Author: Irwin Collier

Categories
Courses M.I.T. Syllabus

MIT. Course Outline of Economic Statistics. Robert Solow, 1960

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

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Robert Solow’s name is typically associated with neo-classical growth theory and MIT macroeconomics of the Keynesian persuasion. This posting reminds us that he was originally hired to beef up the statistics instruction in the MIT economics department. Like his Harvard professor Wassily Leontief, his theoretical work never really left the gravitational field of empirical economics.

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14.382 Economic Statistics (A)
Prereq.: 14.371T  [Statistical Method]
Year: G(2)                  3-0-6

Study of selected statistical techniques found useful in recent economic work, especially the regression analysis of economic time series.

Solow

Source: The Massachusetts Institute of Technology Bulletin 1959-1960. General Catalogue Issue, p. 248.

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COURSE OUTLINE
14.382
[Economic Statistics, Robert M. Solow]

Spring Semester, 1960

 

I. AGGREGATION AND INDEX NUMBERS (3 weeks)

A. Aggregation

R. G. D. Allen, Mathematical Economics, Chapter 20.

Stedman B. Noble, “Structure and Classification in Resource Flow Models”, George Washington University Logistics Research Project, May 1959.

____________________, “Resource Flow Models with Application”, delivered to the Econometric Society, December 1959.

Zvi Griliches and Y. Grunfeld, “Is Aggregation Necessarily Bad?”, The Review of Economics and Statistics, forthcoming.

E. Malinvaud, “L’agrégation dan les Modéles Économique”, Cahiers du Séminaire d’Économetrie, No. 4, 1956, pp. 69-143.

B. Index Numbers

Kenneth J. Arrow, “The Measurement of Price Change”, The Relation of Prices to Economic Stability and Growth, Joint Economic Committee Compendium, March 1958.

C. S. Carter, W. B. Reddaway and R. Stone, The Measurement of Production Movements, Cambridge University Press: England, 1948.

Federal Reserve Bulletin, “Revised Industrial Production Index”, December 1959, pp. 1451-1466.

 

II. ESTIMATION TECHNIQUES (4 weeks)

A. Small Sample Properties of Simultaneous Equation Estimators

Robert L. Basmann, “An Experimental Investigation of Some Small Sample Properties of (GCL) Estimators of Structural Equations”, November 1958 (dittoed).

_____________________, “On Finite Sample Distributions of Identifiability Test Statistics”, March 1959 (dittoed).

Harvey M. Wagner, “A Monte Carlo Study of Estimates of Simultaneous Linear Equations”, Econometrica, Vol. 26, 1958, pp. 117-133.

Robert Summers, “Capital-Intensive Approach to the Small Sample Properties of Various Simultaneous Linear Equation Estimators”, 1958 (unpublished).

Richard J. Foote, “An Experiment to Test the Relative Merits of Least Squares and Limited Information Coefficients for Forecasting Under Specified Conditions”, Analytical Tools for Studying Demand and Price Structures, 1958, pp. 128-42.

B. Specification

G. E. P. Box and Norman Draper, “A Basis for Selection of a Response Surface Design”, Journal of the American Statistical Association, September 1959.

Henry Scheffe, The Analysis of Variance, “The Effects of Departures from Underlying Assumptions”, Chapter 10, 1959.

Hans Theil, Economic Forecasts and Policy, Chapter 6.2, pp. 204-39, “Statistical Methodology”, and Appendix 6B, “Analysis of Specification Errors”, pp. 326-33.

 

III. MEASUREMENT OF SUPPLY, COST, AND PRODUCTION FUNCTIONS (3 weeks)

Robert M. Solow, “Technical Change and the Aggregate Production Function”, The Review of Economics and Statistics, August 1957.

Luigi Pasinetti, “On Concepts and Measures of Changes in Productivit” and Comment by R. Solow, Review of Economics and Statistics, August 1959, pp. 270-86.

Jack Johnston, “Statistical Cost Functions: Reappraisal”, Review of Economics and Statistics, 1958.

Zvi Griliches, “Hybrid Corn: And Exploration in the Economics of Technical Change,” Econometrica, October 1957, pp. 501-22.

Paul H. Douglas, “Are There Laws of Production?”, American Economic Review, March 1948, pp. 1-41.

Irving Hoch, “Simultaneous Equation Bias in the Context of the Cobb-Douglas Production Function”, Econometrica, October 1958, pp. 566-78.

John R. Meyer, M. J. Peck and others, The Economics of Competition in the Transportation Industries, Harvard University Press: Cambridge, 1959.

Lawrence R. Klien, Econometrics, “A Cross-Section Model of Production of Railway Services”, Chapter 5, Section 4, pp. 226-41.

Hollis Chenery, “Engineering Production Functions”, Quarterly Journal of Economics, November 1949.

Kenneth J. Arrow, Marvin Hoffenberg, A Time Series Analysis of Inter-industry Demands, The RAND Corporation, North-Holland Publishing Co.: Amsterdam, 1959.

Hollis Chenery and Paul G. Clark, Interindustry Economics, 1959.

 

IV. MACRO MODELS AND DECISION THEORY (5 weeks)

Hans Theil, Chapter 3, “Postwar Macro Economic Forecasts in the Netherlands and Scandinavia,” Chapter 5, “Underestimation of Changes,” pp. 154-183, Chapter 7, “Forecasts and Policy: Problems and Tools,” pp. 379-410, Chapter 8, “Underestimation of Changes: Analysis and Implications,” pp. 411-529.

James Duesenberry, Quarterly Model of U.S. Economy.

New Klein Model, Suits-Klein-Goldberger Model.

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Source: Robert Solow papers. Box 68, Folder “Reading lists”, David M. Rubenstein Rare Book & Manuscript Library, Duke University.

Image Source: MIT Museum.

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Courses Exam Questions Harvard Socialism Suggested Reading Syllabus

Harvard. Schumpeter’s Socialism Course. Syllabus and Exam, 1946

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the list of “artifacts” from the history of economics I have already assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment below….

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…Regular vistors to this blog have seen that an economics course on socialist thought and movements was a regular part of the curriculum at Harvard during the first half of the twentieth century. Up to this posting I have included material from the following courses: Thomas Nixon Carver’s SINGLE TAX, SOCIALISM, ANARCHISM (1919-20), Edward Mason and Paul Sweezy’s ECONOMICS OF SOCIALISM (1938), and Paul Sweezy’s ECONOMICS OF SOCIALISM (1940).

This course became part of Joseph Schumpeter’s teaching portfolio in the 1940s. His course outline and exam for the winter semester of 1943-44 has been posted as well.

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[Course Announcement]

Economics 11b. Economics of Socialism

Half-course (spring term). Mon., Wed., and (at the pleasure of the instructor) Fri., at  10. Professor Schumpeter.

Source: Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences During 1945-46. Official Register of Harvard University, Vol. 42, No. 8 (March 31, 1945), p. 36.

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[Enrollment]

[Economics] 11b (spring term) Professor Schumpeter. –Economics of Socialism.

5 Graduates, 18 Seniors, 21 Juniors, 15 Sophomores, 1 Freshman, 8 Radcliffe, 9 Other.

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1945-46, p. 58.

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ECONOMICS 11b
1945-46
OUTLINE AND ASSIGNMENTS

[Joseph A. Schumpeter]

I.   FIRST TWO WEEKS: The Socialist Issue.

Socialist ideas and socialist parties. Socialism and the labor movement. Laborite and intellectualist socialism. The definition of socialism.

*H. W. Laidler, Social-Economic Movements, 1944, esp. Parts V and VI.
Encyclopaedia of the Social Sciences, article on Socialist and Labor Parties.

II. THIRD TO FIFTH WEEK: The Theory of Centralist Socialism., 1938

*O. Lange and F. M. Taylor, The Economic Theory of Socialism, 1938.
[A. P. Lerner, The Economics of Control, 1944.]

III. SIXTH TO NINTH WEEK: The Economic Interpretation of History. The Class Struggle, and the Marxist Theory of Capitalism.

*Karl Marx, Capital, Volume I, chs. I, IV, V, VI.
Marx and Engels, The Communist Manifesto.
*Paul M. Sweezy, The Theory of Capitalist Development, 1942, chs. I-VI
(pp. 1-108).

IV. TENTH TO TWELFTH WEEK: The Socialist Theory of the State and of the Proletarian Revolution, Imperialism, National Socialism.

V.I. Lenin, State and Revolution, 1926.
[M. Dobb, Political Economy and Capitalism, ch. VII.]
Paul M. Sweezy, The Theory of Capitalist Development, Chs. XIII-XIX.

READING PERIOD ASSIGNMENT

Read E. Bernstein, Evolutionary Socialism, 1909, especially pp. 18-95, and survey again the items in the reading list marked *.

NOTE: The items in square brackets are recommended but not assigned. So is: Bienstock, Gregory, and Schwartz, Management in Russian Industry and Agriculture, 1944.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1. Box 4, Folder “Economics, 1945-1946 (1 of 2)”.

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1945 – 46
Harvard University
Economics 11b

One question may be omitted. Arrange your answers in the order of the questions.

  1. What is Syndicalism?
  2. Characterize the type, aims, and importance of the group that called itself Fabians.
  3. “Rational allocation of factors of production presupposes the existence of prices. Prices presuppose free markets. Hence the problem of rational allocation of factors of production would be insoluble in a socialist society.” Criticize.
  4. Discuss the various methods by which investment could be financed (that is, the resources for the extension of the productive apparatus could be provided) in a socialist society.
  5. Explain and criticize what is known as the Marxist Theory of Exploitation.
  6. What meaning do you attach to, and what do you think of, the proposition that Socialism is “inevitable?”

Final, May 1946

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes Box 2, Folder “Course notes (Jan 1950—Found in Drawer—Cambridge Study) Misc 1945-1947”.

Image Source: Harvard Album 1947.

Categories
Columbia Economists Funny Business M.I.T.

Columbia. Kindleberger remembers Simkhovitch, mid-1930s

Charles Kindleberger, ca 1950

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

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We met the curious Columbia University Professor Vladimir Gregorievitch Simkhovitch in an earlier posting. To recall briefly, Simkhovitch was a Russian born, German-trained economic historian who taught economic history and the course on socialist economics (more like anti-Marxian socialist economics) that he took over from John Bates Clark at Columbia. Milton Friedman took Simkhovitch’s economic history course.

Simkhovitch, Vladimir G. Marxism vs. Socialism. New York: Henry Holt and Company, 1913. Book first published in installments 1908-12 in Political Science Quarterly.

Charles Kindleberger was both a gentleman and a scholar who was respected and loved by his colleagues and former students. Upon the occasion of his eightieth birthday (he went on to live to the age of 92), he was presented a bound volume of brief reminiscences from everybodys who are (famous) anybodys to somebodys who are (relative) nobodys but who were all touched in some way by Kindleberger.

Today’s posting provides an assist to Professor Frank Fisher, the volunteer “custodian of [part of the Kindlberger] oral tradition”. One detail gets incorrectly transmitted in the Fisher rendition—Kindleberger was never a colleague of Simkhovitch, the two of them overlapped when Kindleberger was a Columbia graduate student in the mid 1930s.  In his reminiscence for the birthday volume, Fisher wrote:

“When Charlie Kindleberger retired from M.I.T., he asked at his party, “Who will tell my Simkhovitch stories?” I don’t know whether Charlie heard me, but I said I would.

Simkhovitch, who was Charlie’s colleague at Columbia, is the principal character in two stories (so far as I know). I have given both of them a good home and it seems appropriate that I should use them today.

In story number one, the young Kindleberger, having carefully planned out his lectures for the term, finds that with some time left to spare in his first lecture he has used up all the material for the course. After vamping for the rest of the lecture period, he seeks Simkhovitch’s advice and is told: “Recipe for education: take teaspoon full of ideas and five gallons water. Stir. Dispense with eye dropper.”…

…In story number two, a student is on the verge of failing his Ph.D. exams and the department is debating what to do. Simkhovitch says: “This man want degree. We got plenty degrees. Give him degree.”

 

 

Source: Excerpt from Frank Fisher’s contribution to the collection: Reminiscences of Charles P. Kindleberger on his Eightieth Birthday, October 12, 1990 in the Charles P. Kindleberger Papers, Box 24, MIT Libraries, Institute Archives and Special Collections.

Image Source: Charles Kindleberger in MIT Technique, 1950.

Categories
Chicago Curriculum Economists Exam Questions

Chicago. Paul Samuelson and Jacob Mosak. A.B. Comprehensive Exam Grades. 1935

November 2003. Samuelson and I after Bergson Commemoration.

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

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Paul Samuelson and Jacob Mosak were undergraduate classmates at the University of Chicago. The two of them along with 27 other students were required to take a battery of comprehensive examinations in economics for the Bachelor’s degree.   I found the distribution of grades for the comprehensive exams over the period 1934-1938 in the economic department records, as well as the distribution of grades for the separate courses taken by the 29 students.

Plot-spoiler: Paul Samuelson was the top undergraduate student at Chicago in the Spring Quarter of 1935 (or perhaps ever) and the first runner up, who lived to the grand old age of 99,  also went on to have a full and distinguished career as an economics professional. Mosak’s greatest research hit in economics was his Cowles Foundation Monograph, General Equilibrium Theory in International Trade (1944).

I have appended to this posting descriptive material about the comprehensive exams and the descriptions of the individual courses along with instructor names according to the 1934-1935 Announcements.

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REPORT ON PAST COMPREHENSIVE EXAMINATIONS FOR THE BACHELOR’S DEGREE IN THE DEPARTMENT OF ECONOMICS

 

Quarter

 A B C D E F

Total

Spring, 1934

 1 1

Winter, 1935

 1 3 3* 7

Spring, 1935

 3 11 12     3

29
Summer, 1935 1 2 1

4
Autumn, 1935 2 1 3

6

Winter, 1936

 1 1 3 2 7

Spring, 1936

 3 8 5 3 0 3 22

Summer, 1936

 1 4 3 8
Autumn, 1936 1 2 1

4
Winter, 1937 1 2 1

4
Spring, 1937 3 8 4 4 3

22

Summer, 1937

 1 5   2   2 10
15 35 35 14 0 25

124
*Includes one unfinished examination. [name omitted]
[Handwritten additions:]

Winter, 1938

   1 3     1 5

Spring, 1938

 3 4 10 3   2 22
18 40 48 17   28

151
% 11.92 26.49 31.79 11.25   18.54

 

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[Number of students awarded a particular grade by economics course numbers for the Spring Quarter 1935 comprehensive examinations]

209 210* 211 212 220 221-2 230 240 260 270** [Comp. Avg. ]

A+

 1 0 0 1 0 0 0 0 0 1

A

 1 0 2 0 1 0 1 2 4 0 1

A-

 5 1 1 0 2 0 1 1 1 0 1

B+

 7 1 1 0 2 0 1 4 1 0 1

B

 6 4 2 0 1 0 3 5 3 4 9

B-

 4 1 1 0 2 0 5 3 1 2 1

C+

 0 2 6 0 0 0 4 3 3 7

4
C 1 6 5 0 4 9 3 1 0 1

8
C- 2 4 3 0 1 0 2 0 1 2

0
D+ 0 3 0 0 2 0 2 0 0 0

0
D 0 2 3 0 1 3 2 0 0 2

0
D- 0 2 0 0 0 0 4 0 1 0

0
E/F 2 3 4 0 0 1 1 0 2 3

3

Samuelson

 A A- A A A A A A+
Mosak A+ B+ A A+ C- B- A

A

*Numerical grades reported for this course, converted to letter grade using the following scale:

A+ (95-100); A (93-94); A- (90-92);
B+ (87-89); B (83-86);       B- (80-82);
C+ (77-79); C (73-76); C- (70-72);
D+ (67-69); D (63-66); D- (60-62);
F (0-59).

**For four cases of exact border-line grades in Economics 270, e.g. B+/A-, I have assigned the higher grade.

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[Role of the Comprehensive Examinations]

THE BACHELOR’S DEGREE

On admission to the Division, the students specializing in the Department arranges with the Departmental Counselor a suitable program of study in economics. He is expected to include in his departmental program the materials of 7 courses beyond Social science I and II. His comprehensive examination in economics will cover economic theory, accounting, statistics, economic history, and money and banking, as developed in Economics 209, 210, 211, 220 or 221, and 230. The comprehensive examination will also cover two elective fields, preferably labor, government finance, or international economic relations, as developed in Economics 240, 260, and 270. The scope and content of the several courses mentioned are indicated in the course announcements printed below.

[…]

THE DEGREE OF MASTER OF ARTS

[…]

The specific requirements for the Master’s degree are:

  1. A minimum of 8 courses, or their equivalent (of which at least 6 must be in Grades II and III above). At some previous time the candidate should have covered the substantial equivalent of the requirements for the Bachelor’s degree in Economics. This equivalence may be shown by courses taken or by examination. The candidate must also have the preparation in the other social sciences required for the Bachelor’s degree at the University….

[…]

[Economics Course Descriptions 1934-35]

 

  1. Intermediate Economic Theory. – A course designed for undergraduates majoring in economics who have completed the other departmental requirements for the degree, and for graduate students with limited training in systematic theory. It deals with forces controlling, through the price system, the organization of economic activity. Prerequisite: Senior standing and Economics 210, 211, 230 or their equivalents. Summer, 10:00; Autumn, 11:00; Winter, 11:00, [Paul Howard] Douglas.
  1. Introduction to Accounting. – (1) The principles of double-entry accounting. (2) The principles of valuation and of income determination; the mathematical problems arising from accumulating and discounting future sums and annuities. (3) A survey of the uses and limitations of accounting information and compares the concepts of cost used by accountants and by economists. Prerequisite: Social Science I and II or their equivalent. Summer, 11:00, [Wilfrid Merrill] Helms; Autumn, 9:00, Shields; Spring, 11:00, [Theodore Otte] Yntema.
  1. Introduction to Statistics. – The elementary principles of statistics. Main topics: frequency distributions, correlations, time series, index numbers. Prerequisite: Mathematics 104 or its equivalent. Summer, 10:00, [John Higson] Cover; Autumn, 11:00, [Henry] Schultz; Winter, 9:00,—.
  2. Intermediate Statistics. [not offered 1934-35, description from 1933-34 follows] This course extends the scope of Economics 211 to include a brief introduction to partial and multiple correlation, but its main objective is to make the elementary statistical methods part of the working equipment of the student. Prerequisite: Economics 211 and introductory courses in economics, accounting, finance, and marketing. Spring 9:00, [Aaron] Director.
  1. Economic History of the United States. – A general survey from the colonial settlements down to the present emphasizing the period since 1860. Prerequisite: Social Science I and II or their equivalent. Summer, 8:00, [Albert Gailord] Hart; Winter 1:30, [Chester Whitney] Wright.
  1. Economic History of Classical and Western European Civilization. –A survey of industrial conditions in their relation to economic, social, political, and cultural history at selected periods and in selected countries, undertaken with a view to understanding the nature and significance of modern industrialism. Prerequisite: Social Science I and 2 courses in European history, or equivalent. Autumn, 1:30; Spring, 1:30, [John Ulric] Nef.
  1. Introduction to Money and Banking. – A study of the factors which determine the value of money in the short and in the long run; the problem of index numbers of price levels; and the operation of the commercial banking system and its relation to the price level and general business activity. Prerequisite: Social Science I and II or equivalent. Summer, 9:00, [Albert Gailord] Hart; Autumn, 1:30, [Lloyd Wynn] Mints; Spring, 9:00, [Albert Gailord] Hart.
  1. Labor Problems. – General survey of problems of labor arising in a system of free enterprise. Poverty, inequality, conditions of work, and unemployment are some of the topics considered. Trade-unionism and collective bargaining contrasted with state legislation as devices for dealing with these problems. Prerequisite: Social Science I and II or equivalent. Spring, 10:00, [Paul Howard] Douglas.
  1. Introduction to Government Finance. – A course dealing with fiscal problems of government, mainly in their economic aspect. Practices in regard to expenditure, taxation, and borrowing studied in problems of policy critically examined. Prerequisite: Social Science I and II or equivalent. Spring, 11:00, [Henry Calvert] Simons.
  1. International Economic Relations. – A survey of international economic relations with special emphasis on the theory of international trade and the economic foreign-policy of the United States. Are Prerequisite: Social Science I and II or equivalent. Winter, 11:00, [Harry David] Gideonse.

 

Source: University of Chicago Announcements. The College and the Divisions for the Sessions of 1934-1935. pp. 281-285.

Image Source:  Photo taken of Paul Samuelson and me at the Harvard Faculty Club following the memorial service for Abram Bergson in November 2003.

 

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

M.I.T. Intermediate Macroeconomics. Modigliani, 1961

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the list of “artifacts” from the history of economics I have already assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment below….

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These course materials for undergraduate intermediate macroeconomics at MIT in the Spring term of the 1960/61 academic year are clearly identified as being for a course taught by Franco Modigliani. As it happens from time to time, one finds syllabi and reading lists in the files of colleagues and not just in the papers of students who took the course or the professors who taught them. These materials from reading list through class-assignments, term-paper assignment, up to and including the final examination all come from Robert Solow’s papers at the Duke University library’s Economists’ Papers Project. 

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14.05 Economic Fluctuations and Growth

Prereq.: 14.02
Year: U(1,2)     3-0-5

Analytical study of determinants of national income level, employment, and prices; study of their fluctuations and long-run trends. Consideration of historical and current behavior of the economic system, and role of stabilization policies.

Modigliani

Source:   Massachusetts Institute of Technology Bulletin. The General Catalogue Issue for the Centennial Year 1960-61. p. 240.

 

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Spring, 1961
Professor Modigliani

 

14.05—Economic Fluctuations and Growth
READING LIST

 

Suggested Purchases: Dernburg & McDougall, Macro-Economics (1960)—(referred to below as D&M)
US Department of Commerce, U.S. Income and Output (1958)
Federal Reserve Chart Book, Historical Supplement (1960)

Review references in each section are to Samuelson, Economics (4th ed., 1958)

 

I. Introduction

Review: Samuelson, Ch. 1
New: D&M, Ch. 1

Friedman: Essays in Positive Economics, pp. 1-30.

II. National Income and Other Measures of Economic Activity.

Review: Samuelson, Ch. 10
New:   D&M, Ch. 1-5

Hart, Money, Debt, and Economic Activity (2nd ed., pp. 167-171)
G. Moore, Statistical Indicators of Cyclical Revivals and Recessions, pp. 1-20, 63-77
Survey of Current Business—“The Business Situation” in a recent issue, and look at annual review in February, 1960, number.

References: For current business conditions and course problems, get acquainted with the following, by examining thoroughly at least one recent issue:

Survey of Current Business (monthly; annual summary in February; National Income issue in July)
Federal Reserve Bulletin (monthly)
Economic Indicators (monthly; historical supplement, 1957)
See Bratt, Business Cycles and Forecasting (1953), Chapter 15, for additional source material

III. The Supply of Money and the Banking System.

Review: Samuelson, Chap. 15 and Appendix, 16.
New:   Hart, Money, Debt, etc., Ch. 4 and 6.

Federal Reserve System: Purposes and Functions

IV. The Determinants of the Level of National Income.

A. Monetary Approaches

Review: Samuelson, Ch. 14 and Appendix
New:   D&M, Ch. 9

Hart, Money, Debt, Ch. 10, 12

B. The Theory of Effective Demand

Review: Samuelson, Ch. 11, 12
New: D&M, Ch. 6, 7

Hart, Money, Debt, Ch. 11, pp. 167-179
(optional) Modigliani & Brumberg, “Utility Analysis and the Consumption Function”, in Post-Keynesian Economics (esp. pp. 388-418)
(optional) Ando, “Aggregative Implications of the Modigliani-Brumberg Consumption Function” (mimeographed), pp. 1-118 and Summary

V. Cyclical Fluctuations and Growth.

A. Nature and Causes of Economic Fluctuations

Review: Samuelson, Ch. 13
New: D&M, Ch 19, Section 1-3

Metzler, “The Nature and Stability of Inventory Cycles”, Review of Economics and Statistics, 1941-42
Modigliani, “Business Reasons for Holding Inventories and their Macro-economic Implications”, pp. 495-506
Modigliani, “Discussion of Hickman on Capacity, Capacity Utilization and the Acceleration Principle”, pp. 450-463 N.B.E.R. reprint
Cobren, “Inventories in Postwar Business Cycles”, Survey of Current Business, April, 1959
Tinbergen, The Dynamics of Business Cycles, Ch. 13
Hicks, Trade Cycle, Ch. 8, 9 (optional)
Fortune, series on the capital goods market in August, September, November, and December, 1958. (Sample, especially December issue.)

References only: Summaries of historical development of business cycle theories: Haberler, Prosperity and Depression, Part I.

B. Growth and its Interrelation with Cycles

D&M Ch. 16, 17
Abramovitz, Resource and Output Trends in the U.S. since 1870
(optional) Ando & Modigliani, “Growth Fluctuations and Stability”, AER, May 1959, pp. 501-524
Bratt, Business Cycles and Forecasting (1953 ed.), Ch. 3
“A New Look at Production Growth Rates”, in Survey of Current Business, April 1957
Fortune, “The Market of the 1960’s” (series of 9 articles, Jan.-Sept. 1959) (Sample, esp. April issue)
Committee for Economic Development, Economic Growth in the United States (hurriedly)

VI. Business Forecasting.

Charles Roos, “Survey of Economics Forecasting Techniques”, Econometrica, October 1955
Moore, Statistical Indicators of Cyclical Revivals and Recessions, pp. 63-77 (National Bureau of Economic Research Method)
Moore, Measuring Recessions, esp. pp. 259-272
Sidney S. Alexander, “Rate of Change Approaches to Forecasting—Diffusion Indexes and First Differences”, The Economic Journal, June 1958
Fortune, “The Business Roundup”, January 1960
“1959 Survey of Consumer Finances”, Federal Reserve Bulletin, July and September 1959 (note supplementary tables)
Klein & Lansing, “Decisions to Purchase Consumer Durable Goods”, Journal of Marketing, October 1955
Fortune, series cited above on “The Market of the 1960’s” and on “The Coming Capital Goods Boom”
Modigliani & Weingartner, “Forecasting Uses of Anticipatory Data on Investment and Sales”
Bassie, Economic Forecasting (good general reference)
Abramson and Mack, Business Forecasting in Practice (for reference)

VII. Public Policy and Economic Stabilization.

A. Synthesis of Monetary and Income Analysis

Review: Samuelson, Ch. 17
New: D&M, Ch. 8, 9, 10

B. Monetary Policy

D&M, Ch. 11
United States Monetary Policy (American Assembly) –(esp. Ch. 1, 2, 4, 6)
Friedman, “The Supply of Money and Changes in Output”, in The Relationship of Prices to Economic Stability and Growth (Joint Econ. Committee)
Bach, “The Economics and Politics of Money”, Harvard Business Review 1953 (reprint)
Committee on the Economic Report (Patman Subcommittee)—Replies pp. 368-384, 402-428 (for reference)

C. Fiscal and Debt Policy

Review: Samuelson, Ch. 18
New:   D&M, Ch. 20, 21

The Federal Budget in Brief for Fiscal 1961 (get acquainted; copy of complete budget also on reserve)
Committee on Economic Development, Taxes and the Budget; also reprinted in Readings in Fiscal Policy (Parts I and II only)
Committee on Economic Development, The Budget and Economic Growth
Samuelson, “The New Look in Tax and Fiscal Policy”, in Federal Tax Policy for Economic Growth and Stability, pp. 229-34
Butters, “Taxation, Incentives, and Financial Capacity”, in Readings in Fiscal Policy
McCracken, “The Debt Problem and Economic Growth”, Michigan Business Review, November 1956

D. Wages, Productivity, Prices, and Inflation

D&M, Ch. 12, 14, 18
Wages, Prices, Profits and Productivity, American Assembly, (esp. Ch. 1, 3, 4, 6)

E. Overall Stabilization Policy and Economic Growth.

Friedman, “Framework for Monetary-Fiscal Stability”, Readings in Monetary Theory, OR;
Bach, “Monetary-Fiscal Policy Reconsidered”, Readings in Fiscal Policy
Rockefeller Committee, The Challenge to America
C. E. D. Defense Against Inflation, July 1958
Eckstein, “Inflation, the Wage-Price Spiral, and Economic Growth”, in The Relationship of Prices to Economic Stability and Growth (Joint Economic Committee)
Bach, Inflation, Ch. 2, 4
Samuelson and Solow, “Analytical Aspects of Anti-Inflation Policy”, AER May 1959 (reprint)

VIII. International Aspects.

Review: Samuelson, Ch. 31 and Appendix
New:   D&M, Ch. 15

___________________________________________

 

Spring 1961
Professor Modigliani

14.05 – Economic Fluctuations and Growth
GUIDE SHEET TO BASIC ECONOMIC DATA SOURCES.

BASIC HISTORICAL INFORMATION:

Historical Statistics of the United States Colonial Times to 1952 (U. S. Government Printing Office) – Data on all major economic and many social areas, with descriptions of series.

U. S. Income and Output – A Supplement to the Survey of Current Business, providing data of all components of gross national product, 1929-1957.

Banking and Monetary Statistics, 1860-1941 (Board of Governors, Federal Reserve System)-More detailed series on money and banking, with descriptions of series.

The Economic Almanac (published annually by the National Industrial Conference Board) – each issue repeats large amount of historical data, some back to 1790. Several of these series go back further than the official government series; as such, they are often less accurate because of the less adequate coverage of the series and larger likely estimating errors involved.

(U. S. Census (U. S. Government Printing Office) – Vast amounts of data on most aspects of the economic life of business and individual, reaching back to 1790. Difficult to use without assistance or experience.

CURRENT DATA – OFFICIAL SOURCES

Survey of Current Business (U. S. Department of Commerce, monthly) – The most complete source of basic economic data, plus objective analyses of various economic developments. An annual survey is published each year in the February issue, and Annual Statistical Supplements have been issued in several recent years, which provide the data in more easily usable form than do most of the monthly issues.*

Federal Reserve Bulletin (Board of Governors, Federal Reserve System, monthly) – The basic source of current official monetary and banking data, plus monthly analyses of monetary developments.

Monthly Labor Review (U. S. Department of Labor) – The basic source of current official data on labor and on price movements, plus monthly analyses of developments in these areas.

Statistical Abstract of the U. S. (U. S. Government Printing Office, annually) – The basic annual compilation of all U. S. Government statistical data; corresponds to the Historical Statistics of the United States, above.

*Business Statistics, 1959 Biennial Edition – The latest major supplement to the Survey. It includes all major series published in the Survey, from 1929 through 1958 in most cases.

CURRENT DATA AND ANALYSES—UNOFFICIAL

There are a vast number of analyses of current economic developments published. Among the more widely recognized as careful and influential are:

Monthly Letter of the National City Bank of New York – General business conditions and financial conditions.

Fortune Magazine (monthly) – Current business analyses and industry studies, written from a relatively “liberal” business slant.

The Conference Board Business Record (National Industrial Conference Board, monthly) – Briefly analyzes current developments; more conservative than Fortune.

CURRENT EVENTS—NEWSPAPERS

Three newspapers are widely thought to provide the most complete coverage of current economic events. They are:

New York Times (daily and Sunday) – Provides the most complete coverage of current economic events.

New York Herald-Tribune (daily and Sunday) – The Times’ closest rival.

Wall Street Journal (daily) – Leading financial and business paper. Complete daily data on most important markets; also includes many speculative news stories and analyses of current and expected developments.

___________________________________________

Spring, 1961
Professor Modigliani

14.05-Economic Fluctuations and Growth
WRITTEN ASSIGNMENTS

I. Due Monday, February 13

“Inflation erodes the purchasing power of the dollar, robs the average man, and lowers the national standard of living. These results are pernicious and disastrous. Inflation must be avoided.” (Excerpt from recent statement by U. S. Senator)

Do you agree with the Senator? Why or why not?

 

II. Due Friday, September 17

Prepare a brief report (two to three pages) on the current business conditions and the outlook for the next six to twelve months.

___________________________________________

Spring, 1961
Professor Modigliani

14.05-Economic Fluctuations and Growth
WRITTEN ASSIGNMENT

III. Due February 24

Economists as well as politicians are very much concerned with the overall burden of taxes, or share of the nation’s income taxed away by the government.

Using as a framework for National Income Accounts of the Department of Commerce, state and defend what seems to you the most useful and meaningful measure of the “share of the nation’s income taken by the government” (paying attention to the numerator as well as to the denominator). Compute this year for 1948 and 1957.

Is the above concept identical with the “share of the nation’s output of goods and services consumed by the government”? If not, define the second concept and measure this year for the same two years.

Include any comments that may be suggested by your empirical findings.

___________________________________________

Spring, 1961
Professor Modigliani

14.05-Economic Fluctuations and Growth
WRITTEN ASSIGNMENT

IV. Due March 6

In a small, completely isolated economy (i.e., no foreign trade with money-using habits comparable to those of the U. S., there are four identical banks. Each bank’s balance sheet is as follows:

Cash $3,000,000 Deposits $8,000,000
Loans 2,000,000
Government Securities 5,000,000 Capital and Surplus 2,000,000
$10,000,000 $10,000,000

The law prescribes that banks must hold a 20% cash reserve against deposits. There is no central bank.

(a) A customer of bank letter a minds $1 million of gold (considered as cash for reserve purposes) and deposits it in his bank. Trace through any likely expansion of the money supply by Bank Letter a and by the entire banking system. What would be the maximum expansion possible?
Specify clearly any assumptions that you make, and state your reasoning carefully and precisely.

(b) Is the banking system in a more or less sound position after the gold deposit in any consequences you have predicted above? Explain why or why not.

___________________________________________

Spring, 1961
Professor Modigliani

14.05-Economic Fluctuations and Growth
WRITTEN ASSIGNMENT

V. Due March 10

In 196X the Federal Government will collect about 85 billion in taxes, according to present estimates, which also indicate that the money will be used roughly as follows:

Regular government expenses $77 billion
Repayment of government debt
…..Held by commercial banks 3 billion
…..Held by individuals and businesses other than banks 5 billion

Suppose these estimates are accurate, and assume it Government deposits are carried out with the commercial banks.

a. What will be the effect of these operations on the amount of money (current and deposits) owned by the public (including individuals and businesses other than banks)?

b. What will be the effect on the amount of total liquid assets (money plus government securities) owned by the public?

c. How, if at all, would your answers to (a) and (b) have been different if:

(1) All bonds paid off had been owned by commercial banks.
(2) All months paid off had been owned by the Federal Reserve Banks.

d. What generalization, if any, can you draw from this reasoning as to the most effective means of retiring the government debt, if the main aim is to alleviate inflationary pressure.

Explained concisely the reasoning by which to obtain the answers given.

___________________________________________

14.05-Economic Fluctuations and Growth
TERM PAPER—DUE MAY 15, 1961

Write an essay on the postwar “creeping inflation” in the U.S. – Its nature, causes and possible remedies. The essay should review the major explanations that have been advanced (e.g. cost-push and demand-poll); assess their usefulness in the light of the empirical evidence; and provide a formulation of your own conclusions and the evidence which supports them. It should further examine the implications of your analysis with respect to the outlook for price stability in the years immediately ahead.

The following items have been placed on reserve in Dewey Library to serve as a starting point, you should feel free to trace and use other references.

Books

American Assembly, Wages, Productivity, Prices, and Inflation
American Assembly, Wages, Prices, Profits and Productivity
Bowen, W. G., The Wage–Price Issue

Pamphlets, Monographs, Periodicals, etc.

Bowen, W. G., “Wage Behavior in the Postwar Period”, monograph, Industrial Relations Section, Princeton University, 1960
Eckstein, O., “Inflation, the Wage-Price Spiral, and Economic Growth”, in The Relationship of Prices to Economic Stability and Growth (Joint Economic Committee)
Phelps, E. S., “A Test for the Presence of Cost Inflation in the United States, 1955-1957”, Yale Economic Essays, Spring 1961
Samuelson and Solow, “Analytical Aspects of Anti-Inflation Policy”, AER, May 1960
Schultze, C., “The Recent Inflation in the United States”, Study Paper No. 1, Joint Economic Committee, 1959
Selden, R., “Cost-Push Versus Demand-Pull”, JPE, February 1959

___________________________________________

Prof. Modigliani
May 24, 1961

 

14.05 – ECONOMIC FLUCTUATIONS AND GROWTH
Final Examination

Answer all Questions.

I. Indicate whether the following statements are true or false and give a brief explanation of your answer. Major weight attaches to the explanation. (5 points per question)

(a) The money supply can always be increased through the Federal Reserve open market purchases.

(b) The relation between the two main demand liabilities of the FRB, namely Federal Reserve notes and member bank deposits is determined primarily by reserve requirements.

(c) Inflation will tend to occur whenever the money supply rises faster than productivity.

(d) Liquidity preference helps to explain why the velocity of circulation tends to vary over the business cycle.

(e) If the rate of investment expenditure declines, the stock of capital goods in the economy declines.

(f) Built-in flexibility in fiscal policy means that the level of government expenditure should vary countercyclically.

(g) A high marginal tax rate has a stabilizing effect on the economy by reducing the marginal propensity to consume.

(h) The most important characteristic of a good leading indicator is that it should always turn ahead of general business conditions.

 

II. (20 points) Given the following information (in billions of dollars per year):

Full employment income (Yf) 300
Consumption expenditure 20 plus 80 percent of disposable income
Government purchase of goods and services 50
Government receipts 20 percent of national income (Y)
Transfer payments 10 plus 5 percent of the difference between Yf and Y
Net investment 22

(a) Calculate the equilibrium level of income implied by this information and explain carefully in what sense it is an “equilibrium” level.

(b) What rate of investment would be required to bring about full utilization of resources? What measures other than an increase in investment could be utilized to reach full employment?

 

III. (20 points) Define the following concepts:

(a) multiplier

(b) capital coefficient

(c) acceleration principle,

and explain their use in business cycle analysis.

 

IV. (20 points) Explain the functioning of monetary policy as a stabilization device, and analyze its strength and weaknesses.

 

Source: Duke University. Rosenstein Library. Robert Solow Papers. Box 68. Folders “Reading Lists”, “Assignments, home problems”, and “Exams, tests, quizzes”.

Categories
Bibliography ERVM

New addition: The Economics Rare Book Reading Room

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

__________________________

For me a formative experience as a student of the history of economics was to do research in the Beinecke Rare Book Library at Yale University in 1973-74  for my senior essay on the Physiocrats. It was magnificent to sit at a table and have rare old books served to me. I felt like a grown scholar. This led to an addiction to rummaging through used book stores in search of printed highs. I am now a recovering bibliophile who has limited himself to the wonderful Ersatz-Antiquariat of the internet. Analogous to a Google-Street-View junkie, I am hooked on searching for scans of the stuff that are quartered in the rare book libraries of the world.

I have set up a page that I call “The Economics Rare Book Reading Room” where I will be posting links to early editions of classic economics works. I begin modestly with the first two editions of Adam Smith’s Wealth of Nations that are at the Boston Public Library. I encourage readers of the blog to suggest links to their favorite discoveries of scanned early editions!

Categories
Courses Exam Questions Harvard Socialism Syllabus

Harvard. Economics of Socialism. Mason and Sweezy, 1938

Between one slice of two weeks of pre-Marxian socialism and a slice of two weeks of the economics of planning, Mason and Sweezy offered their students a full portion of Marxian economics with an added dash of Leninism. This posting provides the enrollment, syllabus and final examination questions for 1938. Future Nobel prize laureate James Tobin was a student in the course and he took excellent notes! Here  a link to the Economics of Socialism that Paul Sweezy taught by himself in 1940.

__________________________

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

__________________________

[Course Enrollment: Economics of Socialism]

[Economics] 11b 2hf. (formerly 7d). Professor Mason and Dr. P. M. Sweezy.—Economics of Socialism.

1 Graduate; 27 Seniors; 23 Juniors; 1 Sophomore: Total 52.

Source: Harvard University. Report of the President of Harvard and Reports of Departments for 1937-38, p. 85.

__________________________

ECONOMICS 11 b
Outline and Reading
1937 – 38

Week of
Feb. 7-12
Mason		 a.  Outline of Course
b.  Utopian and Scientific Socialism
c.  Nature of Socialism as Utopia
Feb. 14-19
Mason		 a.  Saint-Simon
b.  Fourier
c.  Robert Owen
Reading:

Engels, Anti-Dühring, Part III
Strachey, Theory and Practice of Socialism, Part III
Gide and Rist, History of Economic Doctrines, Book II,
Chs. 2 & 3
Feb. 21-26
Mason		 a.  Life and Works of Marx and Engels
b.  Dialectical materialism and
c.  Historical materialism
Reading:

Riazanov, Marx and Engels
Feb. 28-Mar. 5
Mason		 a.  Theory of Classes
b.  Theory of the State
c.  The State and Revolution
Reading:    Handbook of Marxism [Burns],

Ch. I (Communist Manifesto)
Ch. IV (Class Struggles in France),
Ch. V (18th Brumaire),
Ch. VII (Civil War in France),
Ch. XX (Introduction to the Critique of Political Economy)
Mar. 7-12
Mason		 a.  Theory of Value
b.  Theory of Value
c.  General Tendencies of Capitalist Development
Mar. 14-19
Mason		 a.  Concentration and Centralization of Capital
b.  Monopoly Problem in Capitalism
c.  According to Marx and Lenin
Mar. 21-26
Mason		 a.  Marxian and Modern Views on
b.  Wages and Technological Unemployment
c.  Marxian Theory of Crises
Mar. 28-Apr. 2
Sweezy		 a.  Marxian Theory of Crises
b.  Imperialism
c.  Imperialism
Reading:

Handbook of Marxism, Ch. XXI (Capital)
Capital, Vol. I, Part VII, Ch. XXV, Sections 1, 2, 3, 4
Lenin, Imperialism

VACATION
Apr. 11-16
Mason		 a.
b.  The Socialist Movement After Marx
c.
Apr. 18-23
Mason		 a.
b.  Marxian Schools of Thought

Reading:

Sidney Hook, Towards the Understanding of Karl Marx, Part I
Further assignment to be announced.
Apr. 25-May 7
Sweezy		 Two weeks to be devoted to the following topics:
1.  Marxian and Orthodox Economics
[Handwritten note:] Rev of Ec Studies June ‘35
2.  The Allocation of Resources in Socialist Society
Reading:

Lange, Marxian Economics and Modern Economic Theory                         [Handwritten note:] Rev of Ec Studies June ‘35
Hayek, Collectivist Economic Planning, Chs. I, III, V
Pigou, Socialism versus Capitalism

Reading Period:

Sidney and Beatrice Webb, Soviet Communism, Vol. II
Chs. VIII, IX
[Handwritten additions:]
Ch 6 Lippman

Oct. 36 Rev of Ec Studies—Lange—On the Economic Theory of Socialism—Taussig memorial—Sweezy—Economist in Socialist State.

_____________________________

 

1937-38
HARVARD UNIVERSITY
ECONOMICS 11b/2 

I

(About one hour)
Reading Period Question

  1. What features of the Russian economic system do you think could be adopted by a capitalist country? What features seem to you to be peculiarly the product of socialism and hence inapplicable under a capitalist system? 

II

Answer four questions

  1. “The most egregious error committed by the Marxist theorists is in misunderstanding and underrating the strength of the middle classes.” Discuss.

 

  1. What arguments does Mises use to support his claim that socialism is impossible? Do you agree with these arguments? State your reasons.

 

  1. Summarize the fundamentals of Lenin’s theory of imperialism. What do you regard as the particular merits or weaknesses of this theory?

 

  1. “To what extent is it true to say that the doctrine of the ‘withering away of the state’ implies anarchism as the ultimate goal of Marxian socialism?

 

  1. State and criticize the Marxian theory of value.

 

  1. Do you think that Marxists are justified in regarding crises and depressions as inevitable under capitalism? What grounds are there for believing that they might be eliminated under socialism?

 

Final. 1938

Source: Yale University Library, Manuscripts and Archives. James Tobin Papers, Box 6.

Image Source: Mason and Sweezy portraits from the Harvard Album 1939.

Categories
Chicago Exam Questions

Chicago. Exam questions for Oskar Lange’s Imperfect Competition Course, 1941 & 1944

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

__________________________

The economist Norman M. Kaplan’s papers includes the reading list, two exams, and over 200 pages of his clear and legible lecture notes from Oskar Lange’s graduate theory course on imperfect competition at the University of Chicago. I have already posted the reading list for the Autumn quarter of 1941. This posting consists of the course exam questions for both 1941 and 1944.

_________________________

The course description in the 1944-45 course announcements
[identical to course description in 1941-42 announcements]

  1. Imperfect Competition.—A study of price formation and production under various transitional forms between perfect competition and pure monopoly, such as monopolistic and monopsonistic competition, noncompeting groups, oligopoly and bilateral monopoly. The problem of equilibrium under such forms. Noncompeting groups and social structure. Application of the theory to the study of distribution of incomes, collective bargaining, excess capacity, price rigidity, and business cycles. Imperfect competition and economic policy. Prerequisite: Economics 209 or equivalent. Sum[mer] 2d hf 1st T and 1st hf 2d T [C. ½ C in 2d hf 1st T]: MWF 1-3; Autumn, TuThS 10; Lange.

Source: University of Chicago. Announcements of the College and the Divisions for the Sessions of 1941. Vol. XLIV, No. 8 (May 15, 1944), p. 275.

_________________________

 

ECONOMICS 307
Autumn, 1941

(Answer briefly)

I.

The following table shows the demand (sales) schedule and the total cost schedule from a monopolist producing a patented medicine:

Output
(in units)

 Price (per unit) at which
output can be sold
(in dollars)

Total cost
(in dollars)

0

 10

1000

100

 9

1200

200

 8

1400

300

 7

1600

400

 6

1800

500

 5

2000

600

 4

2200
  1. Calculate the total revenue in the marginal revenue schedules
  2. Calculate the marginal cost, average cost and average variable cost schedules. Indicate the fixed cost
  3. Find the most profitable output and price. Showed that it is not affected by a change in fixed cost
  4. Calculate the net profit.

 

II.

  1. Explain the conditions under which monopolistic and monopsonistic price discrimination is (a) possible, (b) advantageous to the firm
  2. Assuming that the firm finds it possible and advantageous to practice monopolistic or monopsonistic price discrimination, indicate the relationship between (in the case of monopoly) the prices charged in the different markets and the respective elasticities of demand, or (in the case of monopsony) between the prices paid in the different markets and the respective elasticities of supply
  3. What can be said about the social desirability of monopolistic price discrimination from the point of view of welfare economics?

 

III.

  1. Explain by means of a diagram the formation of the wage-rate under conditions of monopsony in the labor market. What is the relation of the wage rate to the value of the marginal product of labor?
  2. Explain and discuss critically the concepts of “monopolistic exploitation” and of “monopsonistic exploitation” of labor
  3. Give a diagrammatic account of the effects of trade-unionism (with uniform wage-rates) and of control of monopoly upon the demand for labor by a firm (or industry).
  4. Indicate on the diagram the wage-rate you would impose if you were a government arbitrator. Discussed her decision in terms of (a) the level of employment, (b) the principles of welfare economics, (c) social justice (indicate your criteria of “justice”).

 

IV.

  1. Discuss the fundamental difficulty of the theory of oligopoly and explain how it is solved in (a) Chamberlin’s theory of monopolistic competition, (b) on the basis of rules of group behavior endowed with the dignity of ethical norms
  2. Discuss the significance of the kinked demand curve sub (1b) with regard to (a) price rigidity, (b) the functional distribution of incomes

 

V.

Discuss by means of a diagram the case of “service competition” between oligopolistic firms bound by a price agreement. Show (a) how the output of a firm is determined in this case and (b) the difference between this case and that of atomistic competition.

 

_________________________

 

ECONOMICS 307
December, 1944

I.

Describe Chamberlin’s theory of monopolistic competition and explain:

  1. the “excess capacity” obtaining when the firm and the group are both in equilibrium; distinguish between short and long-period “excess capacity”; which of the two presents a waste of resources from the social point of view and why.
  2. What assumptions about other firms’ reactions are made in Chamberlin’s theory.
  3. What criticisms can be made of Chamberlin’s theory.

 

II.

  1. Explain by means of a diagram the formation of the wage-rate under conditions of monopsony in the labor market. What is the relation of the wage rate to the value of the marginal product of labor?
  2. Explain and discuss critically the concept of “monopolistic exploitation” and of “monopsonistic exploitation” of labor.
  3. Give a diagrammatic account of the effects of trade-unionism (with uniform wage-rates) upon the demand for labor by a firm (or industry).
  4. Indicate on the diagram the wage-rate you would impose if you were a government arbitrator. Discuss your decision in terms of (a) the level of employment, (b) the principles of welfare economics, (c) social justice. (indicate your criteria of “justice”).

 

III.

Explain the reasons which lead under oligopoly to formation of a conventional price and state:

  1. Why is the demand curve likely to have a “kink” at the level of the conventional price;
  2. What is the shape of the marginal revenue curve in this case;
  3. Within what limits will a shift of the marginal cost curve leave price and output unaffected (illustrated by diagram);
  4. What bearing has this upon the problem of trade-unionism and wage-fixing.

 

IV.

“Total output is maximized when the ratios of the marginal productivities of any two factors are the same in each industry.”

  1. Explain what is meant in this context by “total output being maximized.”
  2. Give a simple numerical illustration of the theorem.

 

Source: University of Chicago Archives. Norman M. Kaplan Papers, Box 2, Folder 7.

Image Source:  Oskar Lange monument at Wroclaw University of Economics. Wikimedia Commons.

Categories
Courses Harvard Syllabus

Harvard. International Trade, Finance & Policy. Haberler, 1949-51

 

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the list of “artifacts” from the history of economics I have already assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment below….

______________________

Gottfried Haberler’s two term Harvard graduate course sequence in International Economics at mid-century was divided along Theory vs. Policy lines as opposed to the (real) Trade & Commercial Policy vs. (monetary) International Finance & Exchange used in current textbooks.

I have taken the liberty of combining the Fall term in 1949 with the Spring term of 1951 for which I have the reading lists. I could not find the latter at Harvard, but spotted a copy in Milton Friedman’s papers in a folder for other people’s syllabi.

_______________________________

 

 

[Economics 243a International Trade. Enrollment, Fall Term 1949]

Total 36:   23 graduates, 1 senior, 12 other (of which 1 MIT, 4 Radcliffe).

 

Source: Harvard University. Report of the President of Harvard College and reports of departments, 1949-1950, p. 75.

__________________________

Economics 243a
Professor Haberler – Fall Term, 1949

During the first half year, the theory of international trade, including the theory of tariffs and other international trade policies, will be discussed in a systematic fashion. The subject of the spring term will be selected topics in the field of international economic relations.

Outline for First Half-Year

  1. International trade and national income. The importance of trade for various countries. Measures of importance.
  2. International accounts. International transactions of the national economic budgets.
  3. Foreign exchanges. Demand and supply for exports and imports. The market for foreign currency. Purchasing power parity theories.
  4. The balance of payments mechanism. Price effects, income effects, the foreign trade multiplier. The transfer problem.
  5. The international division of labor. The theory of comparative cost. Modern developments of the theory of comparative cost. Ohlin’s general equilibrium theory of interregional and international trade.
  6. The welfare implications of international trade theory. The theory of tariffs and protection in general. Monopoly and monopolistic competition in international trade.
  7. International trade theory and location theory.

 

Reading Assignments and Suggestions
General

The literature in the subject is so rich that students can acquire the knowledge necessary for the course in many different ways. Students are invited to make their own choice from the suggestions below. Two extensive bibliographies have been prepared in former terms for other courses. One may be obtained from Ms. Buller, Littauer 322; the other from Professor Williams’ secretary, Littauer 231. Each student is expected to have read one or the other of the following general monographs or texts:

Ellsworth: International Economics
Enke and Salera: International Economics
Haberler: Theory of International Trade
Harris (Editor): Foreign Economic Policy for the U.S. (especially Part V)
Harrod: International Economics (3rd edition, 1939)
Marshall: Money, Credit, and Commerce, (Part III and Appendix g)
Meade and Hitch: Introduction to Economic Analysis and Policy (Part III)
An excellent discussion of recent developments will be found in: Metzler: “The Theory of International Trade,” Chapter. 6, Survey of Contemporary Economics (1948)
Readings in the Theory of International Trade contains an excellent collection of articles on all phases of the course
Taussig: International Trade (1927)
Tinbergen: International Economic Cooperation (1945)
Whale: International Trade

Assignments and Suggestions to Subjects Listed Above

(in addition to relevant chapters in general texts)

  1. The Post-War Foreign Economic Policy of the United States. 6th Report of the House Special Committee on Post-War Economic Policy and Planning. House Report No. 541. Washington, 1945. (This report was written by Lloyd Metzler.)
    The United States in the World Economy, U. S. Department of Commerce, 1943.
    Buchanan and Lutz: Rebuilding the World Economy (1947)
    J. Brown: Industrialization and Trade (1943)
    A. J. Brown: Applied Economics (1948), Ch. VI
    Readings, Chs. 21 and 22, by D. H. Robertson and J. Finder
  2. Balance of Payments Yearbook, 1938-1941-1947 (International Monetary Fund)
    Hicks: The Social Framework of the American Economy, Ch. XII, “Foreign and National Income”
    The Survey of Current Business (monthly publication of Dep. of Commerce) has frequent articles on trade and balance of payments statistics.
    The United States in the World Economy (U.S. Department. of Commerce, 1943)
  3. Nurkse: International Currency Experience (League of Nations, 1944)
    J. Robinson: “Foreign Exchanges,” Essays on the Theory of Employment (1st ed., 1938; 2nd ed., 1947), Part III; reprinted in Readings, Chapter 4.
    J. Robinson: “Beggar-My-Neighbor Remedies for Unemployment,” Readings, Ch. 17.
    Machlup: “The Theory of Foreign Exchanges,” Economica, 1939 (two articles); Readings, Ch. 5.
    Pigou: “The Foreign Exchanges,” Quarterly Journal of Economics, November, 1922, Reprinted in Essays in Applied Economics (1927)
    Metzler: op. cit.
    Harris (Editor): Foreign Economic Policy for the U. S., Part V, Chs. 20, 21, 22.
  4. Keynes and Ohlin on German Reparations in Economic Journal, 1929; and Readings, Chs. 6 and 7.
    Iversen: International Capital Movements, 1935.
    Machlup: International Trade and the National Income Multiplier (1943)
    Harris (Editor): The New Economics, Part V, especially essays by Bloomfield and Nurkse.
    Williams: Post-War Monetary Plans and Other Essays (3rd edition, 1947).
  5. In addition to general texts, see:
    Edgeworth: Papers Relating to Political Economy, Vol. II, p. 3-60.
    Ellsworth: “A Comparison of International Trade Theories,” American Economic Review, June, 1940.
    Leontief: “The Use of Indifference Curves in the Analysis of Foreign Trade,” Quarterly Journal of Economics, May, 1933; Readings, Ch. 10.
    Mill: Principles
    Ohlin: op. cit. Parts I, II, and possibly III.
    Readings, Chs. 12, 13, 15, by J. H. Williams, E. Heckscher, and W. Stolper and P. Samuelson
    Ricardo: Principles
    Taussig: International Trade
    Viner: Studies in the Theory of International Trade (last two chapters)
  6. Samuelson: “The Gains from Trade,” Readings, Ch. 11.
    Scitovszky: “A Reconsideration of the Theory of Tariffs,” Readings, Ch. 16.
    Henderson: “The Restriction of Foreign Trade,” in The Manchester School of Economic and Social Studies, Volume 14, January, 1949.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1). Box 5, Folder “Economics 1949-1950, 3 of 3”.

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1950-51
Economics 243b
Spring Term—Professor Haberler

International Economic Policy

with special emphasis on the theoretical foundations

  1. Introduction
    Theory and Policy
    Aims of Economic Policy
    International Trade, Economic Welfare and National Income
    International Trade and Employment
    The Quantitative Importance of International Trade
  2. Brief Sketch of the Historical Evolution of Theory of International Trade and International Economic Policy
    Pre-Mercantilist Views
    Mercantilism
    Classical Liberalism
    Reaction to Liberalism: Historical School
    From the Repeal of the Corn Law to 1914
    The Interwar Period
    –The 1920’s
    –The 1930’s
    Recent developments
    The Rise of Socialism and Planning and their Impact on Trade Policy
  3. Free Trade and Protection: A Theoretical Analysis
    The Case for Free Trade: The Theory of Comparative Cost
    Arguments for Protection: “Economic” vs. “Non-economic” Arguments
    Infant Industry Argument: Problems of Economic Development
    Terms of Trade: Monopoly and Monopolistic Competition in International Trade
    Trade Policy and Unemployment
  4. Balance of Payments, the Exchange Rate and International Monetary Policy
    The International Accounts
    –Balance of Payments and National Economic Budget
    Stable Exchanges
    –Gold Standard
    –Gold Exchange Standard
    Currency Depreciation
    –Demand and Supply for Exports and Imports
    –Market for Foreign Exchange
    –Stability Conditions
    The Transfer Problem
    Dollar Shortage
  5. Quantitative Restrictions
    Quotas
    Exchange Control
  6. Most-Favored-Nation Principle, Discrimination and the Economics of Regional Blocs
    Preferential Tariffs
    Customs Unions
    Economic Unions
    Monetary, Clearing and Payments Unions

 

Literature

General Treatises and Historical

  1. Descriptive and Historical
    Brown: Industrialization and Trade (1943)
    Buchanan and Lutz: Rebuilding the World Economy (1947)
    Condliffe: The Commerce of Nations (1950)
    League of Nations: The Network of World Trade (1942)
  2. Theoretical
    Ellsworth: International Economics (1938)
    Ellsworth: The International Economy (1950)
    Haberler: Theory of International Trade
    Harrod: International Economics (1938)
    Metzler “Theory of International Trade” in Survey of Contemporary Economics
    Ohlin: Interregional and International Trade
    Taussig: International Trade
    Marshall: Money, Credit, and Commerce
    Meade and Hitch: Introduction to Economic Analysis and Policy (Part V)
    J. S. Mill: Principles, Book III, Ch. 17, 18, 20, 21; Book V, Ch. 4 (reprinted in Selected Readings)
    Enke and Salera: International Economics
    Ellis and Metzler: Readings in the Theory of International Trade (quoted as “Readings”)
    Taussig (Editor): Selected Readings in International Trade and Tariff Problems (quoted as “Selected Readings”)
    Viner: Studies in the Theory of International Trade
    Williams: Postwar Monetary Problems and Other Essays

Reading for Individual Sections of Outline

  1. No specific reading.
  2. No specific reading.
  3. Practically all theoretical texts mentioned above. See especially:
    Ellsworth
    Haberler
    Readings: Chs. 10, 11, 15, 16
    Selected Readings, Chs. 1, 2, 9
    In addition: Haberler: “Some Problems in the Pure Theory of International Trade,” Economic Journal, June, 1950.
    A. Henderson: “The Restriction of Foreign Trade,” in The Manchester School of Economic and Social Studies, Vol. 14, January 1949.
    J.E. Meade: “A Geometrical Representation of Balance of Payments Policy,” Economica, November 1949.
    John Robinson: “The Pure Theory of International trade,” Review of Economic Studies, Vol. XIV, 1946-47.
    J.S. Mill, Principles.
  4. Balogh: Dollar Crisis (1949)
    Ellis: The Economics of Freedom
    Ellis: The Progress and Future of Aid to Euorpe (1950)
    Kindleberger: Dollar Shortage (1950)
    Harris: Foreign Economic Policy of the U.S., Part V. Essays by Haberler, Samuelson
    Harris: (Editor) The New Economics, Part V, especially the essays by Bloomfield and Nurkse
    Hicks: The Social Framework, Ch. 12.
    Metzler’s article in Survey.
    Nurkse: International Currency Experience, League of Nations, 1944.
    Readings, Chs. 4, 5, 6, 7, 17.
    Williams, op.cit.

 

Source: The Hoover Institution Archives. Milton Friedman Papers, Box 80, Folder 80.8 “Syllabi by others”.

Categories
Economists Exam Questions M.I.T.

MIT. Final Exam in Graduate Macro I. Stanley Fischer, 1975

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the list of “artifacts” from the history of economics I have already assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment below….

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Today another posting from the more recent history of economics for that professor who succeeded where others had failed before him, namely in first teaching me the economic intuition behind macroeconomic models, Stanley Fischer. While James Tobin had succeeded in convincing the undergraduate me of the utter importance of getting macroeconomic policy right, I was still much too immature to “receive wisdom” as a sophomore…but enough about me.

I thought of Stan Fisher this morning as I read his marvelous summary of his own 55 years of experience with macroeconomics.

I earlier posted Fischer’s reading list for his undergraduate course at the University of Chicago in 1973. Below is the exam from the first half-semester course in the required four quarter sequence in macroeconomics for the cohort that entered MIT in the Fall of 1974, the cohort that included Paul Krugman, Jeffrey Frankel, Francesco Giavazzi, Andrew Abel, Dick Startz, to name only a few, sandwiched between Olivier Blanchard’s and Ben Bernanke’s respective cohorts.

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Spring 1975

Final Exam 14.451

Stanley Fischer

Time available is two hours. Answer all questions. You have a choice on question 2.

  1. (50 points) it is sometimes asserted that the key to the effectiveness of monetary policy is the fixed nominal return on money. Suppose that means were devised of paying interest on money and that the nominal bond interest rate were fixed in an arbitrary level.
    1. Using any convenient variant of a three asset (money, bonds, capital) model, explain the determination of asset market equilibrium and then of the overall equilibrium of the economy, under the assumption of a fixed bond interest and a rate market-determined money interest rate. (Maintain this assumption here after.)
    2. Analyze the consequences of an open market purchase for the interest rate on money and other endogenous variables. What are the differences between your results and those in the more usual model in which the bond interest rate varies?
    3. Suppose a helicopter dropped bonds on the populace. What happens to the interest rate on money and other endogenous variables?
    4. What do you make of the assertion mentioned in the first sentence of this question in the light of your answers to (ii) and (iii) and/or in the light of any other relevant considerations?
    5. Extra credit (5 points max). Can you envision any type of institutional arrangements which make the premise of this question — fixed bond interest rate and market determined interest rate on money — empirically reasonable?

 

  1. Answer A or B (30 points each)

A.

  1. What theoretical reasons are there to assume the demand for money is a function of the interest rate?
  2. Why does it matter?
  3. Review relevant empirical evidence.
  4. Discuss any econometric difficulties of the empirical work.

 

B.

A household has the utility of wealth function

U(W) = W (b/2)W2.

Its initial wealth is W0.
It can hold in its portfolio a safe asset paying a safe rate of return of our rB in the risky asset paying rE+g, where rE is the expected return and sg2 is the variance of return.

    1. Derive demand functions as a function of rB, rE, sg2, and W0.
    2. Suppose that a tax on next period’s wealth is announced, at rate t, i.e. t% of wealth at the beginning of next period will be paid to the government. What effect does this have on the asset demands? Can you give an intuitive explanation?
    3. Suppose instead that positive returns on the risky assets are taxed at a rate t, but not negative returns. Thus if A2 is the holding of the risky asset, the tax is tA2(rE + g) if rE +g > 0 and zero otherwise. The return on the safe asset is not taxed. What effect does this have on asset demands?

 

  1. (20 points)
      1. Define free reserves.
      2. Define excess reserves.
      3. What effect would Federal Reserve System payment of interest on reserves held at FR banks have on the demand for reserves? (Use any appropriate model, and assumed the rate on reserves as fixed below the rate on short-term government securities and the discount rate.)
      4. What effect would these interest payments have on the money multiplier? (For simplicity, assume there is only one type of deposit in existence.)
      5. It is sometimes said that payment of interest on reserves would strengthen Fed control over the money stock. Can you justify or refute this view?

 

Source: Irwin Collier.

Image Source: MIT Museum.