear view of the reality. It is recognized by all that it is people who determine what is taught and investigated—and wholly so in such an unstructured environment as Harvard. The majority, not unnaturally, has prevailed. In this context a minority should not be expected to acquiesce. To do so is to accept eventual extinction. No one who is serious about his views or methods should countenance that.

(6) The students, once pridefully associated with the Department, are discontented. Their affiliation is largely, although by no means completely, with the minority. As a consequence some members of the majority hold or harbor the thought that the minority is acting less out of conviction than a desire to seek popularity or appease student opinion. Members of the minority react with a strong (and in my own case previously undisclosed) concern for the quality of our institution.

(7) There is a question as to the bearing of subjective judgments formed in connection with the business activities of members—or in consequence of those activities—on promotion of those whose disposition or work leads to criticism of cherished and remunerative economic institutions.

Aggravated problems sometimes allow of simple choices. This is so in the present case. One course is to continue as now, and enjoy the acrimony and continue to invite, by our public bickering, disesteem for the subject, the Department, the University, our students and ourselves. The other is to move to the obvious and forthright resolution, on which will be to the benefit of all concerned.

The solution is to divide the present vast Department into two parts. One part, a Department or Division of General Economics*, would reflect the specialized interests and scientific purpose of the majority, including those whose identification with the minority has been based not on identity of professional interest but concern for academic diversity. A second part would be the Department of Social Economics. This initially much smaller Department would consist of those tenured and untenured members whose active identification with the social issues of planning, economic structure, criticism, or socialism or institutionalism leads them to make the transfer. The new Department, born out of a need to ensure diversity, would itself be under the normal academic obligation to perpetuate diversity. It would develop an undergraduate and graduate curriculum and degree requirements compromising nothing in depth and rigor, in accordance with the interests of its members and of students. Subject to established ad hoc procedures—and its resources—it would make its own promotions and appointments.

*No difficulty should be made over a name. The parent Department could be called the Department of Economics.

The initial resources of the new Department would consist of the present financial commitment to those making the change. There would, some minor administrative costs apart, be no added burden on the University budget. I would make the transfer and make the revenues from the Paul M. Warburg Professorship, including the supporting research revenues (on neither of which I have drawn in net amount in recent years) available for a new professorial appointment. I believe, not without knowledge, that money for one or two added professorships as well as for research could be raised from sources not presently open either to the University or the Department. Scholarship funds would be divided in accordance with student demand. I am willing to commit a good share of personal time in the next year to money raising, a task in which, unlike my economics, my competence has been sufficiently established.

May I note in summary the advantages of the foregoing proposal.

(1) The basic cause of distress and conflict in the present Department of Economics would be removed. Each of the new Departments or Divisions will be in a position to develop the subject in full accordance with its own lights. Neither will be in the academically repellant position (however agreeable in practice) of imposing its standards or preferences on the other.

(2) The problem of excessive scale and consequent diminution in sense of communal responsibility for teaching, research and appointments is solved in the case of the new small Department or Division. It is alleviated for the larger parent Department.

(3) The Department of Social Economics if it is to attract, retain and place its graduate students, will have to demonstrate itself in competition with its older and more prestigious parent. This competition will be exceedinglyhealthy for both. This is an appealing point. While businessmen favor competition more often in principle than in practice, this is not an error into which any good economist will allow himself to fall.

(4) Undergraduate instruction in the new Department will benefit no alone from the members’ commitment to their subject matter but also from the greater sense of community as between teaching assistants, tenured and non-tenured faculty in a much smaller department and the present Department will be better. In the present Department not even all tenured and untenured members are known to each other. Teaching assistants are known only to a fraction of the faculty members and even less is known about their performance. And again in undergraduate teaching the vigorous competition of the new Department will be good for the older one.

(5) Problems associated with the corporate business activities of professors will be at least partly resolved. No question of concern for attitudes of business clients, however subjective, will be thought to influence those who are passing on appointments in the new Department. Subject no doubt, to appropriate safeguards the activities of present members of the Department with their potential for useful employment, income and information could perhapsremain.

(6) The two Departments through a coordinating committee might [illegible word] combine for the time being on the elementary course.

(7) The creation of the new Department with an admixture of old and new members intent on developing both old and new lines of inquiry will affirm, as nothing else, Harvard’s avidly proclaimed commitment to free inquiry by people of the highest calibre and to whatever result.

(8) Nothing is forever. If, after say ten years, there is demand for reunification, why not.

With so much to be gained—and also so much trouble to be avoided—I hope that we can proceed to consider this solution with a minimum of delay. Needless to say—perhaps on the basis of past departmental performance it is very necessary that I say—I am ready at any notice to lend a hand.

____________________________

Memo On Splitting the Harvard Economics Department
[Apparent Final Draft]

June 18, 1973

From:  JOHN KENNETH GALBRAITH

To:

PRESIDENT DEREK C. BOK
DEAN-DESIGNATE HENRY ROSOVSKY
PROFESSOR JAMES S. DUESENBERRY
MEMBERS OF THE DEPARTMENT OF ECONOMICS

Re: THE DEPARTMENT OF ECONOMICS

The Department of Economics is, I would judge, entering into a period of considerable calm and tranquility. The older dissidents and heretics in the Department will, with one or two exceptions, soon be retiring. And, in any case, they are now a harmless minority. Within a year or so the younger generation of dissidents will be safely gone. Thus the expectation of a period of scholarly calm.

My purpose in this memorandum is to suggest that the prospect is not as happy as these developments imply. And it is to suggest some steps which, without unduly disturbing the equanimity of the situation, the Department and the Administration would be wise to consider. May I note that these are matters on which I have no personal, as distinct from general, professional concern. I am one of those who will be contributing, however modestly, to a more seemly, tranquil and comfortable life by a comparatively early departure.

The problems remaining after the prospective changes are two. There is first the fact that, while faculty affairs have been generally arranged to the satisfaction of all, the students remain deeply dissatisfied. Let no one doubt this or seek, by the usual academic rationalizations, to explain it away. I was much exposed to this in the special seminar last autumn; I determined then to inform myself in a minor way during the spring, which I have done. The students, over a wide political spectrum, deeply dislike their work and the Department. This is especially true of the first-year students who, in a puzzling exercise in public relations reflecting an odd attitude toward education, are now blithely told at the outset to expect the worst year of their lives. Those who have been here two or three years also look back with discontent on their educational experience. My first year of graduate work was one of the most vital and interesting of my life. So, I believe it was with most of my generation.

The complaint of the students is straitforward. They are squeezed, especially in their first year but increasingly as a test in later work, into a narrow model-building, problem-solving, quasi-mathematical routine that they find boring and unrelated to the world in which they live. The emasculated careerist may accept the routine and do well. The student who thought that economics was a window on the problems of the world is abjectly disappointed.

These student reactions are heavily discounted by most although not all of the senior faculty. The rationalization is that such student attitudes are inevitable—that the modern student is inherently lazy, feckless, radical and dissatisfied. It is even suggested, not without scholarly vigor, that those who express concern about students are courting a student popularity in a sadly unscholarly tradition. As I say, this rationalization seems to me unwise and something that very soon will have a more practical consequence. A bad reputation in these matters is not easily kept a secret. It could happen that eventually the Department will have very few graduate students of indigenous origin of any consequence, a few committed careerists, mathematicians and model-builders apart. Numbers and quality of applicants will decline. In consequence, the ratio of faculty to active, teachable graduate students, which is now approaching one to one, will pass that point and will widen as a ratio of students to teachers. This is not hyperbole. A course was recently described to me by a graduate student in which he was the only participant along with three faculty members. We have a fair number of seminars with only a handful of students, sometimes but one. Faculty life will continue in comfort. Workshops will serve, as already now, to disguise the shortage of students. But still there will be nervousness.

There is another and more subjective danger. The harmony which one now foresees is based on a general commitment to neoclassical economics or its applied refinements. Accomplishment in model-building and refinement is, I think nearly all will agree, an increasingly stern requirement. We would not again hire a labor economist who, like Professor Dunlop or Professor Slichter, made his career out of a practical association with the unions and the problems of labor mediation. Professor Leontief, were he now showing the experimental tendencies that marked his early career, would be in trouble. Even his work, when firmly established, was not strongly supported. We would not have an economist who was too much preoccupied with the practical details of tax reform—unless he protected his flank by suitable theoretical or econometric exercise. My own past tendencies would certainly not be acceptable for promotion—although on the merits of this, with characteristic tact, I disqualify myself. What is not in doubt is that we are now very strong in the journals but much less strong in the obscenely practical matters on which many people, including many students, expect economists to be useful. This could be damaging to the reputation of the Department. The latter has always depended in appreciable measure not on the great scientists but on its vulgar practitioners.

Now let me say a word on reform. Mention of reform leads to thoughts of reform of the Department—so it is with faculty and also students. The present course of instruction is wrong. Let us find the right one. The problem is that no one line of graduate economic instruction can now serve all interests, reflect all points of view. Nor does it deal with the highly important fact that instruction is far less important than the inclination of the people who guide it. The Department is now a vast parliamentary body. So long as there is only one educational track, as a matter of course it will reflect the preferences of the majority. All of us, in the oldest of academic traditions, appraise excellence using ourselves as the yardstick. Reform requires that we begin to provide real choices as to teachers and as to work. Three possibilities occur to me:

  1. We should have in the Department of Economics two tracks to two Ph.D.’s. One of these would be in economics, another in (say) social economics. Professors in the Department would be grouped into two broad Executive Committees around these tracks. And each of these two Executive Committees would have responsibility not only for developing graduate work in its track and for examination therein but also for recruitment and promotion. This would broaden the choice for students; would mean that we would have two more nearly corporate bodies rather than one parliamentary body to guide instruction and appointments; would foster the kind of competition which all economists intrinsically and devoutly applaud; and would reduce by half the present parliamentary tendency to exclude the minority view. The first track would continue the present program with all of its neoclassical and model-building rigor. The second track would be experimental, humane and with a much stronger orientation to the emerging issues of our time. It would not, and this must be emphasized, involve any less effort.
  2. The second possibility would be to establish within the Department an institute—an Institute for Economic Innovation. This would enlist the members of the senior faculty so inclined, would develop a program purely of graduate instruction and would lead also to a degree which would reflect its own course of instruction. The purpose of constituting this as an institute would be twofold: to get the energy and attention of one man who would see the institute as the projection of his own efforts, and to use the institute as a device for raising new funds for both chairs and research. It is my near certainty, based on some experience as a medicant, that this enterprise, properly presented, would be very attractive to donors. I am not sure, however, that given the present size of the Department, it would not be wiser simply to allot some Graustein appointments to the Institute for the next few years.
  3. The third and final possibility would be to have two Departments of Economics—one Department of Economics and one Department of Social Economics. There are advantages to this—again the healthy competition in which all economists theoretically rejoice, elimination of the present diseconomies of scale, the much more clearly defined differentiation of purpose. It would not be as difficult a solution as seems at first glance. Those who approve of the Department as it is would remain with the Department of Economics. The rest would make the new Department. It would form its character from those who join it in the feeling that a more strongly innovative, humane and applied—in the modern sense—approach to economics is in order. The problem is, of course, that it involves the largest disruption in established institutional arrangements. That is not something to be undertaken lightly. Sometimes, though, that is good.

I am persuaded that in one or another of the above arrangements lies the only hope for a satisfactory future. For a while the tranquility that is in prospect will be greatly enjoyed. Given the sterile tendencies of the accepted economics and the attitudes of the students, it will be, if not the tranquility of the tomb, certainly that of a kind of somnambulant decay.

J.K.G.

Source: John F. Kennedy Presidential Library. John Kenneth Galbraith Personal Papers. Series 5. Harvard University File, 1949-1990. Box 526. Folder “Memorandum on Reorganization of the Department of Economics”.

Image Source: Harvard Class Album 1958.