Category: Chicago

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Chicago Funny Business Harvard M.I.T. Princeton

M.I.T. Faculty Skit, Playing Monopoly at Lunch, 1986

 

It has been a while since I have added an artifact to the MIT economics skits wing of the Funny Business Archives here at Economics in the Rear-view Mirror. Apparently the following script was a, if not the sole, late-20th century MIT faculty skit not written by Robert Solow. I can believe that. In any event, today’s post is further grist to the mill for social historians of economics.

Again a grateful tip of the hat to Roger Backhouse is in order.

__________________

1986 FACULTY SKIT

(Skit opens with Dornbusch, Fischer, Diamond, Eckaus and McFadden seated around MONOPOLY board. Farber is standing alongside, watching the game. Fisher and Hausman are in the wings to make walk-on appearances).

ANNOUNCER: One of the most important unwritten rules in the Economics Department is that no one but Bob Solow writes the skit. This year, Bob reportedly outdid himself and wrote a sitcom in which Bob Lucas is struck by a blinding light while driving to work and transformed into a neo-Keynesian. The skit, titled “I’m OK, You’re OK,” follows Lucas’ attempts to explain why he is estimating Phillips curves to Lars Hansen and Tom Sargent.

Unfortunately, Bob is unable to be with us tonight, since he is delivering the presidential address to the Eastern Economic Association in Philadelphia. When we opened the envelope marked “SKIT” which Bob left for us, we were surprised to discover only a copy of his presidential address. We suspect he had a somewhat bigger surprise when he opened his envelope in Philadelphia. [Address published as “What is a Nice Girl Like You Doing in a Place Like This? Macroeconomics after Fifty Years” Eastern Economic Journal, July-September 1986]

We were of course scared skitless when we realized our predicament, and we were tempted to re-run some of the great Solow skits of the past. There was the 1974 Watergate Skit, in which Paul Colson Joskow testifies to Senator Sam Peltzman that he would run over his grandmother to get a t-statistic above two. There was the 1978 Star Wars skit, in which Milton Vader and his minions capture the wookie Jerrybaca and hold him captive in the Chicago Money Workshop. And in the incredible 1973 MASH skit, Hawkeye Hall and Trapper Jerry Hausman find Radar Diamond and Hot Lips Friedlaender cavorting in the Chairman’s office. (If that doesn’t give Solow Rational expectations, what does?)

We guessed that you had all seen these re-runs on late-nite channel 56, however, and therefore decided to try something new and provide a partial answer to the age-old question: What Really Goes On in the Freeman Room at Lunchtime on Wednesdays? We now invite you to join us for a brief look at one of these infamous gatherings…

 

MCFADDEN: (Rolling dice). “Who owns Oriental Avenue?”

DORNBUSCH: Me. That’s six dollars.

FISCHER: My turn? (Rolls dice). Damn. Inflation tax again; Here’s ten percent of my cash balances. I passed go, didn’t I?

DIAMOND: Uh huh. Here’s $186 dollars.

FISCHER: I should get $200.

DIAMOND: Not since Gramm-Rudman. Everything’s reduced seven percent across the board.

DORNBUSCH: My turn. (Rolling dice). Four. (Reaches over and moves marker).

ECKAUS: No way, Rudi—you just moved six places. No overshooting in this game. (Hands Dornbusch Chance card)

DORNBUSCH: Ah. Go directly to Brazil. Do not return until the day classes start.

HAUSMAN: (Walking in from side of stage) How come you guys are playing MONOPOLY? I thought you usually played RISK…

DIAMOND: Oliver [Hart] took that game home. You know, his contract calls for RISK-sharing…

HAUSMAN: Can you believe the graduate students scheduled the skit party for the Friday before income taxes are due? The only people who’ll come are graduate students and people like theorists who file 1040 EZ’s. (walks off)

(FISHER walks in)

DIAMOND: (Rolling dice). My turn. Oriental again. Six more dollars for Dornbusch.

FISCHER: That’s a pretty profitable property, Rudi.

FISHER: How many times do I have to say it! You can’t possibly tell that from accounting numbers! (Pause). Why don’t we ever play fun games, like Consultant?

ECKAUS: I hear Jorgensen and Griliches play that all the time up at Harvard. Maybe you should give them a call.

FISHER: They’re never around.

DIAMOND: Of course not, Frank—that’s how you play consultant.

(FISHER exits.)

FARBER: Speaking of Harvard, how are we doing on graduate recruitment this year? I heard there was some Princeton scandal.

DIAMOND: The AEA put them on probation for recruiting violations. People could look the other way when they offered prospective students money and cars, but this year Joe Stiglitz promised to write a joint paper with all entering students.

FARBER: They’re really giving out cars?

DIAMOND: Sure. Yugo’s.

FARBER: All I got was a motorcycle…

MCFADDEN: Harvard and Princeton have been dumping all over us. Every prospective student has heard that Jerry Hausman cashed in his Frequent Flyer miles for a 727. And some even know that Marty Weitzman has a Harvard offer.

FISCHER: Well, that offer was certainly no surprise. The Harvard deans read THE SHARE ECONOMY and decided they should hire more workers.

DIAMOND: Still, we’re getting the best students. This morning I signed a Yale undergrad by offering him Solow’s office. I figured Bob can share E52-390 with Krugman, Eckaus, and Farber next year. But what happens when we run out of river-view offices?

FARBER: How’s Harvard doing on recruiting?

ECKAUS: Not too well. They’re on a big kick to look relevant. Mas-Collel’s going nuts—Dean Spence has a new rule that any agent in a theoretical model has to have a proper name. Andreu’s having real problems with his continuum papers…

MCFADDEN: I hear the Kennedy School’s helping their visibility. Have you heard about the new Meese Distinguished Service Medal?

DIAMOND: No. Who’s getting them?

MCFADDEN: Sammy Stewart for Distinguished Relief Pitching,
Martin Feldstein for Distinguished Empirical Work,
Larry Summers for Distinguished Dress,
NASA for distinction in Travel Safety,
Bob Lucas and Bob Barro for Distinguished Plausible Assumptions,
Ferdinand Marcos for Distinguished Contributions to Charity,
and John Kenneth Galbraith for Distinguished Use of Mathematics.

DORNBUSCH: Harvard’s visibility campaign’s paying off. Just last week one of their junior guys hit the cover of PEOPLE magazine with a paper about marriage rates among movie stars.

FISCHER: You read PEOPLE?

FARBER: The National Enquirer had a story about a Harvard student who claimed to have a picture of Jeff Sachs in Littauer. Just like the old days with Howard Hughes…

DORNBUSCH: Perhaps we should return to the game.

(MODIGLIANI walks on).

DIAMOND: My turn again? (Rolls dice and moves piece). Community Chest. (Looking at card) You are elected department head. Lose three turns.

(Someone walks up and hands DIAMOND a telephone message. He stands up.)

DIAMOND: I nearly forgot. I’m scheduled to join Mike Weisbach who is taking a prospective student windsurfing this afternoon. Figured it was the least I could do to convince him we were as laid back as Stanford. Franco—do you want to take my place?

MODIGLIANI: (Sitting down in Diamond’s place) So, what are the new developments on the Monopoly front? [Famous Modigliani paper “New Developments on the Oligopoly Front,” JPE, June 1958] (Pause) Now, which of these pieces is Peter’s?

MCFADDEN: The coconut. [Reference here to Diamond’s coconut model of a search economy.]

MODIGLIANI: My turn now?

FISCHER: No Franco—but go ahead. [presumably a reference to Modigliani’s propensity to talk, and talk, and talk.]

MODIGLIANI: (Rolls dice and moves marker). Chance. (McFadden hands him a card). What is this? You have won second prize in a Beauty Contest, Collect $10? This is NOT POSSIBLE. This year I win only FIRST PRIZES [reference to 1985 Nobel Prize for Economics].

DORNBUSCH: (To audience) Wait till he gets the bequest card… [cf. the JEP Spring 1988 paper by Modigliani that surveys the bequest motive]

FISCHER: Franco, I have a deal for you. I’ll trade you Mediterranean and the Water Works for North Carolina and an agreement that you never charge me rent on either property. If you renege, I’ll order Chinese food.

MODIGLIANI: No deal. But what’s this about Chinese food?

FISCHER: It’s a new thing I learned from Garth [Soloner]—it makes the deal sub-gum perfect.

MCFADDEN: My turn. (Rolls and draws a Chance card). My favorite card: Advance Token to the Railroad with the Highest Logit Probability Value. Let me see which one that is… (pulls out a calculator)

FISCHER: While we’re waiting for Dan to converge, how did we do in junior hiring? Did we get that Princeton theorist?

ECKAUS: No dice. All the Princeton guys told him not to come.

DORNBUSCH: Why?

ECKAUS: They said “Go to Yale, go directly to Yale.”

MODIGLIANI: What about senior appointments?

FARBER: Ask Peter [Temin]. He’s on the Search Committee.

MCFADDEN: (Looking up from calculator). I’m having convergence problems. Maybe we should postpone the game for a few minutes while I run down to the PRIME.

[the image of the last page at my disposal is very blurred, fortunately it is only the wrap-up by the announcer]

ANNOUNCER: As you all know, NOTHING takes a few minutes on the PRIME. So until next year, when the [?] [?] Solow who accompanied Stan, 3PO and R2D2 to [?] the [?] [?] from Chicago returns to produce another skit. Good night.

 

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Robert M. Solow, Box 83.

Categories
Chicago Economics Programs Faculty Regulations

Chicago. Economics A.M. requirements amended to become “Consolation Prize”. Lewis and Schultz, 1950

 

In 1950 the Chicago economics department voted to convert its master’s degree into an award for the successful partial completion of its Ph.D. program. It was to serve as a “consolation prize” for good graduate students but those found not to have the right “Ph.D. stuff” (H. Gregg Lewis’ words in his memo of Sept. 29, 1950 to chairman T. W. Schultz, transcribed below). I have also included the relevant portion of the distributional and examination requirements for the Ph.D. that had already formed part of the so-called “alternate departmental master’s degree”. H. Gregg Lewis’ proposal was largely accepted by the department (minutes from the meeting of November 2, 1950 transcribed below), thereby eliminating distinct tracks for its A.M. and Ph.D. degree programs, respectively.

_______________________

ALTERNATIVE DEPARTMENTAL MASTER’S DEGREE
[1950-51 regulations]

Upon request the Department will consider recommending for the Master’s degree candidates who have satisfied the distribution requirement for the Ph.D. degree and have passed with satisfactory standing the three written field examinations for the Ph.D. degree. One modern foreign language is required. In place of a thesis such candidates may present an acceptable paper or report on a problem approved by the Department.

[…]

Distributional requirement [Ph.D.]. The candidate is expected to have familiarity with the subject matter equivalent to that covered in at least one course (200 or 300 level of reasonable comprehensivenss in each of ten fields (five required and five elected), satisfactory evidence of which can be provided by course credit or by passing a special examination. The required fields are: (a) economic theory, (b) accounting, (c) statistics, (d) economic history, and (e) money, banking, and monetary policy. The fields from which five may be elected are: (f) consumption economics, (g) industrial relations, (h) monopoly and public utilities, (i) agricultural economics, (j) government finance, (k) international economic relations, and (l) substitute fields, but not in excess of two, proposed by the candidate and approved by the Departmental counselor or the Department. One or both of these substitute fields may be outside the Department of Economics, and in general some work outside the Department is recommended with a view to rounding out a program appropriate for the individual student. In case of students transferring from other institutions, adequate training in general history may be substituted for economic history upon the written recommendation of the Departmental counselor.

Preliminary written field examinations [Ph.D.]. In each of three fields of specialization, in addition to presenting course credit or special examinations to show satisfactory preparation, the candidate will be required to pass a written examination.

The candidate is expected to select the three fields of specialization—a primary field and two secondary fields—for intensive graduate work. The primary field is that in which the [Ph.D.] thesis will be written. One of the three fields (primary or secondary) must be that of economic theory, including monetary theory. The fields from which selection is to be made are listed above under the heading “Distributional Requirement,” except that accounting may not be chosen as a field without approval of the Department. One secondary field of specialization may be a field named by the candidate outside the list above, and this may be in a department other than Economics. A secondary field may also be developed under one of the interdepartmental committees of specialization International Relations, Human Development, Planning or Social Thought. The program of work proposed, which ordinarily will include four to five courses, must be approved by the Department. No other secondary field may replace the required field in economic theory.* Students should consult with the Departmental counselor with respect to appropriate programs of work in preparation for the field examinations. The field examinations are given by the Department in the sixth and seventh weeks of the Winter and summer quarters. Application for any field examination should be made not later than the end of the first week of the quarter in which the examination is to be taken.

*Students who take the field examination in money, banking, and monetary policy will not be required to write the monetary theory part of the economic theory examination.

 

Source: University of Chicago, Announcements. The Division of the Social Sciences, Sessions of 1950-1951, Vol. L, Number 9 (July 20, 1950), pp. 25-26.

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ECONOMIC COURSES LISTED IN THE LEWIS MEMO (29 Sept 1950) AND INCLUDED IN THE DEPARTMENTAL MINUTES (2 Nov 1950)

209. Intermediate Economic Theory. (Procter Thomson/Harold Gregg Lewis) Designed for students majoring in economics. Deals with factors controlling production, value and relative prices, and distribution.

211. Introduction to Statistics. (Harold Gregg Lewis) Elementary principles of statistics. Main topics: frequency distributions, averages, dispersion, index numbers, elements of the theory of statistical inference.

220. Economic History of the United States. (Earl J. Hamilton) Facts and factors in American’s economic growth from the Colonial period to World War II, including the development of agriculture, industry, commerce, finance, and transportation; economic effects of wars; role of the entrepreneur; rise in living standards; unrest and utopias in periods of stagnation; commercial crises and economic basis of cultural progress.

222. The Rise of Industrial Civilization in Europe. (John Ulrich Nef) Economic development in its relation to religious, political, intellectual and artistic history since the seventeenth century.

230. Introduction to Money and Banking. (Milton Friedman/Lloyd Wynn Mints) Factors which determine the value of money in the short and in the long run; and operation of the commercial banking system and in relation to the price level and general business activity.

240. Introduction to Industrial Relations. (Albert E. Rees) The nature of the labor market; government regulation of wages; social security; the history, structure, and functions of American labor unions; and collective bargaining. Special attention is given to current problems of public policy.

255. Introduction to Agricultural Economics. (D. Gale Johnson). Nature of resources used in agriculture. Prices, production, resource allocation, and income distribution. Analysis of government programs, subsidies, storages, crop control, soil conservation, food-stamp plan.

260. Introduction to Government Finance. (Richard B. Goode) Survey of institutions and theories of government finance. Effects of public expenditures; functions of public revenue; forms of taxation; tax criteria; determination of tax policy; public borrowing; debt management; fiscal policy.

270. International Economics. (Bert F. Hoselitz) The nature of international payments and receipts; foreign trade and banking system. The gold standard in the interwar period. The breakdown of the gold standard and the period of fluctuating exchange rates. Exchange controls, clearing agreements and payments agreements. The second world war and the foreign exchange markets. The position of the International Monetary Fund and the International Bank for Reconstruction and Development in the present world economy.

271. Economic Aspects of International Politics. (Bert F. Hoselitz) An introductory survey, with particular reference to the United States, of the economic policies and activities of governments. Topics: international specialization of production and the distribution of world resources, structure of international exchanges and the mechanism of international transfer of goods and services; tariffs and other regulatory measures; trade agreements and the most-favored nation clause; international flow of capital and investment; the position of the ITO, the IMF, the ECA and other official agencies in international trade and exchange.

300A, 300B. Price Theory. (W. Allen Wallis 300A/Lloyd A. Metzler 300B/Milton Friedman 300B) A systematic study of the pricing of final products and factors of production under essentially stationary conditions. Covers both perfect competition and such imperfectly competitive conditions as monopolistic competition, oligopoly, and monopoly. 300A deals primarily with the pricing of final products; 300B, with the pricing of factors of production.

Source: University of Chicago, Announcements. The Division of the Social Sciences, Sessions of 1950-1951, Vol. L, Number 9 (July 20, 1950), pp. 27-28.

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THE UNIVERSITY OF CHICAGO

September 29, 1950

To        T. W. Schultz

From   H.G. Lewis

In Re: Requirements for the Master’s Degree

This is an elaboration of comments made to you this summer concerning the Master’s degree.

I should like to recommend the following changes in our requirements for the A.M. degree:

  1. That the distinction between the “regular” A.M. and the “alternative” A.M. be abolished.
  2. That the departmental requirements for the A.M degree consist of the following alteration of the present alternative A.M. requirements:
    1. A distribution requirement covering five (rather than the present eight) fields of economics of which theory, statistics, and money and banking shall be mandatory. Students who do not hold the traditional A.B. degree must meet the requirement by passing satisfactorily a qualifying examination coving the subject matter of Economics 209, 211 (unless the student has passed the Divisional qualifying examination), 230, and two courses chose from 220, 222, 240, 255, 260, 270, 271.1/ Students holding the traditional A.B. may meet the requirement by showing equivalent course credit.
    2. The passing of two Ph.D. field examinations (with Part I of the Theory exam counting as a full exam) at a satisfactory level (that is, at either the Ph.D. level or at a level somewhat lower but not so low as not to warrant blessing the candidate with a Master’s degree).2/
    3. A showing of competence in economic principles; made either by passing (at the A.M. level or higher) Part I of the Theory examination, by course credits or course examinations in Economics 300A and 300B, or by equivalent course credit.

I would recommend that the changes in requirements become effective as of the beginning of the Summer Quarter, 1951 for students entering the Department in that and later quarters.

1/ This qualifying examination is now offered every quarter. This is an extravagant use of faculty. I should like to see the exam offered only once a year. Furthermore, I should like to permit students to substitute course grades for all or part of the exam provided the course grades are for courses taken here and provided they are not at a level lower than B.

2/ There would be therefore no special examinations for A.M.’s, but the examinations would be graded into three levels: passing for the Ph.D. and A.M. degrees, passing for the A.M. degree but not for the Ph.D., failing for both.

I would urge students to give requirement (b) high priority in preparing their programs of study.

Since the ends sought by these changes can be reached in other ways, I specify below what these ends are.

I view our principal instructional purpose as that of training high-level (Ph.D. and beyond) professional economists. I think we ought to view our training of “junior” economists and the awarding of the A.M. degree only as an incident arising from the fact that at the time a student applies for admission to the department, we cannot predict accurately either his calibre as a student or his academic goals.

It seems to me that the requirements for the Master’s degree should meet these tests:

  1. They should include no requirements which the Department would not make for the Ph.D. degree. Otherwise both student and faculty time will be spent in activities extraneous to the training of high-level economists. The present alternative A.M. meets this test but the regular A.M. does not.
  2. The requirements should be at a level high enough to be respected by the academic world. Both present degrees meet this test, I believe.
  3. But the standards for the degree should not be so high that potentially able Ph.D. candidates will be deterred from entering because of the considerable risk that if they fail to meet Ph.D. standards they will also fail to meet A.M. standards. If we set standards for the A.M. that are almost as likely not to be met as the Ph.D. standards we hold out no “consolation prize” to those good students who are fearful of not being able to meet Ph.D. standards. The present alternative A.M. requirements do not meet this test.

One of the ways by which we can raise the calibre of our Ph.D. candidates without reducing our enrollment is to increase the number of students who are given an opportunity to show at close hand their potentialities to us and to screen out at an earlier date those who are not of Ph.D. stuff. I am confident that quite accurate screening can take place ordinarily by the end of the first year of graduate residence. I contemplate our using the A.M. requirements as a screening device; the present alternative A.M. is not satisfactory from that point of view since it postpones too long the screening decision.

Source: University of Chicago Archives. Department of Economics Records. Box 41, Folder “41.8”.

_______________________

MINUTES
Meeting of the Department

Time and Place: Thursday, November 2, 1950, at 1:00 p.m. in Room 424, Social Science Research Building.

Present: T. W. Schultz (chairman), H. G. Lewis, A. Rees, R. Goode, G. Tolley, D. G. Johnson, F. H. Harbison, J. Marschak, C. Hildreth, F. Knight, L. Metzler.

  1. Handling of Student Business
    It was agreed that all bona fide applications for admission to candidacy filed this quarter would be considered as falling under present degree requirements even though Departmental action does not take place until Winter quarter.
  2. Ford Foundation
    Schultz stated that as a Department we have an obligation to ourselves, to the University, and to the community more largely to think through carefully the problem of making the best use of the Ford Foundation’s present grant of $300,000 to the University as well as possible later grants. There was a brief general discussion of the problem.
  3. Departmental Rules Governing Residence and Availability to Students
    Schultz pointed out that in the current year we have been able for the first time to reduce direct teaching loads for most of our members to four courses per year or less. This reduction, he pointed out, makes it desirable that the Department impose upon itself rules governing residence and availability to students and others in the university community lest they be imposed upon us from outside. The problem of rules for residence involves not only a rule stipulating in some way minimum residence, but also the question of whether “free” quarters out of residence should be considered a matter of a right accruing to an individual from his residence or a privilege dependent upon ad hoc decisions made by the Department chairman and the Dean. Schultz expressed himself as being in favor of a rule somewhat similar to the rules for accumulating sabbatical leave under a 3Q contract. In addition there is the problem of insuring, perhaps by rule, “availability” when in residence. The formulation of appropriate rules is to come before the Department for its consideration in the Winter quarter.
  4. The Department considered Lewis’ recommendations for changes in the A.M. requirements. (See attached memo. [above]) the following amendment of Lewis’ recommendation was passed:
    1. That the distinction between the regular A.M. and the “alternative” A.M. degrees be abolished.
    2. That the Departmental requirements for the A.M. degree consist of the following:
      1. A distribution requirement to be met by passing a “Qualifying” examination covering the subject matter of Economics 209, 211 (unless the student has passed the Divisional qualifying examination) 220 or 222, 230 and two courses chosen from 240, 255, 260, 270, and 271. Students holding the traditional A.B. may satisfy the requirement by equivalent course credit.
      2. The passing of two Ph.D. field examinations (with Part I of the Theory examination counting as an examination) at a satisfactory level of A.M. candidates.
      3. A showing of competence in economic principles; made either by (at the A.M. level or higher) Part I of the Theory examination, by course credits or examinations in Economics 300A and 300B, or by equivalent course credit.
      4. An acceptable paper or report on a problem approved by the Department. The paper will be read by two members of the Department of which the course instructor will be one in the event the student submits a term paper prepared for a course.

The above changes in requirements are to become effective as of the beginning of the Summer quarter, 1951 for students entering the Department in that and later quarters.

It was understood that the above motion in no way changes present preliminary examinations or other requirements for the Ph.D. degree. Professor Knight asked the minutes to show his objection to dropping Economics 210 (Accounting) from the requirements for the A.M. degree.

  1. Student Business
    1. Petitions

Lawrence Bostow’s petition for approval of French and Russian as languages for the Ph.D. was approved.

Mr. H. M. Herlihy’s petition for the field of “Social Organization” (Sociology Department) as his third field for the Ph.D. degree was approved.

Mr. John Holsen’s petition for a third Ph.D. field in Planning (Planning Department) was approved. Mr. Johnson, his counselor, was asked to inform Mr. Holsen, however, that this approval does not entitle Holsen to shorten his total program in Economics for the Ph.D.

Mr. Edward Mishan’s petition for approval of Spanish as a Ph.D. language was denied.

    1. Admission to Candidacy

Mr. Howard Ammerman’s application for admission and for approval of a thesis topic was moved to the bottom of the list of applications.

Mr. Rondo E. Cameron’s application for admission to candidacy for the Ph.D. degree was recommended to the Division for approval, contingent upon his passing the Theory examination (written Summer, 1950) and his proposed thesis topic, “French Foreign Investment, 1815-1870,” was approved. Thesis committee: E. J. Hamilton, chairman, L. Metzler, P. Thomson.

After some discussion, Mr. Clifford Clark’s application was moved down the list. Lewis was instructed to advise Clark to consult with Hamilton concerning the latter’s misgivings about the proposed thesis topic, and in addition to confer with Hayek, Knight, and other members of the Department concerning the thesis topic.

Mr. George P. Coutsoumaris’ application for admission to candidacy for the Ph.D. degree was recommended to the Division for approval, contingent on his passing the Theory examination (written Summer, 1950), and his proposed thesis topic, “Possibilities of Increasing Economic Efficiency in Greek Agriculture,” was given qualified approval, the Department suggesting that he limit the topic somewhat preferably to a topic approximately the same as that covered in the sections (VII and VIII) of his outline dealing with capital in Greek agriculture. Thesis committee: D. G. Johnson, chairman, C. Harris, J. Margolis (planning).

Mr. David Fand’s proposed thesis topic, “Monetary Theory of the Federal Reserve Board,” was discussed. It was agreed to come back to it at the next meeting after several more of the members of the Department had an opportunity to discuss the topic with Fand.

The meeting was adjourned at 3:05 p.m.

Source: University of Chicago Archives. Department of Economics Records. Box 41, Folder “41.8”.

Images:  University of Chicago Photographic Archive, H. Gregg Lewis [apf1-03861] and T. W. Schultz [apf1-07479], Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Berkeley Chicago Economists Michigan

Chicago. Oscar Lange appointment as assistant professor, 1938

 

Oscar Lange’s first appointment at the University of Chicago began July 1, 1938 at the rank of assistant professor for a term of three years. This post provides a transcription of the official form submitted to the University of Chicago administration by the economics department. The brevity of the form is rather striking to those of us 21st century academics for whom a paper trail is more like an infrastructure investment.

I have also appended some information from Lange’s declaration of intention and his petition for naturalization that he filed while on the Chicago faculty. The limp indicated for his right leg is no doubt related to the differing lengths of his two legs that was noted in his selective service registration (Feb. 16, 1942), “right leg is shorter than other one.”

__________________________________

The University of Chicago

(FOR POSITIONS ABOVE THAT OF ASSISTANT)
TO BE TRANSMITTED TO THE DEAN OF FACULTIES

Date: January 31, 1938

To the Dean of Faculties:

Division of the Social Sciences. Department Economics.

The promotion/appointment of Oskar Lange to the position of

Assistant Professor is recommended, at a salary of
Four Thousand dollars ($4,000.00) beginning
July 1, 1938 for a period of Three years.

Mr. Lange has the following academic record:

A.B. (or B.S. or Ph.B.) (college) [left blank]; (year) [left blank]
Ph.D. or other higher degree (institution) LL.D., Cracow; (year) [left blank]

Previous experience in teaching:

Lecturer and Privatdozent at Cracow and Polish Free University;
one semester at Michigan; one year at California

Publications:

Partial list attached

Qualities as investigator:

Excellent

Qualities as a teacher:

Excellent. At California and Michigan said to be very successful.

Qualities as an administrator:

No knowledge.

Personality:

Good

Provision for salary:

General budget.

[signed] H. A. Millis, Chairman or head of department

The above recommendation has also been considered by Dean [signed] Robert Redfield

Further comments by Dean of Faculties: [left blank]

[signed] Emery T. Filbey, Dean of Faculties

 

PARTIAL LIST OF LANGE’S PUBLICATIONS

“Die Preisdispersion als Mittel zur statistischen Messung wirtschaftlicher Gleichgewichtsstörungen,” Veröffentlichungen der Frankfurter Gesellschaft für Konjunkturforschung (Herausgegeben von Dr. Eugen Altschul, 1932, Neue Folge Heft 4), pp. 7-56.

“Die allgemeine Interdependenz der Wirtschaftsgrössen und die Isolierungsmethode,” Zeitschrift für Nationalökonomie, Band IV, Heft 1, 1932, pp. 52-78.

“The Determinateness of the Utility Function,” The Review of Economic Studies, Vol. 1 (1933-1934), pp. 218-225.

“A Note on the Determinateness of the Utility Function,” The Review of Economic Studies, Vol. II (1934-1935), pp. 75-78.

“Formen der Angebotsanpassung und wirtschaftliches Gleichgewicht,” Zeitschrift für Nationalökonomie, Band VI, Heft 3, 1935, pp. 358-65.

“Marxian Economics and Modern Economic Theory,” The Review of Economic Studies, Vol. II, No. 3, June, 1935, pp. 189-201.

“The Place of Interest in the Theory of Production,” The Review of Economic Studies, Vol. III, June, 1936, No. 3, pp. 159-192.

“On the Economic Theory of Socialism, Part I,” The Review of Economic Studies, Vol. IV, No. 1, October, 1936, pp. 53-71.

“On the Economic Theory of Socialism, Part II,” The Review of Economic Studies, Vol. IV, No. 2, February, 1937, pp. 123-42.

“Mr. Lerner’s Note on Socialist Economics,” Review of Economic Studies, Vol. IV, No. 2, February, 1937, pp. 143-44.

“Professor Knight’s Note on Interest Theory,” The Review of Economic Studies, Vol. IV, No. 3, June, 1937, pp. 231-35.

Source: University of Chicago Library. Office of the President. Hutchins Administration. Records. Box 283. Folder 10 “Economics”.

__________________________________

From Oscar Lange’s Declaration of Intention

I, OSCAR RICHARD LANGE, now residing at 5617 Dorchester Ave. [Chicago, Illinois], occupation University Professor, aged 35 years, do declare on oath that my personal description is: Sex Male, color White, complexion Fair, color of eyes Blue, color of hair Blond, height 5 feet 6 inches; weight 176 pounds; visible distinctive marks none, race Polish; nationality Polish.
I was born in Tomaszow-Mazowiecki, Poland, on July 27, 1904. I am married. The name of my wife is Irena, we were married on January 3, 1932, at Cracow, Poland; she was born at Czestochowa, Poland, on October 1, 1906, entered the United States at New York, N.Y., on Aug. 20, 1937, for permanent residence therein, and now resides with me. I have no children…

I have not heretofore made a declaration of intention….
my last foreign residence was Czestochowa, Poland.
I emigrated to the United States of America from Havre, France,
my lawful entry for permanent residence in the United States was at New York, N.Y.
under the name of Oskar-Ryszard Lange, on August 20, 1937
on the vessel [SS] Paris…

[Signed]
Oscar Richard Lange

…at Chicago, Illinois this 18th day of November, anno Domini, 1939.

 

From Petition for Naturalization
September 17, 1942

The address for the Lange family changed to 6044 Stony Island Ave., Chicago, Illinois.

Added to “Visible distinctive marks limp on rt. leg”

New member of the Lange family noted: son, Christopher, born Feb. 11, 1940, Chicago, Illinois.

The affidavit of witnesses was signed by

Professor Chester W. Wright (5747 Blackstone Ave., Chicago) and
Professor Jacob Viner (5554 Kenwood Ave., Chicago).

Source: National Archives and Record Administration. U.S. Department of Labor, Immigration and Naturalization Service. Oscar Richard Lange’s Declaration of Intention, November 18, 1939 and Petition for Naturalization, September 17, 1942.

Image Source: National Archives and Record Administration. U.S. Department of Labor, Immigration and Naturalization Service. Oscar Richard Lange’s Declaration of Intention, November 18, 1939.

 

Categories
Chicago Economic History Suggested Reading Syllabus

Chicago. Reading list for Economic History of Modern Europe to 1800. Hamilton, 1966

 

Some graduate course reading lists are allowed to evolve into full-blown bibliographies that provide historians of economics little idea of what the actual content of the course itself happened to be. Earl J. Hamilton was an economic historian who kept his reading lists short and sweet. I wouldn’t have put it past him or any other professor to have covered other material in his lectures, but I am still willing to bet that he really expected his students to complete this reading list.

________________________

[U.C.]
Economics 346
Economic History of Modern Europe to 1800
Earl J. Hamilton
Spring Quarter, 1966

To be read before May 6, 1966

  1. Sir John Clapham, A Concise Economic History of Britain…to 1750 (Cambridge, 1949), pp. 185-305.
  2. *J. H. Parry, The Age of Reconnaissance, pp. 19-52.
  3. *Adam Smith, Wealth of Nations, Book IV, Chapter VIII.
  4. N. Clark, Science and Social Welfare in the Age of Newton (Oxford, 1937), pp. 1-59.
  5. Earl J. Hamilton, “The Decline of Spain,” Economic History Review, Vol. VIII (1938), pp. 168-179.
  6. John U. Nef, Industry and Government in France and England, 1540-1640 (1940), pp. 1-157.
  7. Edwin F. Gay, “Inclosures in England in the Sixteenth Century,” Quarterly Journal of Economics, Vol. XVII, (1902—1903), pp. 576-597.
  8. *Earl J. Hamilton, “The Role of Monopoly in the Overseas Expansion and Colonial Trade of Europe before 1800,” American Economic Review, Proceedings, Vol. XXXVIII (1948), pp. 33-53.
  9. *Max Weber, The Protestant Ethic and the Spirit of Capitalism (London, 1930), Chapters I-V.
  10. Eli F. Heckscher, Mercantilism (London, 1935), Vol. I, pp. 19-44; Vol. II pp. 13-30.
  11. *W. Cunningham, The Growth of English Industry and Commerce, Third Edition, Vol. II (1903), Modern Times, pp. 494-540 (Ch. XV. Changes in the Organisation and Distribution of Industry); 540-583 (Ch. XVI. Spirited Proprietors and Substantial Tenants); 609-620 (Bk. VII, Ch. I. The Workshop of the World).
  12. L. Jones, “Agriculture and Economic Growth in England, 1660-1750,” Journal of Economic History, Vol. XXXV, No. 1 (March, 1965), pp. 1-18.
  13. H. John, “Agricultural Productivity and Economic Growth in England, 1700-1760, Journal of Economic History, Vol. XXXV, No. 1 (March, 1965), pp. 19-34.

*Read only for clearly essential facts, interpretation and point of view.

There will be an examination on May 6th.

A term paper on some important factor in the general economic development of some important country or period, some aspect of the rise of modern capitalism, some problem concerning mercantilism and economic development, or the growth of agriculture, industry, corporate organization or commerce in some significant time and place will be due on May 13th.

There will be a final examination from 8:30 to 11:30 A.M., on June 3rd on the lectures, the assigned reading and the field in which each student’s term paper falls.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Earl J. Hamilton Papers, Box 2, Folder “Correspondence. Academic and Personal”.

Image Source:  University of Chicago Photographic Archive, apf1-02446, Special Collections Research Center, University of Chicago Library.

 

Categories
Chicago Suggested Reading Syllabus

Chicago. Reading list for Money. Meiselman, 1961

 

David Israel Meiselman (1924-2014)  was awarded a Ph.D. in economics from the University of Chicago in 1961. His thesis “The Term Structure of Interest Rates” won the Ford Foundation Doctoral Dissertation Series Award. 

“Interview of David Meiselman conducted by Robert L. Hetzel (March 28, 1995)” can be downloaded from the Robert Hetzel Oral History Collection at the FRASER website.

Following the Virginian House Resolution in his honor, the reading list for the graduate money course taught by assistant professor David Meiselman from the Autumn quarter of 1961 can be found. Milton Friedman’s reading list for the same course in 1963 has been posted earlier.

______________________

STATE OF VIRGINIA
HOUSE RESOLUTION NO. 294
Offered February 24, 2015
Celebrating the life of David I. Meiselman.
2015 SESSION

––––––––––
Patron––Rust
––––––––––

WHEREAS, David I. Meiselman of Fairfax County, a distinguished economist and retired professor in the graduate economics program at Virginia Polytechnic Institute and State University, a highly regarded teacher and researcher, a veteran of the United States military, and a devoted husband and father, died on December 3, 2014; and
WHEREAS, after serving in the United States Army during World War II, David Meiselman received a bachelor’s degree from Boston University and master’s and doctoral degrees from the University of Chicago; and
WHEREAS, David Meiselman’s doctoral thesis, “The Term Structure of Interest Rates,” won a prize from the Ford Foundation and was instrumental in the creation of futures markets and other financial concepts that today are in wide use; and
WHEREAS, David Meiselman conducted pioneering research in many different economic disciplines and on public policy issues; he taught at the University of Chicago, the Johns Hopkins University, Macalester College, and the University of Minnesota; and
WHEREAS, David Meiselman was the author of five books and more than 100 articles; he had wide-ranging interests in economic policies and issues, and his work has been cited in many academic and research publications; and
WHEREAS, in 1971, David Meiselman moved to Merrybrook in Fairfax County; he helped build Virginia Polytechnic Institute and State University’s graduate level economics program in Northern Virginia; in all, he taught in the Commonwealth for more than 25 years; and
WHEREAS, during an outstanding career, David Meiselman was a senior economist for the United States Treasury, the United States House of Representatives, and the Organization of American States and served as a visiting scholar and later senior economist in the Office of the Comptroller of the Currency; and
WHEREAS, David Meiselman worked at several research and educational institutions, including the Manhattan Institute, where he was a founder and member of the board of directors, the Heritage Foundation, the Cato Institute, and the American Enterprise Institute; and
WHEREAS, in great demand for his expertise and insight, David Meiselman was a consultant to the United States Secretary of the Treasury, the World Bank, the New York Stock Exchange, and other government agencies and private companies; and
WHEREAS, in retirement, David Meiselman and his wife, Winifred, spent much time working to preserve their antebellum home, Merrybrook, near Herndon, which is a historic Civil War site and is listed on the National Register of Historic Places; and
WHEREAS, in addition to his wife, Winifred, David Meiselman will be greatly missed and fondly remembered by his children, Shmuel “Sam,” Ellen, and Nina, and their families, and by many other family members and friends; now, therefore, be it
RESOLVED, That the House of Delegates hereby note with great sadness the loss of David I. Meiselman of Fairfax County, a distinguished economist and retired professor in the graduate economics program at Virginia Polytechnic Institute and State University, a highly regarded teacher and researcher, a veteran of the United States military, and a devoted husband and father; and, be it
RESOLVED FURTHER, That the Clerk of the House of Delegates prepare a copy of this resolution for presentation to the family of David I. Meiselman as an expression of the House of Delegates’ respect for his memory.

Source: https://lis.virginia.gov/cgi-bin/legp604.exe?151+ful+HR294+pdf 

______________________

ECONOMICS 331 — MONEY
Autumn, 1961
D. Meiselman

(Note: selections are in the suggested order for reading. Readings marked with an asterisk (*) are required.)

I. The Supply of Money

The Federal Reserve System: Purposes and Functions

Robert V. Roosa, Federal Reserve Operations in the Money and Government Securities Markets

A.J. Meigs, Free Reserves and Interest Rates in a Theory of Money Supply Determination, chapters 1, 3, 4, pp. 77-82.

*G. Horwich, “Elements of Timing and Response in the Balance Sheet of Banking,” Journal of Finance (May, 1957).

P. Cagan, “The Demand for Currency Relative to the Total Money Supply,” Journal of Political Economy (August, 1958).

Albert G. Hart, “The Chicago Plan of Banking Reform,” in Readings in Monetary Theory.

*Milton Friedman, A Program for Monetary Stability, chapter 2.

Edward Simmons, “The Relative Liquidity of Money and Other Things,” in Readings in Monetary Theory.

Roland N. NcKean, “Liquidity and a National Balance Sheet,” in Readings in Monetary Theory.

II. Classical Quantity Theory and the Rate of Interest

*Irving Fisher, The Purchasing Power of Money, chapters 1, 2, 3, 4, 8.

*Alfred Marshall, Official Papers, “Evidence Before the Indian Currency Committee (1849)” questions 11758-11762; and “Evidence Before the Gold and Silver Commission (1887-88),” questions 9629-86. Testimony to Royal Commission on The Depression of Trade and Industry (1886), answers to question 8(i).

*A.C. Pigou, “The Value of Money,” in Readings in Monetary Theory.

Knut Wicksell, Interest and Prices, chapter 4.

___________, “The Influence of the Rate of Interest on Prices,” Economic Journal, V (17) June, 1907.

*J.M. Keynes, Tract on Monetary Reform, pp. 74-87, 41-73.

*Irving Fisher, The Theory of Interest, chapters 1-3.

*F.H. Knight, “Interest” in Encyclopaedia of the Social Sciences; also in Ethics of Competition.

Irving Fisher. Appreciation and Interest.

J.M. Keynes, Treatise on Money, Vol. 2, pp. 198-208.

*J.R. Hicks, “A Suggestion for Simplifying the Theory of Money,” in Readings in Monetary Theory, and Economica (1935).

III. The Keynesian Revolution

A. The Demand for Money, and the Rate of Interest

*J.M. Keynes, The General Theory of Employment, Interest, and Money, chapters 11-17.

James Tobin, “The Interest-Elasticity of Transactions Demand for Cash,” Review of Economics and Statistics (August, 1956).

__________, “Liquidity Preference as Behavior Towards Risk,” Review of Economic Studies (August, 1956), pp. 241-47.

*W.J. Baumol, “The Transactions Demand for Cash: An Inventory Theoretic Approach,” Quarterly Journal of Economics (November, 1952).

*Joan Robinson, “The Rate of Interest” Econometrica, Vol. 19; reprinted as chapter I of The Rate of Interest and Other Essays.

Abba Lerner, “On the Marginal Product of Capital and the Marginal Efficiency of Investment,” Journal of Political Economy (February, 1953), pp. 1-14.

B. The Theory of Income and Employment

*J.M. Keynes, The General Theory, chapters 1-4; chapter 6, section 2; chapters 7-10, 18-21, 24.

*Paul A. Samuelson, “The Simple Mathematics of Income Determination,” chapter 6 in Lloyd Metzler, et al, Income, Employment and Public Policy.

IV. The Wake of the Revolution

*J.R. Hicks, “Mr. Keynes and the Classics,” Econometrica (April, 1937). Reprinted in Readings in the Theory of Income Distribution.

*F. Modigliani, “Liquidity Preference and the Theory of Interest and Money,” Econometrica (January, 1944) and reprinted in Readings in Business Cycle Theory.

Jacob Marschak, Income, Employment and the Price Level, Lectures 1, 3, 12-20.

*D.H. Robertson, “Mr. Keynes and the Rate of Interest,” in Essays in Monetary Theory, and Readings in Theory of Income Distribution.

J.R. Hicks, Value and Capital, pp. 115-27, 130-62.

*H.G. Johnson, “Notes on Some Cambridge Controversies in Monetary Theory,” and D.H. Robertson, “Comments on Mr. Johnson’s Notes,” Review of Economic Studies (1951-52), pp. 90-110.

*Harold Somers, “Monetary Policy and the Theory of Interest,” in Readings in the Theory of Income Distribution.

*Don Patinkin, “Price Flexibility and Full Employment,” in Readings in Monetary Theory.

O.H. Brownlee, “The Theory of Employment and Stabilization Policy,” Journal of Political Economy (October, 1950).

Lloyd Metzler, “Wealth, Saving, and the Rate of Interest,” Journal of Political Economy (April, 1951).

*H.G. Johnson, “The General Theory After 25 Years,” copies on reserve. Also, American Economic Review (May, 1961).

*Milton Friedman, “Price, Income and Monetary Changes in Three Wartime Periods,” and Whittlesey’s discussion, pp. 614-25 and 642-43, American Economic Review Supplement 42 (May, 1952).

*Milton Friedman and David Meiselman, “The Relative Stability of Monetary Velocity and the Investment Multiplier in the U.S., 1897-1958,” sections 1, 2, 3, 5. Copies on reserve.

V. The Demand for Money and General Equilibrium Theory

*Don Patinkin, Money, Interest and Prices, Introduction and chapters 1-4, 8, and quotations on pp. 420, 435.

____________, “Liquidity Preference and Loanable Funds: Stock and Flow Analysis,” Economica, 1958.

*G.C. Archibald and R.G. Lipsey, “Monetary and Value Theory: A Critique of Lange and Patinkin,” Review of Economic Studies 26 (1), pp 1-22.

*Milton Friedman, “The Quantity Theory of Money: A Restatement,” in Studies in the Quantity Theory of Money, ed., M. Friedman.

*H. Makower and J. Marschak, “Assets, Prices, and Monetary Theory,” Readings in Price Theory and Economica (1938), pp. 261-88.

*M. Friedman, “The Demand for Money: Some Theoretical and Empirical Results,” Journal of Political Economy (August, 1959), pp. 327-51.

Philip Cagan, “The Monetary Dynamics of Hyperinflation,” esp. pp. 25-35 and 86-91 in Studies in the Quantity Theory of Money, ed., M. Friedman.

H.A. Latane, “Cash Balances and the Interest Rate—A Pragmatic Approach,” Review of Economics and Statistics (November, 1954), and supplementary article in Review of Economics and Statistics (November, 1960).

D. Meiselman, “Expectations, Errors, and the Term Structure of Interest Rates,” copies on reserve.

G.L.S. Shackle, “Recent Theories Concerning the Nature and Role of Interest,” Economic Journal (June, 1961).

John G. Gurley and Edward S. Shaw, Money in a Theory of Finance, chapters 1, 2, and summaries at the ends of succeeding chapters.

Don Patinkin, “Financial Intermediaries and Monetary Theory,” American Economic Review (March, 1961).

Alvin Marty, “Gurley and Shaw on Money in a Theory of Finance,” Journal of Political Economy(February, 1961).

*M. Friedman and D. Meiselman, op. cit., pp. 58-68.

VI. The Monetary Standard and International Monetary Adjustments

*Lloyd Mints, Monetary Policy for a Competitive Society, chapters 4,5.

*H.G. Johnson, International Trade and Economic Growth, chapters 6,7.

*J.M. Keynes, Tract on Monetary Reform, pp. 87-138.

___________, “Economic Consequences of Mr. Churchill,” in Essays in Persuasion.

*Milton Friedman, “The Case for Flexible Exchange Rates,” in Essays in Positive Economics.

Alan Holmes, The New York Foreign Exchange Market, Federal Reserve Bank of New York.

Source: Hoover Institution Archives. Milton Friedman Papers, Box 77, Folder “2. University of Chicago, Econ. 331”.

Image Source: David Meiselman 1979 portrait from Wikimedia Commons.

Categories
Chicago Economics Programs Economist Market Economists

Chicago. Memos discussing guests to teach during summer quarter, 1927

 

 

Apparently the 1926 summer quarter course planning at the Chicago department of political economy in 1926 was so wild that the head of the department, Leon C. Marshall, decided to start the discussion for 1927 on the second day of Summer, 1926. Four of the seven colleagues responded with quite a few suggestions.

This post provides the first+middle names where needed in square brackets. Also links to webpages with further information about the suggested guests have been added.

______________________

Copy of memo from
Leon Carroll Marshall

THE UNIVERSITY OF CHICAGO
Department of Economics

Memorandum from L. C. Marshall. June 22, 1926

To: C. W. Wright, J. A. Field, H. A. Millis, J. Viner, L. W. Mints, P. H. Douglas, W. H. Spencer

We really must break through the morass we are in with respect to our summer quarter. Partly because of delayed action and partly because of an interminable debating society in such matters we finally get a patched up program which is not as attractive as it should be.

I shall proceed on the basis of the homely philosophy that the way to do something is to do something. I shall try to secure from every member of the group a statement of his best judgment concerning the appropriate course of action for the summer of 1927 and then move at once toward rounding out a program.

Won’t you be good enough to turn in to E57 within the next few days your suggestions and comments with respect to the following issues.

  1. Do you yourself expect to be in residence the summer quarter of 1927?
  2. If you do, what courses do you prefer to teach? Please list more than two courses placing all of the courses in your order of preference. In answering this question, please keep in mind the problem of guiding research. Should you offer a research course?
  3. What are your preferences with respect to hours? Please state them rather fully and give some alternatives so that a schedule may be pieced together.
  4. What courses or subject matter should we be certain to include in the summer of 1927?
  5. What men from outside do you recommend for these courses which we should be certain to include? Please rank them in the order of your preference.
  6. Quite aside from the subject matter which you have recommended above, what persons from the outside ought we try to make contact with if our funds permit? This gives an opportunity to aid in making up the personnel of the summer quarter in all fields.
  7. Please give any other comments or suggestions which occur to you.

Yours very sincerely,

LCM:G

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
Jacob Viner

The University of Chicago
Department of Political Economy

July 1, 1926

Dear Mr. Marshall

I will want to offer 301 (Neo-class Ec.) & 353 (Int Ec. Pol) as usual next summer, though if we have a good outside theorist to give 301, I would like to give a course on Theory of Int Trade in addition to 353. I think we need someone especially in Banking, next in theory. Beyond these we should offer work in some of the following, if we can get first rankers: statistics, private finance, transportation, economic history of Europe & ec. Hist. of U.S.

I suggest the following from which selections could be made:

Banking

 Theory Statistics Transportation

Ec. Hist.
[Eugene E.]
Agger

 

[Benjamin Haggott] Beckhart

 

[Allyn Abbott]
A.A. Young

 

[Chester Arthur]
C. A. Phillips

 

[Oliver Mitchell Wentworth]
Sprague

 

[James Harvey] Rogers

 

[Ernest Minor] E.M. Patterson

 [Allyn Abbott]
Young

 

[Jacob Harry]
Hollander[Frank Hyneman] Knight

 

[Albert Benedict] Wolfe

 

[Herbert Joseph] Davenport

 [Henry Roscoe] Trumbower

 

[Homer Bews] Vanderblue

 [Melvin Moses] M.M. Knight

 

[Abbott Payson] A.P. Usher

As other possibilities I suggest [George Ernest] Barnett, [James Cummings] Bonbright, [Edward Dana] Durand, [Edwin Griswold] Nourse, [Sumner Huber] Slichter, John D. [Donald] Black, Holbrook Working, [Alvin Harvey] Hansen.

[signed]
J Viner

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
Paul Howard Douglas

The University of Chicago
The School of Commerce and Administration

June 29, 1926

Professor L. C. Marshall
Faculty Exchange

Dear Mr. Marshall:

You have hit the nail on the head in your proposal to get under way for next summer, and I am very much pleased at your action. Answering your questions specifically may I say—

  1. That I do not expect to be in residence for the summer quarter of 1927.
  2. &3. Since I shall not be in residence no answers to these questions are, I take it, necessary.

 

  1. We should, I think, be certain to include adequate work in the following fields (a) Economic theory, (b) Monetary and banking theory, (c) Labor problems, (d) Statistics and quantitative economics, (e) Taxation and Public finance, (f) Economic history.
  2. As regards men from outside, I would recommend the following in each field: (a) Economic theory—[Herbert Joseph] H. J. Davenport, [John Rogers] J. R. Commons, [Frank Hyneman] F. H. Knight; (b) Monetary and banking theory—[Allyn Abbott] A. A. Young, [Oliver Mitchell Wentworth] O.M.W. Sprague, [James Waterhouse] James W. Angell; (c) Labor problems—Selig Perlman, Alvin [Harvey] H. Hansen; (d) Statistics and quantitative economics—[Frederick Cecil] F. C. Mills, [Robert Emmet] R. E. Chaddock, [William Leonard] W. L. Crum; (e) Taxation and public finance—[Harley Leist] H. L. Lutz, [William John] William J. Shultz; (f) Economic history—[Norbert Scott Brien] N. S. B. Gras.
  3. As people from outside to try for, might it not be possible to secure some one from England, such as [John Atkinson] John A. Hobson, Henry Clay, or [Dennis Holme] D. H. Robertson? Might it not also be possible to get Charles Rist from France or [Werner] Sombart from Germany?

Faithfully yours,
[signed]
Paul H. Douglas

P.S. The news that [Henry] Schultz and [Melchior] Palyi are to be with us next year is certainly welcome. Should we not let everyone know that they are coming, and should not a news note to this effect be sent on to the American Economic Review? [Handwritten note here: “Mr. Wright doing this”]

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
Lloyd Wynn Mints

The University of Chicago
The School of Commerce and Administration

July 16, 1926

Memorandum to L. C. Marshall from L. W. Mints, concerning the work of the summer quarter, 1927.

  1. It is my present intention not to be in residence during the summer quarter, 1927, although I will be in the city, I suppose.
  2. It appears to me that we should attempt to get men from the outside who would represent some of the newer points of view rather than the orthodox fields. I should suppose that it would be desirable to have a man in statistics and, if he could be found, somebody to do something with quantitative economics. For the statistics I would suggest [William Leonard] Crum, [Frederick Cecil] Mills, [Frederick Robertson] Macaulay, [Willford Isbell] King, [Bruce D.] Mudgett, [Robert] Riegel. I am ignorant of the particular bents of some of the statistical men, but I should suppose that in quantitative economics [Holbrook] Working, [Alvin Harvey] Hansen, or [William Leonard] Crum might do something. Perhaps [Edmund Ezra] Day should be added to the men in Statistics.
    In economic history, as I remember it, we have had no outside help for a long time. I should like to see either [Noman Scott Brien] Gras or Max [Sylvius] Handman give some work here in the summer.
    Particular men who represent somewhat new points of view, and who might be had for the summer, I would suggest as follows: [Lionel Danforth] Edie, [Oswald Fred] Boucke, [Morris Albert] Copeland, [Sumner Huber] Slichter.
    In addition I should like very much to see either [Edwin Robert Anderson] Seligman or [John Rogers] Commons here for a summer.

[signed]
L.W.M.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
Harry Alvin Millis

Answers to questions re Summer Teaching, 1927

  1. Yes, I feel that I must teach next summer unless that plan you have been interested in goes through.
  2. 342 [The State in Relation to Labor] and 440 [Research].
  3. 342 at 8; 440 hour to be arranged.
  4. 5. 6.: Should get a better rounded program than we have had. Should have an outstanding man in economic theory and another in Finance. For the former I would mention [John] Maurice Clark, [John Rogers] Commons, and [Frank Hyneman] Knight—in order named. For the latter I would mention [Allyn Abbott] Young, [James Harvey] Rogers. If we can get the money I should like to see [George Ernest] Barnett brought on for statistics and a trade union course.

 

  1. Would it be possible to have a seminar which would bring together the outside men and some of the inside men and our mature graduate students—these hand-picked? It might be made very stimulating.

[Signed]
H. A. Millis

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
Chester Whitney Wright

The University of Chicago
The Department of Political Economy

Memorandum to Marshall from Wright

Summer 1927
First term some aspects of economic history
1:30 or 2:30
May have to teach the whole summer but hope I can confine it to first term.
Can teach any phases of subjects in any fields suitable for term.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
James Alfred Field

[No written answer in the folder: however L. C. Marshall noted that Field would not be teaching in the summer term of 1927]

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Response from
William Homer Spencer

The University of Chicago
The School of Commerce and Administration
Office of the Dean

July 12, 1926

Mr. L. C. Marshall
The Department of Political Economy

My dear Mr. Marshall:

As Mr. [Garfield Vestal] Cox does not wish to teach during the Summer Quarter of 1927, I wish the Department of Political Economy would try to get Mr. [Edmund Ezra] Day of Wisconsin [sic, Michigan is correct] who could give both a course in statistics and a course in forecasting. Forecasting is not given this summer and unless we get someone from the outside to give it, I presume it will not be given next summer.

Why does not the Department of Political Economy for the coming summer get someone like Mr. [Leverett Samuel] Lyon to give an advanced course in economics of the market for graduate students? The Department of Political Economy could handle half of his time and I perhaps could handle the other half for market management

Now that it appears that the Department of Political Economy cannot get any promising young men in the Field of Finance, why do you not try for [Chester Arthur] Phillips of Iowa? He will give good courses and will draw a great many students from the middle west to the University.

So far as my own program is concerned, I have not made much progress. I tried to get [Roy Bernard] Kester of Columbia, but he turned me down. I am placing a similar proposition before [William Andrew] Paton of Michigan. In the Field of Marketing, I am trying for [Frederic Arthur] Russell of the University of Illinois to give a course in salesmanship primarily for teachers in secondary schools. Otherwise I have made no progress in getting outside men for next summer.

Yours sincerely,
[signed]
W. H. Spencer

WHS:DD

Source:  University of Chicago Archives. Department of Economics. Records. Box 22, Folder 7.

Categories
Agricultural Economics Chicago Iowa Minnesota Suggested Reading Syllabus

Minnesota. Course outline and reading for graduate macroeconomics. Brownlee, probably 1959

 

Based on a pamphlet in which he argued that “properly fortified margarine ‘compared favorably’ with butter in nutrition and palatability”, the economics Ph.D. student, Oswald Harvey Brownlee (1917-1985), brought the wrath of the Iowa Farm Bureau among others down upon himself and his economist seniors. After the President of Iowa State caved to the state’s dairy interests in the matter, Theodore  W. Schultz, D. Gale Johnson, and O. H. Brownlee were all to ultimately head off to the University of Chicago.

Oswald Harvey Brownlee. Putting dairying on a war footing, 64 page pamphlet published by Iowa State College Press, 1944.

See: Seim, David L. “The Butter-Margarine Controversy and “Two Cultures” at Iowa State
College.” The Annals of Iowa 67 (2008), 1-50.

Also mentioned in: Milton and Rose Friedman, Two Lucky People: Memoirs, p. 193.

Brownlee went on to teach at the University of Minnesota, where we found him teaching a graduate macroeconomics course. Clearly that was still time that the hatches separating microeconomics and macroeconomics were not so securely battened as today. “Public finance” was Brownlee’s major field so his broad fiscal policy interests make sense.

The course outline transcribed in this post comes from Martin Bronfenbrenner’s papers at the Economists’ Papers Archive at Duke University. Bronfenbrenner taught at the University of Minnesota from 1959-1962 and we can presume that the copy of Brownlee’s macroeconomics course outline with readings was for either 1958-59 or 1959-60.  A second, apparently later, version of the course outline for “Economics 176A” with “Brownlee” handwritten in the upper right corner is also found in the same folder. Three new readings from the second copy have been added and placed within square brackets below. The readings in Parts I and II, IX and X were not included in the second outline for “Economics 176A”.

_______________________

Handwritten note at top:
“Martin, Here is the outline for the Macro theory. Which part do you want to teach? [signed] Oz”

 

Economics 176A-B
Course Outline and Suggested Readings

This brief outline and reading list is intended to serve as a general summary of the materials to be considered during the course and as a guide to class discussion and to outside reading. The detail in the outline does not necessarily correspond to the detail in class discussion. The most significant readings are starred (*). The literature in this field has grown so rapidly during the past decade that this reading list cannot be considered as a complete bibliography of relevant writings.

It is hoped that during the quarter the student will gain an adequate understanding of how the equilibrium values of the relevant variables (gross national product, employment, the general level of prices and the rate of interest, for example) might be determined, and how changes in certain exogeneous variables (including various economic policy variables) might affect these equilibrium values. Although the primary emphasis of the course is on equilibrium levels of certain variables, an introduction to dynamic analysis (a description of the path of a variable over time) will be offered. This will provide the basis for subsequent discussion of business cycle theory and growth models.

  1. General Orientation of the Course
    1. Relationship of macro-static theories to other classes of economic theories
    2. Limitations of macro-static analysis as a basis for policy statements
  2. The firm’s Demand for Labor
    1. Importance for labor hired by business firms in the labor market as a whole
    2. Static theory of production with emphasis on the demand for labor.
      1. Nature of the firm’s production function
      2. Determinants of equilibrium level of employment within the firm
      3. Comparisons of equilibrium levels of employment under various resource market, product market and technological conditions
    3. Effects of Changes in Quantities of Other Resources Upon Demand for Labor

Readings:

1—K. E. Boulding, Economic Analysis, Chapter 31 (revised edition)

2—George Stigler, The Theory of Price, Chapters 6-11.

3—Paul A. Samuelson, Foundations of Economic Analysis, Chapter 3, pp. 21-33.

4—Joan Robinson, Economics of Imperfect Competition, Books VII and VIII.

  1. Equilibrium in the Labor Market for the Economy as a whole
    1. Aggregation of outputs, labor inputs, wage rates and prices
    2. Determination of various combinations of general level of prices and “real” output which will maintain equilibrium in the labor market—an “aggregate supply” function.
      1. With money wage rate autonomously determined: a wage “floor”, a wage “ceiling”, both a “floor” and a “ceiling”.
      2. With supply of labor dependent upon “real” wages.
      3. With supply of labor dependent upon “real” and money wages: the effects of asset holdings.
    3. Degree of Determinateness of relevant variables given only equilibrium in the labor market.
      1. Price level, real output and employment not uniquely determined
        1. Various combinations of price level and real output will maintain equilibrium in labor market, given the autonomously specified money wage or given fixed monetary debts and credits and flexible money wages.
        2. Employment is determined only upon the real wage, real output and employment are uniquely determined, but price level is not.

Readings:

1.*—Jacob Marschak, Income, Employment and the Price Level, Lectures 19 and 20.

2.—Sidney Weintraub, Income and Employment Analysis, Chapters 11 and 13.

3.—Francis M. Boddy, et al., Applied Economic Analysis, pp. 229-248.

4.—O. H. Brownlee, Economics of Public Finance, pp. 47-51.

5.—Don Patinkin, Money, Interest and Prices, IX-XII.

6.—Louis Hough, “An Asset Influence in the Labor Market”, Journal of Political Economy, June 1955.

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

[8.*—Gershon Cooper, “Taxation and Incentive in Mobilization” in Readings in Taxation edited by Musgrave and Shoup.]

  1. Aggregate Demand for Goods and Services: The “Crude Classical Theory”
    1. The Quantity Identity
      1. The Demand for Money—a linear function of money income (expenditure)
      2. Assuming the supply of money (M) and the fraction of income which people with to hold as cash balances are independently determined, the equilibrium level of total money expenditure is determined.
      3. Effects of changes in money demand and money supply upon equilibrium level of money income or expenditure.
      4. Incorporation of assets as a variable influencing the demand for money
      5. Information obscured by the simple quantity identity (that omitting assets as a variable)
        (Note: further analysis of the quantity identity in terms of the kind of aggregate demand function for goods and services which it might imply will be made in subsequent sections).
    2. Equilibrium in the Labor, Money, and Commodity Markets under the assumption of the quantity identity.
      1. Quantity of labor supplied a function only of money wages
      2. Quantity of labor supplied a function only of “real” wages
      3. Division of “real” output between consumption and investment.

Readings:

1.*—J. M. Keynes, The General Theory of Employment, Interest, and Money, Chapters 2 and 19

2.—L. Klein, The Keynesian Revolution, Chapter 1 and the technical appendix, pp. 199-205

3.—Albert G. Hart, Money, Debt and Economic Activity, Chapters IV-VI and VIII

4.—Alvin Hansen, Monetary Theory and Fiscal Policy, Chapters 1-3

5.—Franco Modigliani, “Liquidity Preference and the Theory of Interest and Money”, Econometrica, 12: 45-88 (January, 1944)

6.—Seymour Harris, (editor) The New Economics, Part IX, Chapter XLI

7.—Francis M. Boddy, et al., Applied Economic Analysis, Chapter 12, 13 (pp. 222-229)

8.*—Jacob Marschak, Income, Employment and the Price Level, Lecture 2.

9.—Don Patinkin, Money, Interest and Prices, I-VIII

10.—Archibald and Lipsey, “Monetary and Value Theory,” Review of Economic Studies, October, 1958

11.*—Milton Friedman, Studies in the Quantity Theory of Money, Chapter I

12.—James Tobin, “The Interest-Elasticity of Transactions Demand for Cash”, Review of Economics and Statistics, August, 1956

13.—H. Rose, “Liquidity Preference and Loanable Funds,” Review of Economic Studies, XXIV (1956-57)

14.—Don Patinkin, Liquidity Preference and Loanable Funds, Economica, November, 1958

15.—Vera Lutz, “Multiplier and Velocity Analysis: A Marriage”, Economica, February, 1955

16.—G. C. Archibald, “Multiplier and Velocity Analysis: An Amendment”, Economica, August 1956

[17.—Ira O. Scott, “The Availability Doctrine: Theoretical Underpinnings”, Review of Economic Studies, XXV No. 1, 41-48]

  1. Aggregate Demand for Goods and Services: The “Keynesian Theory”
    1. Equilibrium in the “Commodity Market”
      1. Consumption (and Saving)
        1. Relationship to income
        2. Relationship to rate of interest
      2. Investment
        1. Relationship to the rate of interest
          1. The marginal efficiency of capital
          2. Uncertainty and the level of investment
        2. Relationship to current income
      3. The Equating of Savings and Investment (Aggregate Demand for Commodities = Aggregate Supply of Commodities)
      4. Determination of various combinations of the rate of interest and real income which will fulfill the condition for equilibrium in the commodity market (will make savings = investment)
    2. Equilibrium in the Money Market
      1. The Liquidity Preference Schedule (The Demand for Money)
      2. With money supply (M) autonomously determined, there will be various combinations of the rate of interest, real output and the price level which will provide for equilibrium in the money market.
        1. The general case
        2. The special “Keynesian” case
    3. Simultaneous Equilibrium in the Money and Commodity Markets: An Aggregate Demand Function
      1. Equilibrium rates of real output and price level which fulfill the conditions for equilibrium in both the money and commodity markets.

Readings:

1.*—Keynes, The General Theory of Employment, Interest, and Money

2.—The Keynesian Revolution (*particularly Chapter 3)

3.*—J.R. Hicks, “Mr. Keynes and the Classics”, Econometrica, 4: 147-159 (April, 1937); also included in Readings in Income Distribution, The Blakiston Co.

4.*—Franco Modigliani, “Liquidity Preference and the Theory of Interest and Money”, Econometrica, 12; 45-88 (January, 1944)

5.—Alvin Hansen, Monetary Theory and Fiscal Policy, Chapters 4-6

6.—Sidney Weintraub, Income and Employment Analysis, Part II

7.—K.E. Boulding, The Economics of Peace, Chapters 7-9

8.—Wassily Leontief, “Postulates; Keynes” General Theory and the Classicists”, included in The New Economics, Part 4, Chapter XIX

9.—The New Economics, Parts 3 and 9

10.—Abba P. Lerner, The Economics of Employment, Part II

11.*—Jacob Marschak, Income, Employment and the Price Level, Lectures 3-18

12.—O.H. Brownlee, “The Theory of Employment and Stabilization Policy” Journal of Political Economy, Oct. 1950, pp. 412-24.

13.—Ira O. Scott, Jr., “An Exposition of the Keynesian System”, The Review of Economic Studies, XIX, (1), pp. 12-18

14.—Joan Robinson, “The Generalization of the General Theory”, included in The Rate of Interest and Other Essays.

15.—Louis Hough, “The Price Level in Macroeconomic Models”, The American Economic Review, June, 1954, pp. 269-86.

16.—Milton Friedman and Gary S. Becker, “A Statistical illusion in Judging Keynesian Models”, Journal of Political Economy, February, 1957

17.—L. R. Klein, “The Friedman-Becker Illusion,” Journal of Political Economy, December, 1958; and Friedman & Becker, “Reply”, same issue.

18.—Martin J. Bailey, “Saving and the Rate of Interest”, Journal of Political Economy, August, 1957.

[19.—Hans Brems, Output, Employment, Capital and Growth, Part I.]

  1. The Equilibrium Levels of Output, Employment, Prices and the Rate of Interest in the Keynesian System.
    1. Aggregate Supply and Aggregate Demand with Flexible Money Wages
    2. Aggregate Supply and Aggregate Demand with Labor Supply Perfectly Elastic at a Given Money Wage
    3. Effects of Changes in Autonomous Variables and Parameters
      1. The autonomous component of investment
        1. The multiplier
      2. Government expenditure for goods and services
      3. The export surplus
      4. Money wage rates
      5. Technology
      6. The degree of monopoly and employers’ market expectations
      7. Population and the labor supply
      8. The money supply
      9. Marginal propensities to consumer and invest
  2. An alternative Macro-Static System
    1. Some weaknesses in the Keynesian theory
      1. A change in the structure of the system required to explain U.S. postwar experience
      2. Increased savings: income ratio as income increases not empirically verified.
    2. Assets consumption as a variable affecting
      1. Real Assets
      2. Monetary assets (cash and government debt)
      3. Aggregate demand for goods and services when assets are included as a variable in the consumption function
        1. Comparison with quantity theory
        2. Comparison with Keynesian theory
    3. The Duesenberry-Modigliani Hypothesis
    4. Including assets in other Functions: Labor Supply and Demand for Money

Readings:

1.*—Don Patinkin, “Price Flexibility and Full Employment”, American Economic Review, 38: 543-64 (September, 1948).

1a.*—Don Patinkin, Money, Interest and Prices, XIII-XV and appropriate appendices.

2.—__________, “The Indeterminancy of Absolute Prices in Classical Economic Theory”, Econometrica, 17: 1-27

3.—__________, “Involuntary Unemployment and the Keynesian Labor Supply Function”, Economic Journal, LIX: 360-83

4.—Haavelmo, Hickman, Leontief and Phipps on Patinkin, Econometrica 18: 1-26 (January, 1950)

5.—James Tobin, “Money Wage Rates and Employment”, included in The New Economics, Part 8, Chapter XL.

6.—Arthur Smithies, “Effective Demand and Employment”, included in The New Economics, Part I, Chapter XXXIX.

7.—A. P. Lerner, “Mr. Keynes’ General Theory of Employment, Interest, and Money”, Reprinted in The New Economics, Part 3, Chapter XI

8.*—Milton Friedman, “A Monetary and Fiscal Framework for Economic Stability”, American Economic Review, 38: 245-64 (June, 1948)

9.—A. C. Pigou, “Economic Progress in a Stable Environment”, Economica, 1947, pp. 180-90

10.—A. C. Pigou, “The Classical Stationary State”, Economic Journal, 53: 343-51 (1943)

11.*—James Duesenberry, “Income-Consumption Relations and Their Implications”, included in Income, Employment and Public Policy, Essay III in Part One, and as Chapter I in Income, Saving, and the Theory of Consumer Behavior.

[11a.—John H. Power, “Price Expectations, Money Illusion, and the Real-Balance Effect”, Journal of Political Economy, April, 1959, 1331-43.]

12.*—Franco Modigliani, “Fluctuations in the Saving-Income Ratio: A Problem in Economic Forecasting”, included in National Bureau of Economic Research, Studies in Wealth, Volume XI, pages 371-443.

13.—Paul A. Samuelson, “The Simple Mathematics of Income Determination”, included in Income Employment and Public Policy,” Essay VI in Part One.

14.—Oscar Lange, Price Flexibility and Employment, particularly Chapters I-V and IX-XI.

15.—Donald M. Fort, “A Theory of General Short-Run Equilibrium,” Econometrica, 13: 293-310 (October, 1945)

16.—Sidney Weintraub, Income and Employment Analysis, Part III

17.—G. L. Bach, “Monetary-Fiscal Policy Reconsidered”, Journal of Political Economy, LVII: 383-94 (October 1949)

18.—George Terborgh, The Bogey of Economic Maturity.

19.—A. P. Lerner, Economics of Employment, parts IV and V.

20.*—William Hamburger, “The Determinants of Aggregate Consumption”, Review of Economic Studies, XXII (1), pp. 23-34

21.*—Franco Modigliani and Richard Brumberg, “Utility Analysis and the Consumption Function”, included in Kenneth Kurihara, The Post Keynesian System—Essays in Honor of John Maynard Keynes.

22.—O. H. Brownlee, Economics of Public Finance, Chapters 3-6

23.—__________, “The Theory of Employment and Stabilization Policy”, Journal of Political Economy, October, 1950, pp. 412-24.

24.*—Milton Friedman, A Theory of the Consumption Function (particularly chapters 1-4.)

  1. Monetary-Fiscal Policy
    1. Effects of changes in government expenditures for goods and services, net tax collections, the tax structure and the supply of money on the demand for and supply of goods and services.
      1. In the Keynesian System
      2. In the Alternative System
    2. Built-In Flexibility vs. Ad. hominum [sic, “ad hoc”] changes.

Readings:

1.—Robert L. Bishop, “Alternative Expansionist Fiscal Policies: A Diagrammatic Analysis”, Lloyd A. Metzler, ed. Income, Employment and Public Policy.

2.—O. H. Brownlee, “Taxation and the Price Level in the Short Run”, The Journal of Political Economy, February, 1954, pp. 26-33.

3.—__________, The Economics of Public Finance, Chapter 6.

4.—Paul A. Samuelson, “Principles and Rules in Modern Fiscal Policy: A Neo-Classical Reformulation”, included in Money, Trade, and Economic Growth.

5.*—Milton Friedman, “the Effects of a Full-Employment Policy on Economic Stability: A Formal Analysis”, included in Essays in Positive Economics.

6.—E. Cary Brown, “The Static Theory of Automatic Fiscal Stabilization”, Journal of Political Economy, October 1955.

7.—Alfred Conrad, “The Multiplier Effects of Redistributive Public Budgets”, Review of Economics and Statistics, May, 1955.

8.—William A. Salant, “Taxes, Income Determination and the Balanced Budget Theorem”, Review of Economics and Statistics, May, 1957.

[9. Bent Hansen, The Economic Theory of Fiscal Policy.]

  1. Some Applications of Static Macroeconomic Analysis to Other Problems
    1. Disaggregated Systems
    2. Effects of Shifts in Expenditure and Income in One Sector upon Income in Other Sectors.

Readings:

1.—John S. Chipman, The Theory of Inter-Sectoral Money Flows and Income Formation.

2.—D. Gale Johnson and O. H. Brownlee, “Reducing Price Variability Confronting Primary Producers”, Journal of Farm Economics, May, 1950, 176-193.

  1. Macrodynamic Analysis
    1. The Nature of “Business Cycle” Theories.
    2. First-Order Difference Equations
      1. The Cobweb Theorem
      2. Lagging of Consumption or Investment by One Period
      3. Introduction of Disturbances
      4. A Dynamic “Keynesian” Model
    3. Models Involving Higher Order Difference Equations
      1. “Interactions between the ‘Multiplier’ and the ‘Acceleration Principle’”.
      2. Inventory decisions as related to changes in consumption or investment in Plant and Equipment.
    4. Problems of Prediction

Readings:

1.*—Paul A. Samuelson, “Interactions Between the Multiplier and the Principle of Acceleration”, included in Readings in Business Cycle Theory, 261-69.

2.—Mordecai Ezekiel, “The Cobweb Theorem”, included in Readings in Business Cycle Theory, 422-42.

3.—J. M. Clark, “Business Acceleration and the Law of Demand”, included in Readings in Business Cycle Theory.

4.—R. F. Harrod, The Trade Cycle, Chapter 2.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Martin Bronfenbrenner Papers, Box 25, Folder “Macroeconomics, Problems & exercises. 1 of 2. 1961-70, n.d.”.

Image Source: Douglas Clement, “A Golden History” in Minnesota Economics (Fall 2006), p. 2.

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Minnesota. Interview about banking/financial historians. Heaton, 1955

In an earlier post we are provided with a glimpse of Minnesota professor Herbert Heaton’s wit in his answer to the question “What are economic historians made of?“. In preparing that post, I came across the following 1955 interview that provided some background assessments of economic historians who he judged might have been interesting for a Brookings project on the history of the Federal Reserve System.

A 2007 tribute from the Newsletter of the Economic History Association has been appended to this post for further biographical/career information.

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Backstory to Heaton Interview

In 1954, the Rockefeller Foundation awarded a grant to the Brookings Institution to undertake “a comprehensive history of the Federal Reserve System.” The collection consists of documents gathered or generated between 1954 and 1958, during the course of the Committee’s work.

MA (the interviewer below) was Mildred Adams “a New York journalist specializing in economic affairs”.

“Deputy Treasurer of the United States W. Randolph Burgess expressed his interest in writing a “definitive” history of the Federal Reserve System when he retired from federal service….”

“On January 21, 1954, the Rockefeller Foundation awarded a grant of $10,000 to the committee for an ‘exploratory study of the historical materials relating to the Federal Reserve System.’ The grant was to be administered by Brookings.”

“From January 1954 to June 1956, Mildred Adams served as research director of the project….Meanwhile, however, Burgess had been appointed under secretary of the Treasury and decided that he would not be able to start the planned comprehensive history any time soon. The committee spent the next two years searching for an able economic historian to assume direction of this major study.”

“By the spring of 1956, the committee’s failure to find a qualified scholar and Allan Sproul’s retirement from the Federal Reserve Bank of New York and subsequent resignation as chairman of the committee caused problems. With no historian, the committee redefined its goals and requested the Rockefeller Foundation to relieve the committee of its obligation to write a ‘definitive’ major study and instead allow it to encourage smaller, topical studies of the Federal Reserve System.”

Source:  Federal Reserve Bank of St. Louis. FRASER. Committee on the History of the Federal Reserve System: Guide to the Brookings Institution Archives.

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Notes from interview with Herbert Heaton

June 11, 1955

Internal Memorandum

Interview with Dr. Herbert Heaton, Professor of Economic History at the University of Minnesota

I went out to see Dr. Heaton on a Saturday morning at his home in Minneapolis and found him a charming Yorkshireman with a delightful sense of humor and a wide knowledge of both economics and history. Were he a little younger, he might prove to be the ideal person to do this work, although I have not yet read his books. I discussed the whole project with him in detail and then asked for any suggestions of people he might have for our purposes.

Dr. Heaton confirmed what we have already found, namely that the field is a rather arid one in the realm where history and economics meet. He himself had been on the committee which set up the economic history group with which Professor Arthur Cole of Harvard works. He agreed with Dr. [Walter W.] Stewart that that had rather worked itself out, though he said that the Hidys [Ralph Willard Hidy and Muriel E. (Wagenhauser) Hidy] were doing good work in their chosen field. They are to spend this summer in Minneapolis working on the Weyerhauser Lumber business.

Dr. Heaton said that John [K.] Langum was a brilliant student in the Harvard Business School. He had a minor in economic history and a fine historical sense.

He suggested that we talk to [Charles] Ray Whittlesey of the Wharton School who is interested in banking history. He thought that Whittlesey might have useful recommendations and called him one of the best insofar as historical interests in economic matters are concerned.

He spoke of Herman Kruse [sic, Herman E. Krooss] of New York University as someone who wrote well on financial history. He said that Mr. Kruse had energy, capacity and ability to handle material, but he seemed to think that he was lacking in tact, and he was not quite sure what he might do with an assignment in this project.

A young man named Robert Jost, now at Minnesota doing a doctor’s thesis on the Chatfield Bank, may be a possibility later on in the project, depending on what he makes of the Chatfield Bank. It is a small bank in Minnesota which, for some fortunate reason, has kept all its records and is making a very interesting study.

At the University of Wisconsin Dr. Heaton said that Rondo Cameron was working on the Credit Mobilier in Paris was worth watching. This again is a matter of seeing what he turns out.

He said that [Walter] Rostow at M.I.T., who has been devoting himself to business cycles, would ask the right questions of the material. Rostow has a quick mind and the right range of interests for this project. Oxford and Cambridge had both invited him for next year. His research expert is Mrs. [Anna] Schwartz. His brother [Eugene Rostow] is Dean of the Law School at Yale. In Dr. Heaton’s opinion, Mr. Rostow ought certainly to be explored.

Dr. Heaton says that Arthur Marget is someone he has known in the past as being brilliant on history or theory. He did not know that Mr. Marget had now gone to the Board and wondered if this might rule him out so far as the international sphere is concerned.

He also spoke of Frank A. Knox, who got his Ph.D at the University of Chicago and now writes reviews in the Canadian Journal of Economic and Political Science. Mr. Knox has not published much, but he is worth watching in Dr. Heaton’s opinion.

Dr. Heaton promised to keep the project in mind. He will talk with his associates about it and will send us any other suggestions which come up in the course of his work at the University of Minnesota.

We explored the things which he himself was doing, and he said that he had just turned 65 and did not believe that one should take on these big projects after that age. I had the feeling that he might, however, be interested in the project sufficiently so that he would take a piece of it. I had no authority to discuss it with him at that time, but I think this is worth considering. As a beginning, it might be worthwhile to read his “Economic History of Europe.”

MA:IB

Source:  Federal Reserve Bank of St. Louis. FRASER. Committee on the History of the Federal Reserve System.

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Past Presidents of the EHA:
Herbert Heaton

Herbert Heaton was one of the founding members of the Economic History Association, serving as one of its two inaugural vice presidents, ascending to the presidency in 1949, and remaining active in the association until his death. Along with E.A.J. Johnson and Arthur Cole, he drafted a grant application to the Rockefeller Foundation, which resulted in a $300,000 award in December of 1940. The grant financed research in economic history over the next four years. Heaton was a member of the original board of trustees of the EHA. Each of the five original members went on to serve as president of the association: Edwin F. Gay (1941-42), Heaton (1949-50), Earl J. Hamilton (1951-52), E.A.J. Johnson (1961-62), and Shepard B. Clough (1969).

Heaton was active in the formation of the EHA and was personally responsible for the recruitment of most of the members from the Midwest. He was an enthusiastic scholar of the evolution and applications of economic history, authoring several articles on the history of the discipline and a biography of Edwin Gay, the first president of the EHA. In an article entitled “Clio’s New Overalls,” published in The Canadian Journal of Economics and Political Science(November, 1954), Heaton was one of the first authors to discuss the marriage of clio and its metric partner in regard to the study of economic history. His discussion of the metric side of the equation was anything but enthusiastic however. Instead, he criticized the tendency of young scholars to use technical tools to make precise measurements of what he considered to be inaccurate data.

Heaton was born in England on June 6, 1890, the son of a blacksmith. He studied history and economics at the University of Leeds, earning his B.A. in 1911. He earned his M.A. in 1912 from the London School of Economics before accepting a position as assistant lecturer in economics under (Sir) William Ashley at the University of Birmingham. While there, he earned another Masters degree in 1914. He then moved to Australia and began a post as lecturer in history and economics at the University of Tasmania.

While in Tasmania Heaton developed the study of economics and encouraged research into Australian economic history. His controversial comments on the war provoked the censure of the more conservative elements of the Tasmanian press and public. In 1917 he moved to the University of Adelaide where he expanded the economics discipline and developed the diploma of commerce. Once again his liberal opinions aroused the ire of the conservative business class. Heaton argued that capitalism was the root of all the evils of individual and corporate life. He subscribed to the Marxist belief that capitalism would eventually give way to socialism. Consequently, the university refused to establish a degree in economics while Heaton led the discipline. As a means of preserving his academic career, he accepted a chair of economic and political science at Queen’s University in Kingston, Ontario in 1925. He stayed in Canada for two years before moving to the University of Minnesota, where he remained until he retired in 1958.

In 1936, Heaton compiled his research on Europe and published the Economic History of Europe, which was for a long time the standard text on the subject. Heaton said that he wrote the book especially for students with no background in economic history. He summed up economic history as the story of how man has worked to satisfy his material wants, in an environment provided by nature, but capable of improvement, in an organization made up of his relations with his fellows, and in a political unit whose head enjoys far-reaching power to aid, control, and appropriate. Such lofty views of the discipline were what made Heaton such a dedicated and valuable member of the Economic History Association.

Herbert Heaton died on January 24, 1973 in Minneapolis, survived by his three Australian-born children and his wife Marjorie Edith Ronson. He was an active scholar to the end of his life, publishing his ninth and final article in the JEH in June of 1969, nearly 28 years after his first JEH appearance.

Sources

Archives of the Economic History Association, Hagley Museum, Wilmington, DE.

Blaug, Mark, ed., Who’ s who in economics: a biographical dictionary of major economists, 1700-1986, Cambridge, MA: MIT Press, 1986, 2nd ed.

Bourke, Helen, “Heaton, Herbert (1890-1973),” Australian Dictionary of Biography, Vol. 9, Melbourne: Melbourne University Press, 1983, pp. 250-251.

Cole, Arthur H., “Economic History in the United States: Formative Years of a Discipline,” The Journal of Economic History, Vol. 28, No. 4 (Dec., 1968), pp. 556-589.

de Rouvray, Cristel, “‘Old’ Economic History in the United States: 1939- 1954,” Journal of the History of Economic Thought, Vol. 26, No. 2 (June, 2004), pp. 221-39.

Harte, N.B., “Herbert Heaton, 1890-1973: A Biographical Note and a Bibliography [Obituary],” Textile History Vol. 5 (1974), p. 7.

Payne, Elizabeth, “Herbert Heaton,” term paper for Professor Robert Whaples, Wake Forest University, 2006.

Selected writings of Herbert Heaton

“Heckscher on Mercantilism,” The Journal of Political Economy, Vol. 45, No. 3 (June, 1937), pp. 370-93.

“Rigidity in Business Since the Industrial Revolution,” The American Economic Review, Vol. 30, No. 1, Part 2, Supplement, Papers and Proceedings of the Fifty-second Annual Meeting of the American Economic Association (Mar., 1940), pp. 306-313.

“Non-Importation, 1806-1812,” The Journal of Economic History, Vol. 1, No. 2 (Nov., 1941), pp. 178-98.

“The Early History of the Economic History Association,” The Journal of Economic History, Vol. 1, Supplement: The Tasks of Economic History (Dec., 1941), pp. 107-09.

“Recent Developments in Economic History,” The American Historical Review, Vol. 47, No. 4 (July, 1942) pp. 727- 46.

“The Making of an Economic Historian,” The Journal of Economic History, Vol. 9, Supplement: The Tasks of Economic History (1949), pp. 1-18.

“Clio’ s New Overalls,” The Canadian Journal of Economics and Political Science, Vol. 20, No. 4 (Nov., 1954), pp. 467-77.

“Twenty-Five Years of the Economic History Association: A Reflective Evaluation,” The Journal of Economic History, Vol. 25, No. 4 (Dec., 1965), pp. 465-79.

Modern economic history, with special reference to Australia, Melbourne: Macmillan & Co., 1925.

A history of trade and commerce, with special reference to Canada, Toronto: T. Nelson & Sons, 1928.

The British Way to Recovery: Plans and Policies in Great Britain, Australia, and Canada, Minneapolis: University of Minnesota Press, 1934.

Economic History of Europe, New York: Harper, 1948.

A Scholar in Action, Edwin F. Gay, Cambridge: Harvard University Press, 1952.

 

Source: Past Presidents of the EHA: Herbert Heaton, The Newsletter of the Economic History Association (ed. Michael Haupert), No. 31 (December 2007), pp. 16-18.

Image Source: Newsletter of the Economic History Association, No. 31 (December 2007), p. 16.

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Chicago. Economics Ph.D. alumnus. Ernest H. Hahne, 1930

I have mentioned this before, the papers of the economic historian Earl Hamilton are a grab-bag of essentially unsorted material. Sometimes you find a rough gem to include in Economics in the Rear-view Mirror. For this post below we have a brief description of Harvard economic history professor Edwin Francis Gay’s seminar. To complete the post I have uncovered a few career facts about the author of the letter to Earl Hamilton that congratulates him for his memorial article about Gay.

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Ernest Herman Hahne
(b. Oct. 20, 1890; d. November 25, 1952)

1911. University of Nebraska, B.A.

1913. University of Nebraska, LL.B.

1914. Harvard University, A.M.

1916. Doctoral Dissertation in preparation. AER 1916, p. 503: The History of the meat packing industry in the United States.

1930. University of Chicago, Economics Ph.D. “Special Assessment Theory and Practise with Special Reference to Chicago.”

Listed among graduate students of political economy in the 25th year report of the University of Chicago department of political economy:

Academic career:

Taught sociology at the University of Chicago.

Taught economics and sociology at Dakota Wesleyan University (Mitchell, South Dakota)

Professor of economics, Northwestern (1919-1946)

Assistant dean of liberal arts college and director of the summer session at Northwestern.

President of Miami University (Oxford, Ohio)  April 1, 1946- November 25, 1952)

Chairman of the board of the Cincinnati branch of the Cleveland Federal Reserve

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Miami University
Oxford, Ohio

Office of the President

December 22, 1947

Professor Earl J. Hamilton
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Earl:

Thanks for the complimentary copy of the memorial you have written on Edwin Francis Gay in the June issue of the American Economic Review. As I read it, it brought back many a fond memory. I don’t know whether I ever told you that I started writing my doctor’s thesis, the history of the parking industry, and Gay recommended that I go to University of Chicago and carry on additional work and get first-hand information there. Therefore I went to Chicago in 1915, eventually to wind up as an assistant in sociology under E. W. Small and Scott E. W. Bedford. I not only took Gay’s courses in economic history but followed them with his course on French and German economists. Most of us were taking the work not only to brush up on continental theory but also to master the languages preparatory to the general exams. We met in Gay’s home. The course was supposed to last about two hours. I doubt if it ever broke up in less than three and a half to four hours. It was a small group that sat at the feet of Gamaliel but it included Rice of Dartmouth, Stehman of Minnesota, Van Sickle of Wabash, and two graduate students who went into business.

I remember writing a term paper for Gay in French history on the origin of the British labor exchanges. I never worked so hard on a paper in my life, but when it came back with the word “Excellent” sighed E.F.G. I felt well repaid. In fact I still have that paper in my library. I prize it highly. All this is simply to say that your admiration of one of Harvard’s greatest teachers does not exceed mine.

Your memorial is splendidly done.

With the Season’s greetings and best wishes from the Hahnes to the Hamiltons,

Cordially yours,
[signed]
Ernest

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Earl J. Hamilton Papers, Box 2, Folder “Correspondence — misc. 1919, Aug. 26; 1920s-1970s and n.d.”

Image Source: Yearbook of Miami University, Recensio 1946, p. 13.

Categories
Chicago Exam Questions Suggested Reading Syllabus

Chicago. Monetary International Economics, readings and exam. Metzler, 1967

 

Lloyd Metzler provided a token Keynesian voice with a Harvard accent at post-WWII Chicago. Once the Cowles Commission moved to Yale, Metzler found himself vastly outnumbered. And yet he persisted.

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Syllabus and readings for Economics 370 in 1950.

Exam for Economics 370 in 1953.

All Economics in the Rear-view Mirror blog-posts with Lloyd Metzler content.

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Biographical Note

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.

Source: University of Chicago Library. Guide to the Lloyd A. Metzler Papers 1941-48. Note: the interesting archival papers containing the following material are found in the Economists’ Papers Archive at Duke University.

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ECONOMICS 370
MONETARY ASPECTS OF INTERNATIONAL TRADE
Major Topics and Reading List

Winter 1967
Lloyd A. Metzler

  1. Mechanism of the Foreign Exchange Market
    1. P. T. Ellsworth, The International Economy, third edition, New York: Macmillan Company, 1964, Chapter 17.
    2. Alan R. Holmes and Francis Schott, The New York Foreign Exchange Market, New York: The Federal Reserve Bank of New York, 1965, Chapters 1-6.
    3. Frank A. Southard, Jr., Foreign Exchange Practice and Policy, New York: The McGraw-Hill Book Company, 1940.
    4. N. Crump, The ABC of the Foreign Exchanges, London: Macmillan and Company, Ltd., 1951.
    5. James E. Meade, Studies in the Theory of International Economic Policy, Vol. I, The Balance of Payments, London: Oxford University Press, 1951, Chapter 1.
  2. The Quantity of Money, the Rate of Interest, and the Price Level
    1. Sub-Committee on General Credit Control and Debt Management of the Joint Committee on the Economic Report, Hearings on the Question, What Should our Monetary and Debt Management Policy Be? 82ndCongress of the United States, 1952, pp. 688-7111, 691-698. (These pages include the testimony of Milton Friedman and Paul Samuelson.)
    2. James Tobin, “Monetary Policy and the Management of the Public Debt. The Patman Inquiry,” Review of Economics and Statistics, Vol. XXXV, No. 2, May 1953, pp. 118-127.
    3. Robert V. Roosa, “Interest Rates and the Central Bank” in Money, Trade and Economic Growth, in honor of John Henry Williams, New York: The Macmillan Company, 1951.
    4. Lloyd A. Metzler, “Wealth, Saving, and the Rate of Interest,” Journal of Political Economy, Vol. LIX, No. 2, April, 1951, pp. 93-116.
    5. Robert A. Mundell, “The Public Debt, Corporate Income Taxes, and the Rate of Interest,” Journal of Political Economy, Vol. LXVIII, No. 6, December 1960, pp. 622-626.
    6. George Horwich, “Real Assets and the Theory of Interest,” Journal of Political Economy, Vol. LXX, No. 2, April 1962, pp. 158-169.
    7. Don Patinkin, Money, Interest, and Prices, first edition, Evanston: Row, Peterson and Co., 1956, Part. II.
  3. The Role of Money in International Adjustment: Full Employment and Under-Employment
    1. J. M. Keynes, Treatise on Money, Vol. I, The Pure Theory of Money, London: Macmillan and Company, 1935, Chapter 21.
    2. Lloyd A. Metzler, “The Theory of International Trade,” From A Survey of Contemporary Economics, Howard S. Ellis, editor Homewood, Illinois: R. D. Irwin, Inc., 1948.
  4. Free Market Exchange Rates
    1. A. J. Brown, “The Foreign Exchanges” in Oxford Studies in the Price Mechanism, Edited by T. Wilson and P.W. S. Andrews, Oxford at the Clarendon Press, 1951, Chapters I (i) and II (ii).
    2. S. Alexander, “Effects of A Devaluation on a Trade Balance,” International Monetary Fund Staff Papers, Vol. II, No. 2, April 1952.
    3. Milton Friedman, “The Case for Flexible Exchange Rates,” in Essays in Positive Economics, Chicago, University of Chicago Press, 1953, pp. 157-203.
    4. Joan Robinson, Essays in the Theory of Employment, Oxford: Basil Blackwell, 1947, Part III, “The Foreign Exchanges.”
    5. Lloyd A. Metzler, “Exchange Rates and the International Monetary Fund,” in International Monetary Policies, Postwar Economic Studies No. 7, Washington, D.C.: Board of Governors of the Federal Reserve System, September, 1947.
    6. Rudolph R. Rhomberg, “A Model of the Canadian Economy under Fixed and Fluctuating Exchange Rates,” Journal of Political Economy, Vol. LXXII, No. 1, February 1964, pp. 1-31.
  5. Forward Exchange Rates
    1. Paul Einzig, The Theory of Forward Exchange, London: Macmillan and Co., Ltd., 1937.
    2. Paul Einzig, A Dynamic Theory of Forward Exchange, London, Macmillan and Co., New York, St. Martin’s Press, 1961.
    3. Alan R. Holmes and Francis Schott, The New York Foreign Exchange Market, New York: The Federal Reserve Bank of New York, 1965, Chapters 7-8.
    4. Paul Einzig, “Some Recent Development in Official Forward Exchange Operations,” Economic Journal, Vol. LXXIII, No. 290, June 1963, pp. 241-53.
    5. Paul Einzig, “Some Recent Changes in Forward Exchange Practices,” Economic Journal, Vol. LXX, No. 279, September, 1960, pp. 485-95.
  6. The Balance of Payments and the Concepts of Income
    1. R. F. Bennett, “Significance of International Transactions in National Income”, in Studies in Income and Wealth, Vol. VI, New York: National Bureau of Economic Research, 1943.
    2. U. S. Department of Commerce, Income and Output, 1958 supplement to the Survey of Current Business.
  7. The Theory of Income Transfers
    1. J. M. Keynes, “The Transfer Problem,” Economic Journal, XXXIX, No. 153, March 1929, pp. 1-7.
    2. B. Ohlin, “The Reparation Problem: A Discussion, I. Transfer Difficulties, Real and Imagined,” Economic Journal, Vol. XXXIX, No. 154, June 1929, pp. 172-78.
    3. J. M. Keynes, “The Reparation Problem: A Discussion. II. A Rejoinder” Economic Journal, Vol. XXXIX, no. 154, June 1929, pp. 179-82.
    4. J. Rueff, “Mr. Keynes’ Views on the Transfer Problem, Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 388-99.
    5. B. Ohlin, “Rejoinder to J. Rueff,” Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 400-4.
    6. J. M. Keynes, “Reply to J. Rueff,” Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 404-8.
    7. L. A. Metzler, “The Transfer Problem Re-considered,” Journal of Political Economy, Vol. L, No. 2, June 1942.
    8. H. G. Johnson, “The Transfer Problem and Exchange Stability,” Journal of Political Economy, Vol. LXIV, No. 3, June 1956, pp. 212-25.
  8. Postwar Monetary Conditions and the Position of the U.S. Dollar
    1. R. Hinshaw, Toward Currency Convertibility, Princeton University, Essays in International Finance, No. 31, 1958.
    2. R. Triffin, Europe and the Money Muddle, New Haven: Yale University Press, 1957.
    3. C. P. Kindleberger, The Dollar Shortage, Cambridge: Massachusetts [Institute of ] Technology Press, New York: John Wiley and Sons, Inc., 1950.
    4. R. Triffin, “The International Monetary Position of the United States,” in The Dollar in Crisis, S.E. Harris, editor, New York: Harcourt, Brace and World, Inc., 1961.
    5. P. T. Ellsworth, The International Economy, third edition, New York: The Macmillan Company, Part VI.
    6. H. B. Lary, Problems of the United States as World Trader and Banker, Princeton University Press for the National Bureau of Economic Research, 1963.
    7. Triffin, The Evolution of the International Monetary System: Historical Reappraisal and Future Perspectives, Princeton Studies in International Finance, No. 12, International Finance Section, Princeton University, 1964.
    8. International Financial Arrangements: The Problem of Choice, Report on the deliberations of an international study group of 32 economists, International Finance Section, Department of Economics, Princeton University 1964.
    9. New Approach to United States International Economic Policy. Hearing before the subcommittee on international exchange and payments of the joint economic committee, Eighty-ninth Congress of the United States, second session, September 9, 1966.
    10. Ministerial Statement of the Group of Ten and Annex Prepared by Deputies, Statement of M. Valery Giscard d’Estaing, Chairman of the group, August 10, 1964.
    11. American Enterprise Institute, International Payments Problems, a symposium sponsored by the American Enterprise Institute for Public Policy Research, Washington, D.C. 1966.

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Lloyd A. Metzler

ECONOMICS 370
Course Examination
Winter, 1967

Answer all questions.

  1. Define two concepts of income which arise when one country (A) makes an annual income transfer to another country (B) and indicate the significance of each concept.
  2. Use the concepts above to show why, in a two-country economy, a presumption exists that the transfer will be more difficult if both countries require imported raw materials to produce than if both are self-sufficient in production. Without going into technical details, indicate why the theory for self-sufficient economies is correct despite this presumption.
  3. (a) Derive the conditions of balance in a full-employment open economy for the following markets: (i) the market for goods and services; (ii) the market for newly-issued securities (iii) the market for foreign exchange.
    (b) Show that if the first two markets are in balance, the country has neither a surplus nor a deficit in its balance of payments.
    (c) Show that if there is an excess supply (or deflationary gap) in both new securities and goods and services the country necessarily has a deficit in its balance of payments. Discuss the market mechanism which may eliminate this deficit, assuming full employment and flexible prices.
  4. The table below gives interest rates for 3-months U.S. treasury bills adjusted to an annual basis, as well as the spot rate and the 3-month forward rate on Canadian currency, each rate being defined as the U.S. dollar price of the Canadian dollar:

 

Period 3-month U.S. bills 3-month forward rate Spot Rate
(1) .05 $1.0025 $1.0000
(2) .04 $0.9975 $1.0000
(3) .03 $0.9950 $1.0000
(4) .04 $0.9900 $1.0000
(5) .07 $2.0050 $2.0000

On the basis of this information you are asked to compute, for all periods, the interest rate for Canadian 3-months bills on the assumption that all data lie on the Interest Rate Parity line. Show your computations.

Source:  Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Lloyd Appleton Metzler Papers, Box 3, Folder “Econ 370- Course Exams”.

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