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United States. Courses of Study of Political Economy. 1876 and 1892-93.

 

The first article in the inaugural issue of The Journal of Political Economy, “Courses of Study in Political Economy in the United States in 1876 and in 1892-93,” was written by the founding head of the University of Chicago’s department of political economy, J. Laurence Laughlin. This post provides Laughlin’s appendix that provided information about economics courses taught in 65 colleges/universities in the United States during the last quarter of the 19th century. The bottom line of the table is that “aggregate hours of instruction in 1892-3 [were] more than six times the hours of instruction given in 1876”.

__________________________

“How little Political Economy and Finance were taught only fifteen years ago, as compared with the teaching of to-day, must be surprising even to those who have lived and taught in the subject during that period…. At the close of the war courses of economic study had practically no existence in the university curriculum; in short, the studious pursuit of economics in our universities is scarcely twenty years old. These considerations alone might be reasons why economic teaching has not yet been able to color the thinking of our more than sixty millions of people. But about the close of the first century of our national existence it may be said that the study of Political Economy entered upon a new and striking development. This is certainly the marked characteristic of the study of Political Economy in the last fifteen years. How great this has been may be seen from the tables giving the courses of study, respectively, in about 60 institutions in the year 1876 and in 1892-3. (See Appendix I.) The aggregate hours of instruction in 1892-3 are more than six times the hours of instruction given in 1876.” [Laughlin, p. 4]

__________________________

Courses of Study in Political Economy in the United States in 1876 and in 1892-93.

Note: Returns could not be obtained from Johns Hopkins University, Amherst College, and some other institutions.

Institution.

Description of Courses.

1876.

1892-3.

No. hours per week.

 No. weeks in year. No. hours per week.

No. weeks in year.
University of Alabama.

Text Book and Lectures, Senior Year

Finance and Taxation

—

—

 —

—

 4

2

36

36
[Total hours of instruction per year] — 216
Boston University. Principles of Political Economy — — 3 20
[Total hours of instruction per year] — 60
Bowdoin College, Brunswick, Maine.

Elementary (Required)

Advanced (Elective)

5

—

 14

—

 4

4

12

10
[Total hours of instruction per year] 70 88
Brown University, Providence, R. I.

Elementary

History of Econ. Thought

Advanced Course

[2nd] Advanced Course

Seminary of History, Pol. Sci., and Pol. Econ.

2½

—

—

—

—

 16-17

—

—

—

—

 3

3

3

3

2

33-34

11-12

11

11

23
[Total hours of instruction per year] 40-42½ 242-250
University of Chicago, Chicago, Ill. 1.     Introductory Political Economy

2.     Descriptive Political Economy

3.     Advanced Political Economy

4.     Industrial and Economic History

5.     Scope and Method

6.     History of Political Economy

7.     Unsettled Problems

8.     Socialism

9.     Social Economics

10.   Practical Economics

11.   Statistics

12.   Railway Transportation

13.   Tariff History of U.S.

14.   Financial History of U.S.

15.   Taxation

16.   Public Debts

17.   Seminary

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

 —

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

 5

4

5

4

4

5

4

4

4

4

4

4

4

4

4

4

4

12

12

12

24

12

12

12

12

12

12

12

12

12

12

12

12

36
[Total hours of instruction per year] — 996
Colby University, Waterville, Maine.

Elementary [1st]

Elementary [2nd]

Theoretical

Historical

5

—

—

—

 7

—

—

—

 2

2

4

4

13

10

13

10
[Total hours of instruction per year] 35 138
Columbia College (School of Political Science, New York City. 1.     Principles of Political Economy (Element.)

2.     Historical Practical Political Economy (Advanced)

3.     History of Economic Theory (Advanced)

4.     Public Finance (Adv.)

5.     Railroad Problems (Adv.)

6.     Finan. History of U.S. (Adv.)

7.     Tariff History of U.S. (Adv.)

8.     Science of Statistics (Adv.)

9.     Communism and Socialism (Adv.)

10.   Taxation and Distribution (Adv.)

11.   Seminarium in Political Economy (Element.)

12.   Seminarium in Public Finance and Economy (Adv.)

13.   Law of Taxation (Adv.)

3 and 5, 6 and 7, 8 and 9
given in alternate years.

2

 

—

—

 

—

—

—

—

—

—

—

—

 

—

—

 17

 

—

—

 

—

—

—

—

—

—

—

—

 

—

—

 2

 

3

2

 

2

2

2

2

2

2

2

 

 

2

2

17

 

34

34

 

34

25

34

17

34

34

17

34

 

34

17
[Total hours of instruction per year] 34 764
Columbian University, Washington, D.C. Elements of Political Economy — — 5 8
[Total hours of instruction per year] — 40
Cornell University, Ithaca, N. Y. 1.     Elementary Political Economy

2.     Advanced Political Economy

3.     Finance

4.     Financial History

5.     Railroad Problems

6.     Currency and Banking

7.     Economic History

8.     Statistics

2

—

—

—

—

—

—

—

 11

—

—

—

—

—

—

—

 3

2

2

2

2

2

2

1

34

34

34

13

11

10

34

34
[Total hours of instruction per year] 22 408
Dartmouth College, Hanover, N.H. 1.     Elementary

2.     Advanced

3.     Advanced Finance and Tariff

6

—

—

 6

—

—

 6

6

6

6 2/3

4 1/6

3 1/3
[Total hours of instruction per year] 36 85
University of Denver, Col. 1.     Ely’s Introduction

2.     Ingram’s History

3.     Gilman’s Profit-Sharing

4.     Ely, Labor Movement in America

5.     Kirkup’s and Rae’s Socialism

6.     Finance and Taxation

7.     International Commerce

—

—

—

—

—

—

—

 —

—

—

—

—

—

—

 2

1

1

2

2

4

2

15

5

5

5

5

5

5
[Total hours of instruction per year] — 90
DePauw University, Greencastle, Ind.

Economics (Elementary)

Seminarium (Advanced)

4

—

12

—

4

2

18

36
[Total hours of instruction per year] 48 144
Drury College, Springfield, Mo. Elementary Course 5 6 5 12
[Total hours of instruction per year] 30 60
Emory College, Oxford, Ga. Jevons’ Text, and Lectures. — — 5 12
[Total hours of instruction per year] — 60
Franklin and Marshall College. Political Economy, (Walker’s) 2 15 2 20
[Total hours of instruction per year] 30 40
Georgetown College, Ky. 1.     General Economics

2.     Special Topics

5

—

 15

—

 3

3

 20

20
[Total hours of instruction per year] 75 120
Harvard University, Cambridge, Mass. 1.     Introductory

2.     Theory (Advanced)

3.     Economic History from 1763

4.     Railway Transportation

5.     Tariff History of U.S.

6.     Taxation and Public Debts

7.     Financial Hist. of U.S.

8.     Condition of Workingmen

9.     Economic Hist. to 1763

10.   History of Theory to Adam Smith

Seminary

3

3

—

—

—

—

—

—

—

—

—

 30

30

—

—

—

—

—

—

—

—

—

 3

3

3

3

2

3

2

3

3

2

2

30

30

30

15

15

30

15

30

30

15

30
[Total hours of instruction per year] 180 735
Haverford College, Pa. Economic Theory — — 2 40
[Total hours of instruction per year] — 80
Howard University, Washington, D. C. Elementary 5 10 5 10
[Total hours of instruction per year] 50 50
Illinois College and Whipple Academy, Jacksonville, Ill. Newcomb’s Polit. Economy, Seniors — — 5 15
[Total hours of instruction per year] — 75
University of Illinois, Champaign, Ill. Senior Class 5 11 5 11
[Total hours of instruction per year] 55 55
Iowa College, Grinnell, Iowa.

Political Economy

Taxation

Railroad Problems

Socialism

5

—

—

—

 10

—

—

—

 3

3

3

3

37

14

12

11
[Total hours of instruction per year] 50 222
State University of Iowa, Iowa City, Iowa.

Elements of Economics

Currency and Banking

Industrial Revolutions of 18th Century

Recent Econ. History and Theory

Railroads, Pub. Regulation of

Seminary in Polit. Econ.

5

—

—

 

—

—

—

 14

—

—

 

—

—

—

 5

5

2

 

2

2

1

 14

11

14

 

11

10

35
[Total hours of instruction per year] 70 230
Kansas State Agricultural College, Manhattan, Kan. Elementary, 4th year 5 8 5 11
[Total hours of instruction per year] 40 55
Kansas State University, Lawrence, Kansas. 1.     Elements of Political Economy

2.     Applied Economics

3.     Statistics

4.     Land Tenures

5.     Finance

5

—

—

—

—

 19

—

—

—

—

 5

3

2

2

2

 19

19

19

19

19
[Total hours of instruction per year] 95 266
Lake Forest University, Lake Forest, Ill. 1.     Elementary

2.     Advanced

3

—

 11

—

 3

3

 16

13
[Total hours of instruction per year] 33 87
Massachusetts Institute of Technology, Boston, Mass. 1.     Political Economy, Elem., Junior Year

2.     Financial Hist. of U.S., Jun. and Sen. Year

3.     Taxation, Junior and Senior Year

4.     History of Commerce

5.     History of Industry, Junior and Senior Year.

6.     Socialism, etc. (Option), Jun. and Sen. Year

7.     History of Economic Theory (Opt.), Senior

8.     Statistics and Graphic Methods, Junior

9.     Statistics and Sociology (Option) Senior

2

—

 

—

—

—

 

—

—

 

—

—

 15

—

 

—

—

—

 

—

—

 

—

—

 3

3

 

3

3

—

 

3

2

 

2

3

 15

15

 

15

15

—

 

15

15

 

15

15
[Total hours of instruction per year] 30 375
Michigan Agricultural College. Primary Course — — 5 12
[Total hours of instruction per year] — 60
University of Michigan, Ann Arbor, Mich. 1.     Elements of Political Economy

2.     Elements of Political Economy

3.     Hist. Devel. of Industr. Society

4.     Finance

5.     Problems in Pol. Econ

6.     Transportation Problem

7.     Land Tenure and Agrarian Movements

8.     Socialism and Communism

9.     Currency and Banking

10.   Tariff History of U.S.

11.   Indust. and Comm. Develop. of U.S.

12.   History of Pol. Econ.

13.   Statistics

15.   Economic Thought

16.   Labor and Monopoly Problems

17.   Seminary in Finance

18.   Seminary in Economics

20.   Social Philosophy with Economic Relations

21.   Current Econ. Legislation and Literature

2½

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

 

—

 18

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

 

—

 3

4

3

4

4

2

2

2

2

2

2

2

1

1

1

2

2

1

 

2

18

18

18

18

18

18

18

18

18

18

18

18

18

18

18

18

18

18

 

18
[Total hours of instruction per year] 45 756
Middlebury College, Middlebury, Vermont. 1.     Elementary (Junior Class)

2.     Advanced (Senior Class)

3.     Finance (Senior Class)

4.     Seminary

4

4

—

—

 10

10

—

—

 3

2

2

1

 35

21

14

21
[Total hours of instruction per year] 80 196
University of Minnesota. 1.     Elementary

2.     Advanced

3.     Am. Pub. Economy

4.     Undergraduate Seminary

5.     Graduate Seminary

5

—

—

—

—

 13

—

—

—

—

 4

4

4

2

1

 13

13

10

23

36
[Total hours of instruction per year] 65 226
University of Mississippi, University, Miss. Advanced — — 5 30
[Total hours of instruction per year] — 150
Mt. Holyoke College, South Hadley, Mass.

Polit. Econ. (General)

Polit. Econ. Seminary

—

—

 —

—

 4

2

 12

12
[Total hours of instruction per year] — 72
College of New Jersey at Princeton.

Pol. Econ. (Elem., Elective)

Pol. Econ. (Elem., Required)

Finance (Elective)

Historics—Econ. Semin.

2

—

—

—

 13

—

—

—

 —

2

2

2

 —

16

16

15
[Total hours of instruction per year] 26 94
College of the City of New York. — — — 16
[Total hours of instruction per year] — 48*
New Hampshire College of Agriculture and Mechanic Arts, Hanover, N. H. Elementary—Perry or Walker 4 10-12 5 10
[Total hours of instruction per year] 48 50
Oberlin College, Oberlin, Ohio. 1.     Elementary Polit. Econ.

2.     Advanced Polit. Econ.

3.     Finance

4.     History Econ. Thought

5.     Economic and Social Problems

6.     “Money,” etc.

5

—

—

—

—

—

 12

—

—

—

—

—

 5

5

3

3

3

2

 11

12

25

13

12

36
[Total hours of instruction per year] 60 337
Ohio State University.

Elementary

Advanced

Finance

Seminary (Indust. History)

—

—

—

—

 —

—

—

—

 2

2

2

2

 38

26

12

38
[Total hours of instruction per year] — 228
Ohio Wesleyan University, Delaware, Ohio. 4 12 4 12
[Total hours of instruction per year] 48 48
Penn. Military Academy, Chester, Penn. Elementary — — 5 13
[Total hours of instruction per year] — 65
University of Pennsylvania, Wharton, School of Finance and Economy, Philadelphia, Penn. 1.     Grad. Course in Finance

2.     Grad. Course in Theoretical Polit. Econ.

3.     Grad. Course in Statistics

4.     Elem. Course in Finance

5.     Elem. Course in Theoret. Polit. Econ.

6.     Elem. Course in Statistics

7.     Elem. Course in Practical Polit. Econ.

8.     Course in Money

9.     Course in Banking

10.   Advanced Course in Political Economy

11.   Economic History of Europe

12.   Grad. Course in Practical Polit. Econ.

13.   Econ. and Fin. History of U.S.

14.   Grad. Econ. History of the U.S.

15.   Grad. English Econ. History from 13th to 17th century

16.   Modern Econ. History.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

 

—

—

 —

—

—

—

—

—

—

—

—

—

—

—

—

—

 

—

—

 1

2

3

3

2

2

2

2

1

2

3

2

2

4

 

3

3

 30

30

30

30

30

15

15

15

30

30

30

30

30

30

 

30

30
[Total hours of instruction per year] — 1020
Purdue University, Lafayette, Ind. Elementary Course — — 3 19
[Total hours of instruction per year] — 57
Randolph Macon College, Ashland, Va. Elementary 2 32 2 32
[Total hours of instruction per year] 64 64
University of Rochester, Rochester, N.Y.

Elementary

Econ. Polit. History U.S.

5

—

 14

—

 5

1

 14

20
[Total hours of instruction per year] 70 90
Rutger’s College. Polit. Econ. (Elementary) 3 12 4 22
[Total hours of instruction per year] 36 88
Smith College, Northampton, Mass.

Elementary Course

Adv. Course in Theory

Seminarium

Practical Studies

3

—

—

—

 12

—

—

—

 3

3

2

2

 14

14

10

12
[Total hours of instruction per year] 36 128
South Carolina College, Columbia, S.C.

Polit. Econ. Senior Class

Applied Polit. Econ.

—

—

 —

—

 2

2

 40

20
[Total hours of instruction per year] — 120
Swarthmore College, Swarthmore, Penn.

Polit. Econ. (Walker)

Finance

Protection and Free Trade

Money and Banking

History of Econ. Theories

—

—

—

—

—

 —

—

—

—

—

 4

4

4

4

4

 20

10

10

10

10
[Total hours of instruction per year] — 240
Syracuse University, Syracuse, N.Y.

Elementary

Finance

Industrial Development since 1850

Seminary

—

—

—

—

 —

—

—

—

 3

2

2

2

 14

10

12

38
[Total hours of instruction per year] — 162
University of Tennessee, Knoxville, Tenn.

Elementary

Advanced (Post-Graduate)

—

—

 —

—

 3

2

 20

Varies
[Total hours of instruction per year] — 100?
University of Texas, Austin, Texas. General — — 3 36
[Total hours of instruction per year] — 108
Trinity College, Hartford, Connecticut.

Elementary

Advanced

Finance

4

—

—

 13

—

—

 3

4

2

 17

17

17
[Total hours of instruction per year] 52 153
Vanderbilt University, Nashville, Tennessee.

Political Economy, Elementary

Political Economy, Advanced

3

—

 36

—

 3

3

 36

36
[Total hours of instruction per year] 108 216
Vassar College, Poughkeepsie, New York.

Principles of Economics

Economic History

Railroads, Trusts, and Relation of State to Monopolies

Labor Problem and Socialism

Seminary

—

—

—

 

—

—

 —

—

—

 

—

—

 3

3

2

 

2

2

 18

18

18

 

18

18
[Total hours of instruction per year] — 216
University of Vermont, Burlington, Vermont.

Elementary

Advanced

—

—

 —

—

 3

2

 20

20
[Total hours of instruction per year] — 100
University of Virginia, Charlottesville, Va.

Theory of Economics

Science of Society

3

—

 26

—

 3

2½

 16

16
[Total hours of instruction per year] 78 88
Washington and Jefferson College, Washington, Pa. Political Economy 3 11 3 16
[Total hours of instruction per year] 33 48
Washington and Lee University, Lexington, Va.

Elementary

Advanced

—

—

 —

—

 3

3

 14

26
[Total hours of instruction per year] — 120
Washington University, St. Louis. Prescribed Course 3 20 3 20
[Total hours of instruction per year] 60 60
Wellesley College, Wellesley, Mass.

Industrial History

Economic Theory

Statistics (Seminary)

Socialism (Seminary)

—

—

—

—

 —

—

—

—

 3

3

3

3

 18

18

18

18
[Total hours of instruction per year] — 216
Wesleyan University, Middletown, Connecticut.

General Introductory (Sen.)

General Introductory (Jun.)

Economic Problems

 1½

—

—

 36

—

—

 2

3

2

 36

18

36
[Total hours of instruction per year] 54 198
West Virginia University, Morgantown, West Virginia.

Elementary Pol. Economy

Advanced Pol. Economy

—

—

 —

—

 2

2

 14

36
[Total hours of instruction per year] — 100
Williams College, Williamstown, Mass. Political Economy 6 14 3 15
[Total hours of instruction per year] 84 45
University of Wisconsin, Madison, Wis.

Econ. Seminary

Distribution of Wealth

History of Pol. Econ.

Money

Public Finance

Statistics

Recent Econ. Theories

Synoptical Lectures

Outlines of Economics

—

—

—

—

—

—

—

—

—

 —

—

—

—

—

—

—

—

—

 2

5

5

5

3

3

3

1

4

 37

14½

12

10½

37

12

14½

15

37
[Total hours of instruction per year] — 612½
Yale University, New Haven, Conn.

Pol. Econ.**—Elem. (2)

Pol. Econ.—Adv. (3)

Economic History (2)

Finance, Public (2)

Finance, Corporate (2)

Mathematical Theory (1)

Seminary Instruction (2)

3

2

 

—

—

—

—

 36

36

36

—

—

—

—

 4

3

4

2

3

1

1

 36

36

36

36

36

36

36
[Total hours of instruction per year] 180 648

* [College of the City of New York] A few hours additional are given in the work of the Department of Philosophy; the whole number amounting to some 52 or 53.

** [Yale University] Figures in brackets represent numbers of courses under each head.

Source:  Appendix I to “The Study of Political Economy in the United States” by J. Laurence Laughlin, The Journal of Political Economy, vol. 1, no. 1 (December, 1892), pp. 143-151.

Image Source:  J. Laurence Laughlin drawn in the University of Chicago yearbook Cap and Gown (1907), p. 208.

 

 

Categories
Cal Tech Carnegie Mellon Chicago Economists Suggested Reading Syllabus UCLA

Carnegie-Mellon. Economics of the Firm reading list. Richard W. Roll, 1967

 

It shouldn’t come as a surprise that economists who were pack rats with respect to their professional and personal papers often provide a significant source of material from their colleagues. Martin Bronfenbrenner was one such paper hoarder. Whenever I stumble across an economist’s materials in someone else’s archival papers, I feel a disproportionate obligation to transcribe the stuff, since it is somewhat unlikely that a fellow historian of economics seeking material on economist X would search the papers of economist Y without having good cause. And so, stumbling upon the reading list for one of Richard Roll’s first Carnegie-Mellon courses in a folder of Martin Bronfenbrenner’s papers, I now add that course reading list below. 

Note: “GI” before the course number matches the course numbering for Carnegie Mellon seen in Bronfenbrenner’s papers, but 1968 is given in Roll’s own c.v. for the start of his assistant professorship there. This probably means he was initially hired as an ABD [“all-but-dissertation”] instructor and promoted upon the completion of the requirements for his Chicago Ph.D.

_____________________

Richard W. Roll

Born: October 31, 1939

1961, B.A.E. (Aerospace Engineering), Auburn University, 1961
1963, M.B.A., University of Washington
1968, Ph.D., University of Chicago

Ph.D. thesis. The Behavior of Interest Rates: An Application of the Efficient Market Model to U.S. Treasury Bills awarded the Irving Fisher Prize as best American dissertation in economics (1968).

 

1961-64 The Boeing Company, Seattle and New Orleans, Aeronautical Engineer

1968-73 Carnegie-Mellon University, Pittsburgh, Assistant and Associate Professor

1973-75 European Institute for Advance Studies in Management, Brussels, Belgium, Professor

1975-76 Centre d’Enseignement Superiéure des Affaires, Jouy-en-Josas, France, Professeur Associé

1976-2014 University of California, Los Angeles, The Anderson School
Professor of Finance, Allstate Chair, 1982-2002, Japan Alumni Chair, 2002-2011, Joel Fried Chair in Applied Finance, 2011-2014, Professor Emeritus, 2014-

1985-87 Goldman, Sachs & Co., New York, Vice-President and Director of Mortgage Securities Research

1985-2005 Roll and Ross Asset Management Corporation, Culver City, CA, Co-Chairman of the Board

1992-95 WP Capital Management, Greenwich, CT, Managing Director

2002 Visiting professor, Université de Toulouse, France

2003- Founder and Principal, Compensation Valuation, Inc.

2009-2012 Co-Founder and Research Director, Factor Advisors

2014- Linde Institute Professor of Finance, California Institute of Technology

 

1987, President, American Finance Association

Fellow, Econometric Society

Source: C.V. (July 15, 2015)

Fun fact:

At Boeing the early 1960s, Richard Roll worked on the Minuteman missile and the Saturn moon rocket.

Source: Richard W. Roll webpage (Mar 16, 2020) Caltech, Division of the Humanities and Social Sciences.

_____________________

ECONOMICS OF THE FIRM

R. Roll
GI-351
Fall, 1967

TEXT: Kalman J. Cohen and Richard M. Cyert, Theory of the Firm: Resource Allocation In a Market Economy, (1965)

A mid-term exam of 1½ hours will be given the week of Nov. 4. One-fourth of the final grade will be based on the mid-term and three-fourths on the final. Problem sets will be distributed periodically. These are intended to guide you in assessing your performance and will not usually be turned in.

Readings in the list below are divided into three categories:

  1. No preceding symbol indicates a required reading.
  2. A preceding * indicates an optional reading.
  3. A preceding $ indicates material that Ph.D. students should know.

Most of the material uses basic mathematics. The non-mathematician can be helped immeasurably by referring to R.G.D. Allen, Mathematical Analysis for Economists. Students will find that a thorough reading of J. Johnston, Econometric Methods, complements this course and will also be of aid in future courses.

*  *  *  *  *  *  *  *  *  *  *  *  *

SUPPLEMENTAL TEXTS
(books)

Armen A. Alchian and William A. Allen, University Economics, (2nd edition, 1967)

R. G. D. Allen, Mathematical Analysis for Economists, (1964)

William J. Baumol, Economic Theory and Operations Analysis, (1965)

Gregory Chow, Demand for Automobiles in the United States, (1957)

Joel Dean, Managerial Economics, (1957)

Milton Friedman, Essays in Positive Economics, (1953)

J. R. Hicks, The Theory of Wages, (1963)

J. R. Hicks, Value and Capital, (1946)

H. S. Houthakker and Lester D. Taylor, Consumer Demand in the United States, 1929-1970, (1966)

J. Johnston, Econometric Methods, (1960)

J. Johnston, Statistical Cost Analysis (1960)

Richard H. Leftwich, The Price System and Resource Allocation, (1960)

Edwin Mansfield, Managerial Economics and Operations Research, (1966)

Alfred Marshall, Principles of Economics, Ninth (Variorum ) edition, (1961)

James Quirk and Rubin Saposnik, Introduction to General Equilibrium Theory and Welfare Economics, (1968)

Paul A. Samuelson, Foundations of Economic Analysis, (1963)

Ezra Solomon, The Management of Corporate Capital, (1959)

Milton H. Spencer and Louis Siegelman, Managerial Economics, (1964)

George J. Stigler, Essays in the History of Economics, (1965)

George J. Stigler, The Theory of Price, (1967)

Leon Walras, Elements of Pure Economics, (1954)

Leonard Weiss, Case Studies in American Industry, (1967)

John Kenneth Galbraith, The New Industrial State, (1967)

 

PERIODICALS

American Economic Review, (December, 1948), (June, 1964)

American Economic Review, Papers and Proceedings, (May, 1954) (June, 1958) (May, 1961)

Journal of Business, (October, 1955) (April, 1965)

Journal of Political Economy, (April, 1954) (Feb, 1957) (August, 1958)

Quarterly Journal of Economics, (August, 1967)

*  *  *  *  *  *  *  *  *  *  *  *  *

  1. Introduction to the Economic Problem, Resource Allocation

Text, Ch. 1
*Leftwich, pp. 1-22.

  1. The Methodology of Model Building

Marshall, pp. 29-37.

Text, Ch. 2
*$ “The Methodology of Positive Economics” in Friedman
*J. Johnston, Econometric Methods, pp. 3-39. (This reading requires an elementary knowledge of probability).

  1. The Fundamentals, Supply and Demand
    1. Price determination under perfect competition.

Text, ch. 4

*Weiss, “Pure Competition and Agriculture”, pp. 19-50
*Alchian and Allen, ch. 7
$George Stigler, “Perfect Competition, Historically Contemplated”, Journal of Political Economy, (Feb., 1957), reprinted in George J. Stigler, Essays…
*An example of model building and demand analysis, Gregory Chow, Demand for Automobiles in the United States

    1. Theory of Cost and Production
      1. Alternative costs

Stigler, Theory of Price, ch. 6

*W. Lee Hansen and Burton A. Weisbrod, “Economics of the Military Draft”, Quarterly Journal of Economics, (August 1967) Mimeographed copies on reserve.

      1. Theory of Production

Text, chs. 6-8

$Marshall, pp. 337-380
*Stigler, Theory of Price, chs. 7-8
$Samuelson, Foundations, ch. IV

      1. Estimating Cost Curves

Johnston, Statistical Cost Analysis, pp. 26-73

*Joel Dean, pp. 278-347
*Johnston, Statistical…pp. 136-194
$Apel, “Marginal Cost Constancy and its Implications”, American Economic Review, December, 1948

      1. Temporal cost allocation

Alchian and Allen, chs. 13-14

    1. Theory of Consumer Demand
      1. Utility Theory

Text, pp. 65-83

$J. R. Hicks, Value and Capital, chs. I-III

      1. Estimating Demand Curves

Text, pp. 83-87

*Stigler, “The Early History of Empirical Studies of Consumer Behavior”, J.P.E., (April, 1954), reprinted in Essays in the History…
*Joel Dean, “Estimating the Price Elasticity of Demand”, in his Managerial Economics, pp. 180-191. Reprinted in Mansfield, pp. 55-65.
*E.S. Houthakker and Lester D. Taylor, pp. 5-29, ch.4 presents estimated demand curves for 84 categories of personal consumption expenditures.

  1. Monopoly and Oligopoly
    1. Theory
      1. Monopoly

Text, ch. 10, pp. 187-200
Alchian and Allen, ch. 17

*Stigler, Theory of Price, ch. 11
*Galbraith, pp. 166-218

      1. Oligopoly

Stigler, Theory of Price, chs. 12-13

*Text, ch. 12

    1. Cases of monopoly

Text, pp. 200-203
Weiss, ch. 4

*Arnold C. Harberger, “Monopoly and Resource Allocation”, American Economic Review Papers and Proceedings, (May, 1954)

    1. Pricing and Advertising
      1. *Rules of thumb — Joel Dean, pp. 427-467
      2. $Peak-Load Pricing — Jacques Dreze, “Some Postwar Contributions of French Economists”, American Economic Review, (June, 1964), pp. 8-27. This article is bound in the back of the AER, Vol. 54, part 2.
      3. Advertising

Lester G. Telser, “How Much Does It Pay Whom to Advertise”, American Economic Review, Papers and Proceedings, 1961, pp. 194-205

*Kristian S. Palda, “The Measurement of Cumulative Advertising Effects”, Journal of Business, (April, 1965)

  1. Demand and Supply of Productive Services
    1. Theory

Stigler, Theory of Price, ch. 14
Text, Ch. 13

*Marshall, pp. 381-393

    1. Capital

Stigler, Theory of Price, ch. 17
Ezra Solomon, “Measuring a Company’s Cost of Capital”, Journal of Business, (October, 1955) reprinted in The Management of Corporate Capital, Ezra Solomon, ed.

$ Jack Hirshleifer, “On the Theory of Optimal Investment Decision,” Journal of Political Economy, (August, 1958) reprinted in Solomon
$Fraco Modigliani and Merton H. Miller, “The Cost of Capital, Corporation Finance and the Theory of Investment”, American Economic Review, (June, 1958) reprinted in Solomon

    1. Labor

Alchian and Allen, ch. 20

*Weiss, ch. 6
$Hicks, Theory of Wages, ch. I-III
*Alchian and Allen, ch. 21

  1. General Equilibrium, Welfare Economics and Government Participation in the Market Place

Baumol, ch. 13
Alchian and Allen, ch. 24
*Text, chs. 9, 14
$Walras, pp. 153-172
$Quirk and Saposnik, ch. 2
*Weiss, Ch. 3

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Martin Bronfenbrenner. Box 25, Folder “Micro-econ and Distribution 1 of 2, 1966-1971, n.d.”.

Image Source: Richard Roll in the Auburn University Yearbook, 1960 Glomerata, p. 134

Categories
Berkeley Chicago Columbia Economists Fields Oxford Socialism

Chicago. Nutter ranks Soviet economy experts in reply to Friedman, 1962

 

From the January 1962 exchange of letters between Milton Friedman and G. Warren Nutter transcribed below, we learn that the University of Chicago was interested in potentially hiring some academic expert on the Soviet economy. Friedman asked Nutter to rank three possible candidates of interest. Nutter did just that and threw in a fourth name.

Long before turning to the history of economics as my major research interest, I entered academic economics in the field of comparative economic systems. One of the candidates mentioned in the correspondence, Francis Seton, wrote a signed [!] positive referee report for my 1986 article in the Journal of Comparative Economics, “On Marxian value, exploitation, and the transformation problem: A geometric approach“, that I honestly regard as one of my pedagogical high-water marks. Another one of the 1962 candidates, Gregory Grossman, was one of the distinguished outside referees to whom I owe a debt of gratitude for helping me clear the tenure hurdle at the University of Houston. It is a real pleasure to be able to add his Berkeley memorial and picture to this post.

___________________

Gregory Grossman (1921-2014)
IN MEMORIAM by Gerard Roland

Gregory Grossman, born in July 1921 in Kyiv, Ukraine, passed away on August 14, 2014. Grossman was one of the world’s most highly reputed scholars of the Soviet economic system. He was considered a towering figure in the study of the Soviet economy. His scholarly work shaped the thinking of generations of scholars in the US and throughout the world.

In early 1923 his family fled post-Russian Revolution chaos and famine and took a month-long journey on the Trans-Siberian Railway to Harbin, Manchuria. After completing high school in 1937 in Tientsin, China, he boarded a Japanese ocean liner en route to attend UC Berkeley where he completed his B.S. and M.A., respectively in 1941 and 1943. During World War II, Grossman served as artillery observer with the 731st Field Artillery Battalion during the Battle of the Bulge and completed his war duty in Czechoslovakia. He received a PhD in economics from Harvard University in 1953. He was a faculty member of the Department of Economics at Berkeley from 1953 until his retirement in 1992.

Grossman was the author of several books and many highly influential articles. He made key contributions to the understanding of the Soviet economic system. In a classic article, “Notes for a Theory of the Command Economy” (Soviet Studies, 1963), he coined the concept of the “command economy” to characterize the central planning system, where production and investment were guided by the commands of the communist party elite and where managers at all levels of the planning system strove to implement the commands embodied in the plan targets. In such a system, prices and money play no active role and serve only as accounting units. In such a system, autonomy of agents must be curbed to favor the implementation of plan commands. As his former student, Pennsylvania State University professor Barry Ickes, has noted: “His formulation of the command economy hypothesis provided the framework used by scholars of several generations.”

In an equally famous article “The ‘Second Economy of the USSR” (Problems of Communism, 1977), he also coined the complementary concept of the “second economy.” Because of the imbalances and shortages inherent in a necessarily imperfect planning system, decentralized forms of market exchange, though illegal, were necessary to correct the allocative mistakes of the command system. Grossman worked with professor Vladimir Treml of Duke University and others to conduct more than a decade of research on all aspects of this second economy, gathering massive amounts of evidence based on interviews with emigres from the Soviet Union. He had garnered detailed evidence on the extent of the second economy and on prices of goods and services in various locations of the USSR.

Grossman’s analysis of the Soviet economic system proved extraordinarily prescient. Over time, as the economic system became more complex, the second economy tended to expand and corrode the command system, which eventually collapsed while managers of state-owned enterprises appropriated the assets they controlled in a process of spontaneous privatization. This was the starting point of the transition to the market economy that was studied by the next generation of scholars.

Grossman was awarded in 1991 a lifetime achievement award from the American Association for the Advancement of Slavic Studies. Citing Grossman’s works on the “command economy” and the “second economy,” the award also noted his earlier, path-breaking book, Soviet Statistics of Physical Output of Industrial Commodities (1960), saying that the book “provided the profession with basic rules for working with distorted Soviet economic statistics and avoiding the many pitfalls of that enterprise.”

A colleague at Berkeley, Benjamin Ward, said there was a period in the Cold War of maybe 20 years in which Grossman “was the most knowledgeable person in the world about the Soviet economy.”

Grossman was an appreciated teacher. For decades, he taught the main undergraduate course on the Soviet economic system. He also supervised throughout his career a great number of graduate students who later became themselves well-known scholars of Eastern European economies.

Grossman was a polymath who had a deep understanding of the political, ideological, social and cultural underpinnings of economic life in the Soviet Union. As a result, he was widely sought out by his peers for comments on their scholarship. He was also known to be a consummate gentleman. He remained calm and composed in all circumstances and was known for his great sense of humor and generosity.

Family members said that, while he traveled widely, he had a particular love for Berkeley and the Bay Area’s lifestyle, culture, beautiful vistas and good weather.

In 1952 he married Cynthia Green and they had two children, Joel Grossman of Kuala Lumpur, Malaysia, and Amy Di Costanzo of Berkeley, California. In 1972, he married Joan Delaney, a UC Berkeley professor of Slavic Studies who stayed by his side until his death. He is survived by her; by his two children, six grandchildren and one great granddaughter.

Source: Senate of the University of California, Berkeley.

___________________

Francis Seton (Guardian obituary)

Francis Seton
An economist of ideal prices
By Maurice Scott

He was born Franz Szedo in Vienna, in the wake of the collapse of the Austro-Hungarian empire after the first world war. He was an only child; his parents had been born in Hungary, and were then citizens of Austria and had converted from Judaism to Christianity. His father ran a paper processing business in central Vienna, and Francis was educated there until 1938, when the Nazis were moving to annex Austria.

His interests lay in music and foreign languages, the latter taking him on visits to France and Britain. His parents, concerned at the Nazi threat, thought he should complete his studies abroad, and Francis contacted Balliol College, Oxford, when visiting England in 1937.

In March 1938, Germany invaded Austria. His father managed to arrange for Francis to go at once to London. Soon after, his parents also left Austria and Francis lost touch with them, fearing that they could be dead. But this story has a happy ending. In 1946 he learned that they had survived in Hungary.

From 1938 Francis read politics, philosophy and economics at Balliol, but by summer 1940 paranoia was widespread and he was classified as an enemy alien, albeit in category C, for those considered to pose the least danger. He was shipped to Canada in dreadful conditions.

By 1941 he was given the choice of freedom in Canada or return to Britain. As he wanted to fight the Nazis, he volunteered for His Majesty’s forces. Being still classed an enemy alien, he was allowed to join only the dogsbody Pioneer Corps. He met other aliens, including Arthur Koestler, Robert Maxwell and, most notably, a Russian soldier, who fired his interest in the language and the country.

By 1942, Francis was able to transfer to the Somerset Light Infantry, on detachment to Bicester. There, in spare moments he studied for an Oxford degree in Russian language and literature, helped by a refugee from the Bolshevik revolution who was at St Hugh’s, and this led, in 1946, to first class honours. In 1942, having been rejected on medical grounds as a glider pilot, his flair for languages led to a transfer to the Intelligence Corps.

In 1948, back at Balliol, Francis finally graduated with a first in PPE and became a British subject, having changed his name earlier. He was awarded a state studentship, to study the Soviet economy, the subject of his doctoral thesis. In 1950, he was elected to a Nuffield College research fellowship, followed by an official fellowship in 1953. He moved on from his interest in the Soviet Union to other countries in the developing world, and travelled widely. Eventually he became senior fellow, and took the lead in the election of two of Nuffield’s wardens.

Francis was immensely talented. His English literary style was a delight. He was multilingual, poetic, musical, and could play the piano with brilliance. For all this, and above all for his humour and friendship, he will be remembered.

He is survived by his wife, three children and nine grandchildren.

Francis Seton (Franz Szedo), economist, born January 29 1920; died January 7 2002.

Source:  The Guardian, March 21, 2002.

___________________

BIOGRAPHICAL NOTE: Alexander Erlich

Alexander Erlich was born in St. Petersburg, Russia, in 1912. In 1918, shortly after the outbreak of the Bolshevik Revolution, his family immigrated to Poland where his father, Henryk, became a leader of the Jewish Labor Fund. After the execution of his father in 1941, Erlich and his family fled to the United States. Influenced by his father’s work and the political atmosphere of his youth, Erlich began his study of economics at Friedrich-Wilhelm University in Berlin and the Free Polish University in Warsaw. He completed these studies after moving to the US, earning his PhD from the New School for Social Research in New York City in 1953. His doctoral dissertation, The Soviet Industrialization Controversy, was the basis for his best known work, The Soviet Industrial Debate, 1924-1928, published in 1960. His lifelong devotion to the study of Soviet economic conditions and policies found Erlich a home at Columbia University. Beginning as a visiting lecturer in 1955, he received a tenured position as professor in 1959. He retired in 1981 only to return as a part-time lecturer and professor at Columbia University and Barnard College in 1982. Erlich died of a heart attack in January 1985 at the age of 72.

Source: Columbia University Archival Collections. Alexander Erlich papers, 1953-1985.

___________________

Obituary of Eugène Zaleski (1918-2001)

Slavic Review 61, no. 3 (Fall 2002), 681-682.

___________________

Arcadius Kahan (1920-1982)

After his arrival in the United States he earned a Masters in 1954 and Ph.D. in 1958 in Economics from Rutgers University.

He joined the Economics faculty at the University of Chicago in 1955. As a member of the Economics Department at the University of Chicago, Kahan straddled a fine line between the principles which he brought from his socialist youth and the neoclassical school of economic thought associated with the Department. He won the confidence of Milton Friedman with his work on the economic effects of the persecution of Jews in 19th century Russia. Kahan concluded that this had a significant impact on Russia’s economic backwardness, particularly as compared with western Europe. He argued that this was an example of dysfunctional governmental interference in the economy, which drew on the methodology of the neoliberals in the Chicago school.

Source: Arcadius Kahan, Wikipedia.

___________________

Carbon Copy of Letter
from Friedman to Nutter

January 16, 1962

Professor G. Warren Nutter
Department of Economics
University of Virginia
Charlottesville, Virginia

Dear Warren:

There is again some talk around here of getting a Russian expert and various names have come up in the discussion. Three names that seem to stand out are Seton, Grossman, and Alex Ehrlich [sic]. I wonder if I could impose on you to send me a brief and frank note on these three people in terms of their scientific capacities in general as well as their special competence in the Russian field.

As you may know, what is involved here is part of a broader program than one that the Department alone is involved in. I have no special responsibility for this and am just writing as a member of the Department.

I do not know what has happened with respect to Kahan. I know that the College here has proposed making him a permanent tenure offer. The Department while expressing concurrence in this has not been willing to make this a joint appointment. I know neither whether the appointment has been approved by central administration nor whether Kahan has accepted it. Needless to say, this is all highly confidential.

Trust things are looking up for the Center. Best regard and wishes.

Sincerely yours,

Milton Friedman

MF:mp

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

Nutter’s Reply to Friedman

University of Virginia
James Wilson Department of Economics
University Station
Charlottesville, Virginia

January 24, 1962

Professor Milton Friedman
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Milton:

I am glad to give my opinion on Seton, Grossman, and Erlich if it can be of help in the current deliberations of your department. I can indicate at the start that I consider Grossman to be the best of the three alternatives for reasons that will emerge from my comments.

I know Seton from his work, from listening to papers he read in England, and from various personal contacts with him. Seton writes with a lucid and interesting style as so many scholars trained in England do, but as is so often also the case the content does not measure up to the form. Most of his work, both analytical and empirical, seems to me to be quite superficial. As far as I know, he has not yet done a single piece of really serious research on an important problem. His one effort in the field of measuring industrial production has, in my opinion, received far mor attention than it deserves, aside from being wrong and misleading. In brief, I believe Seton still has to prove himself an original scholar of depth.

This cannot be said of Alex Erlich, whose work I know firsthand from his participation in the early stages in the N.B.E.R. project. Erlich has done some very creditable research, resulting in one book (his doctoral dissertation) and joint authorship of several other research papers of varying length. His major weakness on the empirical side is that he is somewhat slow and lazy, requiring continuous prodding to get work done. It is for this reason that most of his work has been done under somebody’s supervision. He has considerable difficulty in expressing himself orally, speaking very slowly and haltingly, but this does not carry over at all into his written work, which is generally clear and precise. Finally, he is weak and poorly trained on the theoretical side.

Grossman is clearly the most able economist in this group, and in addition he expresses himself extremely well. If anything, like Seton, he writes too well, being tempted to substitute pen and paper for thorough research. The only solid piece of research that he has done so far is the book that he wrote for us in the N.B.E.R. project. At the same time, he must be recognized as an able technician, thoroughly versed in economic theory and capable of making important contributions in the field of Soviet studies. The only problem to date is that he has not fully lived up to promise.

I should say that all three men are highly knowledgeable as far as detailed workings of the Soviet system are concerned, Erlich and Grossman probably more so than Seton. They are all three very agreeable and cooperative persons and would fit in well with any group of first-rate economists.

There is one person, less well known that the three you are considering but in my opinion very able, whom you should consider for this position. He is Eugene Zaleski, a Pole by birth but now a French citizen. While not an outstanding theoretical economist, he is the soundest person I know among Soviet specialists in interpretations of the working of the Soviet system. He is currently working on a long-range project on the Soviet planning mechanism and the relation between plan and outcome, the first volume of his work being scheduled to appear shortly. Unfortunately, he has been caught up in the French research apparatus with all the inevitable handicaps on successful individual research. Given the right opportunity, I feel that Zaleski could develop into an outstanding scholar in the field of Soviet studies. Among other things, he has a very quick and receptive mind, and he is a pleasure to work with.

I hope these brief comments will be of some use to you. To repeat, I think Grossman would be the best bet of the three persons you mentioned.

As to the Center, things are definitely looking up. We have already received since the conference $25,000 in essentially unrestricted grants, and the Lilly Endowment was most cordial and receptive to my pleadings and probably will contribute something.

Cordially,
[signed] Warren
G. Warren Nutter

GWN:jas

 

Source: The Hoover Institution Archives. Papers of Milton Friedman, Box 31, Folder 16 “Nutter, G. Warren.”

Image Source:  Gregory Grossman, Authority on Soviet Economy, Gregory Grossman, Passes Away, UC Berkeley News. August 25, 2014.

Categories
Chicago Economists

Chicago. Paul Douglas pleads for a staff position for Arnold Tolles, 1928

 

Newman Arnold Tolles (1903-1973) has already been included in our series “Meet an economics Ph.D. alumnus/a” as a 1932 Chicago Ph.D. From my research in the University of Chicago archives, I came across the following letter of recommendation written by Paul Douglas on Tolles’ behalf that I now add to the collection of artifacts.

Fun Fact: Virginius Frank Coe mentioned in the memo by Douglas below later attained infamy as “a United States government official who was identified by Soviet defectors Elizabeth Bentley and Whittaker Chambers as being an underground member of the Communist Party and as belonging to the Soviet spy group known as the Silvermaster ring.” [See: Wikipedia, “Virginius Frank Coe”]

________________________

The University of Chicago
The School of Commerce and Administration

May 14, 1928

Memorandum to: L.C. Marshall
From: Paul H. Douglas

Subject: TOLLES

I have gathered that you are not certain whether Tolles should be retained, and I am writing to express my very deep hope that we may keep him on our staff. I certainly feel that Tolles is one of the most promising youngsters in the country. He and Virginius Coe have been the two best undergraduates whom I have ever had. Tolles has benefited enormously by his work at Harvard and London. He was, as you know, the best man in his class at Harvard and made a very real impression on Taussig and Allyn Young. He also did good work at London from all that I can learn. He has been doing most interesting research work with me this year, testing the question as to whether the system of unemployment insurance in England so maintains wage rates as to throw such a heavy burden on industry that it cannot recover. The question is the basic one as to whether unemployment insurance does not in itself increase unemployment. This has involved in [sic] a series of very interesting detailed studies. We are planning a joint reply to Pigou in the autumn and in preparation of this, Tolles has computed for it an index of production for Great Britain, based on the British census of production for 1907-1923. He has used Fisher’s ideal formula and has made some very interesting contributions to statistics as well as to the detailed subject itself. I look to see Tolles’ articles when they appear next year make a real stir and I think in four or five years he will be recognized as one of the solid men in his field. He is just the sort of man I should like to see retained on the staff, and I hope very much that it may be possible to do so. Some time if you like I should like to talk fairly intimately on the possibility of making a place for him.

[signed]
P H Douglas

Source:  University of Chicago Archives. Department of Economics Records. Box 6, Folder 6.

Image Source:  Senior picture of Newman Arnold Tolles from University of Chicago, Cap and Gown 1924, p. 139.

Categories
Chicago Economists Exam Questions

Chicago. Economic Price Theory Prelim Exam taken by Zvi Griliches. Winter quarter 1955.

 

With this post Economics in the Rear-view Mirror adds two more preliminary exams from the University of Chicago (here, from the Winter Quarter of 1955) to its growing collection of artifacts that provide us a digital record of economics education through the years. The original document was found in Milton Friedman’s files which provide us the additional information of the names of the examination committee as well as names, together with Friedman’s own test scores and his answers to the True-False questions. Of interest to note: Zvi Griliches not only attained the greatest number of points awarded by Friedman (120 points of 185 possible points), but he finished far ahead of the rest of the pack–the second highest exam only received 86 points which incidentally was more than enough to clear this PhD requirement. The Committee failed two students and four students passed the exam for the M.A. degree. Milton Friedman appears to have been the toughest grader of the three members of the Committee.

_____________________________________

Economic Theory Examination Committee:
M. Friedman, chairman; F. H. Knight; D. G. Johnson.

There were 13 examinees for Economic Theory I. These included Zvi Griliches (who incidentally blew the top off the curve according to Friedman’s grades) and Walter Oi.

Griliches Interview with Alan Krueger and Timothy Taylor from June 21, 1999.
Memorial blogpost for Walter Oi by Steve Landsburg on December 26, 2013

There were 2 examinees for Economic Theory II.

_____________________________________

Previously transcribed and posted Preliminary and Field Exams
from the graduate program of the University of Chicago

Economic Theory I and II. Summer 1949
Economic Theory I and II. Summer 1951
Economic Theory I and II. Summer 1952
Economic Theory I. Summer 1955
Economic Theory I and II. Winter 1955
Money and Banking. Summer 1956
Economic Theory. Winter 1957
Money and Banking. Summer 1959
Economic Theory (Old Rules). Summer 1960
Price Theory. Winter 1964
Income, Employment and Price Level. Summer 1967
Money and Banking. Summer 1967
Price Theory. Winter 1969
Income, Employment, Price Level. Winter 1969
Money and Banking. Winter 1969
International Trade. Winter 1970
History of Economic Thought. Summer 1974
Price Theory. Summer 1975
Industrial Organization. Spring 1977
History of Economic Thought. Summer 1989

_____________________________________

Economic Theory I
Preliminary Examination
Winter, 1955
[Milton Friedman’s answers in square brackets]

Time: 4 hours.

Write your number and not your name on your examination paper. Please be brief in your replies.

  1. (30 points) Indicate whether each of the following statements is True, False, or Uncertain and justify your answer briefly.
    1. [False] Production of a commodity occurs under conditions of fixed proportions. The supply curve for A shifts to the right. It is to the advantage of the owners of A that expenditure on A shall have represented a small part of total costs.
    2. [False] A firm will not carry on production at a given level of output, if one factor exhibits increasing average returns at that output level.
    3. [appears to be False with True crossed out] When a firm is in equilibrium, the ratio of the price of a factor to the marginal physical product of the factor determines the marginal cost of production.
    4. [True or Uncertain] If the demand for output is perfectly elastic, a decline in the price of factor A will always increase the demand for factor B unless A and B are perfect substitutes (only two factors employed).
    5. [True] If the demand for output is less than perfectly elastic, a decline in the price of A may either increase or decrease the demand for factor B.
    6. [False] If a monopsonist is not a monopolist, it is possible to construct the monopsonist’s demand curve for a factor.
    7. [False] If all the factors used by a firm are paid the value of their marginal products, the sum of the payments will equal the total receipts of the firm.
    8. [False] If all factors are paid the value of their marginal products, it would not be possible to increase total real output of the economy by any change in the allocation of factors.
  2. (15 points) In an article on the British tobacco industry, the Economist remarked:
    “Since 1938 the industry has had to contend with a sixfold rise in the standard rate of tobacco duty, and a three- to fourfold increase in the average cost of its principal raw material—this includes the higher cost of dollar leaf bought since sterling devaluation. All eight duty increases have been automatically passed on to the smoker, but if duty is left out of account the increase in cigarette prices since 1938 has been no more than about 85 per cent.”
    What do you take “passed on” to mean in this sentence? What is its relation to the economic concept of “incidence”? What inference, if any, would you draw about the latter?
  3. (20 points) Assuming that a monopolist always fixes price so as to maximize profits, can the price of a commodity ever be lower when it is monopolized than when it is competitively produced?
  4. (30 points) Trace the development of the theory of consumer choice. Include in your answer an explanation of (a) the meaning attached by Smith to “effectual demand”, (b) the role assigned by Ricardo to demand in determining prices; (c) Jevons “the final degree of utility determines price”; (d) the contribution of Edgeworth, Fisher, and Pareto.
  5. (20 points) It is widely asserted that workers have less “bargaining power” than employers because there are more workers than employers. Discuss.
  6. (25 points) Discuss the following concepts (a) the “postponement” of consumption said to be involved in saving and investment, (b) “abstinence”, (c) “time preference”, (d) the “marginal efficiency of investment”, (e) the “marginal efficiency of capital”.
  7. (45 points) For each of the following methods of financing radio and television programs, indicate how the resulting structure of programs differs from the optimum: and under what conditions, if any, it would be an optimum. In interpreting “optimum”, assume that the only consideration is direct private benefit from the programs; neglect distributional effects, i.e., treat it as a purely allocative problem; and assume that there are no such public issues involved as “education” or “indoctrination”. On the technical side, assume throughout that there are a narrowly limited total number of frequencies or channels available in any one area. Make your answer as definite as possible in terms of the kind of people whose tastes are or are not catered to appropriately, the kinds of programs that are too numerous or too sparse, etc. In answering the question, assume throughout that it is possible without cost to know exactly the number and kind of people who listen to each program.
    1. The existing U.S. method of selling time to advertisers.
    2. Imposition of an annual license tax or fee on each set; auctioning off of time to private program producers; compensation of these producers by giving to each a share of the total tax collection equal to the fraction of total listener time devoted to his programs. Assume that advertising is forbidden.
    3. Some mechanical method whereby a subscriber can receive a particular program only if he pays through a coin-box arrangement for that particular program. The programs are to be provided by private producers who receive the payments, who buy time on the stations, as in the preceding case, and who can determine the amount charged for the programs they produce. Once again, assume that advertising is forbidden.

 

 

ECONOMIC THEORY II
Preliminary Examination
WINTER 1955

Time: 2½ hours.

Note: Write only your number, not your name, on your examination paper.

Answer question 1, and two others.

 

  1. Using the Table below, explain the variations in the real income, the price level, the velocity of circulation, the government and private investment, the rate of unemployment, the ratio of savings to income, and whatever else you consider significant.

TABLE

The following figures are based on the Economic Report to the President, 1955.
Note: (a) All figures except those for item A are expressed as percentages of the corresponding 1937 figure; (b) item F is defined to be equal to “gross private domestic investment” plus “government purchase of goods and services” plus“net foreign investment”, all in 1947 prices.

 1929

1933

 1937 1941 1945 1949

1953
A. Unemployment as percentage of civilian labor force

3.2

 24.9 14.3 9.9 1.9 5.0

2.5
B. Civilian employment 103

84

 100 109 114 127

134
C. Demand deposits and currency (non-deflated) 89

67

 100 164 346 376

441
D. National income (non-deflated) 119

55

 100 142 246 294

414
E. Consumer price index 119

90

 100 102 125 166

186
F. Gross national product less consumption (in 1947 prices) 100

41

 100 160 281 165

262
G.  D/C 134

82

 100 87 71 78

94
H.  D/E 100

61

 100 139 197 178

222
I.  H/B 97

72

 100 128 172 140

166
J.  F/H 100

67

 100 115 146 93

118
  1. It is often said that the U.S. economy is less likely to suffer a severe depression today than it was twenty or thirty years ago. List and discuss major changes which have taken place which bear on this statement.
  2. Suppose the tax on capital income (dividends, interest) is increased. What will be the effect on the demand for cash if the tax proceeds are spent on: (a) aid to foreign countries; (b) federal contribution to medical aid in the United States.
  3. In the Confederate States, the ratio of bank reserves to deposits grew rapidly during 1862-64. This ratio also grew in the period 1933-37 in the Unites States. Explain these phenomena. Evaluate the action taken by the Governors of the Federal Reserve Board in 1936 and 1937, when they raised the required minimum reserve ratio.
  4. The stock of money (currency and demand deposits) per capita was about 800 dollars in June 1953 as against about 100 dollars in June 1910. Explain the increase.

Source: Hoover Institution Archives. Milton Friedman Papers. Box 76. Folder 2 “University of Chicago, Economic Theory”.

Image Source:  Zvi Griliches. University of Chicago Photographic Archive, apf1-06565, Special Collections Research Center, University of Chicago Library.

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Chicago Columbia Economists

Columbia. George Stigler reviews the department of economics, 1978

 

Somewhere between bibliometric departmental rankings and formal visiting committees lie the relatively casual responses to requests for outside opinions solicited by university administrators. In this post George Stigler provides his brief assessment of where the Columbia economics department was at the end of 1978 and what could be done to improve its relative standing.

Stigler’s message was essentially to add “More Cowbell“, i.e. outside hires of senior heavy-weights as opposed to the selection and cultivation of internal candidates for promotion.

As a former active “area expert” on the GDR economy, I am delighted to have found this explicit obiter dicta that expresses Stigler’s contempt for regional studies. 

“I also approve of [the Columbia economics department’s] conscious policy of withdrawing from the quite excessive number of special geographical area commitments into which Columbia entered.” 

Also worth noting is that Edmund Phelp’s “departure” from Columbia  lasted only 1978-79. Because of a salary dispute, Phelps left Columbia for New York University. Perhaps Stigler’s letter helped warm the Columbia administration to accepting Phelp’s terms (which they did and Edmund Phelps indeed returned the next year).

_________________________

Stigler’s View of Columbia from Chicago

December 8, 1978

Professors Louis Henkin and Steven Marcus
Columbia University
211 Low Memorial Library
New York, New York 10027

Dear Professors Henkin and Marcus:

Let me attempt to reply to your inquiries about the Department of Economics.

  1. The department was probably rated too low in 1969, and I think it is about as strong today relative to other universities, yielding a ranking around 9th or 10th. The department has suffered 2 major losses in the past decade or so (Becker and Phelps) but made a number of excellent appointments of younger people and one almost major appointment (Mundell, who dominated international trade theory in the 1960’s but has apparently stopped working). The department lacks flashy, controversial figures and this may account for its unduly low ratings. But the fact is that it is a good department.
  2. I would not quarrel with its size or general balance. I also approve of its conscious policy of withdrawing from the quite excessive number of special geographical area commitments into which Columbia entered.
  3. The department is especially strong in international trade. I consider it seriously weak in the basic fields of microeconomics and industrial organization, even though Lancaster is very good,—I would consider this its top need. There is some weakness in macroeconomics: Cagan is no longer a major figure, and Phelps’ departure emphasizes the weakness in the area. Mincer is superb in labor economics.
  4. There is strength in the intermediate levels, with good appointments such as Taylor and Calvo and Rodriguez. I do not know many of the assistant professors, and have only a mild suspicion that they are mostly not first class.

On reflection, in the last decade the department has not made a single appointment (except possibly Dhrymes and still more uncertainly Mundell) who would be considered a catch by the other major economics departments. While Harvard was getting Jorgenson and Griliches and Arrow, and Chicago was getting Becker and Lucas and Rosen, Columbia was making good junior appointments. I believe that it is a rule that a major department will make most of its senior appointments from outside, not by promotion. If I am right, the department will not rise in relative standing until it is ready and able to draw in major scholars at the height of their productive careers. It now contains major scholars such as Vickrey and Mincer—will it be able to replace them?

Sincerely,

George J. Stigler

GJS:ip

 

Source:  University of Chicago Archives. George Stigler Papers, Box 3. Folder “U of C, ECON./MISCELLANEOUS”.

Image Source: George J. Stigler, University of Chicago Photographic Archive, apf1-13366, Special Collections Research Center, University of Chicago Library.

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Cambridge Chicago Economists LGBTQ Northwestern

Chicago. Economics Ph.D. alumnus, “gay godfather” and mentor. Roger Weiss, 1955

Milton Friedman wrote a recommendation for two University of Chicago economics graduate students to receive fellowships from the Earhart Foundation in 1953. Friedman’s letter was transcribed for the previous post that focussed on Gary Becker, who was the unambiguous first choice in Friedman’s eyes. In addition to adding to our stock of economics Ph.D. alumna/us stories, Economics in the Rear-View Mirror introduces the LGBTQ label here with Friedman’s second candidate for an Earhart Foundation fellowship, Roger William Weiss (Chicago, Ph.D., 1955). 

_____________________

Roger William Weiss. (1930-1991) Dissertation “Exchange Control in Britain, 1939-1952”, Ph.D. awarded Winter Quarter 1955.

_____________________

AEA Profile from 1969

WEISS, Roger William, academic; b. Bronxville, N.Y., 1930 stud., Northwestern U., 1946-48; M.A., U. Chicago, 1951, Ph.D. 1955; stud., Cambridge U., Eng., 1951-52. COC.DIS. “The British Exchange Controls, 1939-52,” 1954. PUB. “Economic Nationalism in Britain in the Nineteenth Century” (H.G. Johnson, Ed.), Econ. Nationalism in Old and New States, 1967; The Economic System, 1969; “The Case for Federal Meat Inspection Examined,” Jour. Of Law and Econs., Oct. 1964. RES. American Colonial Monetary System. Asst. prof., Vanderbilt U., 1953-57; pres., N. Weiss & Co., Inc., 1957-63; asso. Prof., U. Chicago since 1966. ADDRESS 1415 E. 54th St., Chicago, IL 60615.

Source: The American Economic Review, Vol. 59, No. 6, 1969 Handbook of the American Economic Association (Jan., 1970), p. 467.

_____________________

U. of Chicago obit for Roger W. Weiss

Roger Weiss, AM’51, PhD’55, professor in the social sciences since 1963, died March 7. His specialty was the role of economics in the arts and the international trade of art works. His books included The Economic System and The Weissburgs: A Social History, a history of his own family. He was also a member of the governing board of the Chicago Symphony Orchestra. Survivors include his mother, Irene, and a brother, John.

Source: University of Chicago Magazine, Vol. 83, No. 5, June 1991, p. 44.

_____________________

Roger Weiss and his partner, Howard Brown, in the University of Chicago gay community

Roger Weiss AM 1951, PhD 1955. Professor in the College and division of social sciences. Partner Howard Mayer Brown (1930-1993), Ferdinand Schevill distinguished service professor of music.

Professors Howard Brown and Roger Weiss were “out” by many standards. The University agreed to a “spousal hire” for the couple in the 1960s, and the two hosted parties for gay students and faculty in their home until Roger’s death in 1991, and Howard’s death in 1993. Bob Devendorf (AB 1985, AM 2004) remembered Howard and Roger as “gay godfathers” and mentors, while John DelPeschio (AB 1972) treasured the intergenerational community they fostered: “I felt as if I were entering a more adult world.”

However, Brown and Weiss’ refusal to participate in political actions and “come out” in the broader public sphere sometimes frustrated younger gay men like Wayne Scott (AB 1986, AM 1989), as he describes in this article. Jim McDaniel (AB 1968) remembers Howard saying “I don’t really care what anybody knows, I just care what I have to admit.”

Source: Closeted/OUT in the Quadrangles. A History of LGBTQ Life at the University of Chicago

 

Image Source: Senior year picture of Roger W. Weiss from the 1946 Hyde Park High School Yearbook, The Aitchpe.

 

Categories
Chicago Economists

Chicago. Friedman recommends Becker and Weiss for Earhart Fellowships, 1953

 

The following letter of recommendation by Milton Friedman provides us a glimpse of the young Gary Becker. It is also interesting to observe the language used to describe potential superstardom as opposed to more conventional stardom in economics. The next post will provide career information for the “other candidate”, Roger Weiss.

______________________

THE UNIVERSITY OF CHICAGO
Chicago 37, Illinois
Department of Economics

January 27, 1953

Mr. James A. Kennedy
Earhart Foundation
First National Bank Building
Ann Arbor, Michigan

IN RE: BECKER, Gary S.

Dear Mr. Kennedy:

I am writing at the suggestion of Professors William Paton [University of Michigan] and John Van Sickle [Wabash College] to propose two young men for Earhart fellowships in economics: Gary Becker and Roger Weiss.

Gary Becker is a young man who received his A.B. from Princeton. He was recommended to us by his Princeton teachers for a departmental fellowship in terms that we found hard to take really seriously—the best person that we have had in the last ten years; the best student that I have ever had, and the like. After observing him closely for the past year and a half, I am inclined to use similar superlatives: there is no other student that I have known in my six years at Chicago who seems to me as good as Becker or as likely to become an important and outstanding economist. Though only twenty two years old now, Becker has already published one paper in the American Economic Review[*] and has collaborated with one of his teachers at Princeton in a paper published in Economica.[**] Both are first rate papers. Becker needs to do one more full year of graduate work to fulfill his requirements for his Ph.D. Our department has granted him a fellowship in the past and will again; in addition I believe he is applying for a Social Science Research Fellowship. I have asked him to summarize briefly his plans for next year, and enclose his brief statement. [not in this Hoover file]

Becker has a brilliant, analytical mind; great originality; knowledge of the history of economic thought and respect for its importance; a real feeling for the interrelationships between economic and political issues; and a profound understanding of both the operation of a price system and its importance as a protection of individual liberty. This is one of those cases in which there is just no question at all about Becker’s being preeminently qualified for one of your fellowships. I wish I could look forward to being able to find a candidate this good every year, but that is asking for too much.

Roger Weiss, the other candidate I would like to propose, is also an extremely able young man—he is not in Becker’s class, but that is a measure of Becker’s extraordinary qualities, not a reflection of Weiss. He is of the quality of the very top group of our graduate students.—the best half-dozen or so each year out of our 125 to 175 graduate students. He did some of his undergraduate work here; spent last year at Cambridge, England on a fellowship, and returned here this year for further graduate work. Another year should see him with his Ph.D. He has just turned twenty three.

Weiss has been working on a topic that he got interested in in England, namely, the operation of British Exchange controls in the post-war period. He came to the conclusion that their effectiveness was greatly overrated and their adverse effects on the efficiency of British industry greatly underrated. He is trying to see how far a more detailed study will support these judgments and permit them to be spelled out.

Weiss has an excellent mind and a thorough knowledge of price theory and monetary theory. His major interest is in problems connected with money and international trade. He is hardworking, conscientious, and productive. Perhaps his strongest quality is his ability to organize material well and to present it both in writing and speech lucidly and with some distinction. I expect Weiss to become a productive scholar and to have a most desirable influence through his writings on public policy. I have asked him, too, to prepare a brief statement of his plans, which I enclose. [not in this Hoover file]

I may say that I have checked these recommendations with my colleagues H. Gregg Lewis and Frank H. Knight, who concur in them.

Sincerely yours,
[signed]
Milton Friedman

MF-FF

[Handwritten:] P.S. This letter was written just prior to receiving yours of the 23rd. Both men do of course plan to go into University teaching.

[* “…taken from a larger essay originally submitted as a senior thesis in the department of economics and social institutions of Princeton University.” A Note on Multi-Country Trade. The American Economic Review, Vol. 42, No. 4 (Sep., 1952), pp. 558-568.]

[** The Classical Monetary Theory: The Outcome of the Discussion (with William J. Baumol). Economica, New Series, Vol. 19, No. 76 (Nov., 1952), pp. 355-376.]

Source:  Hoover Institution Archives. Milton Friedman Papers, Box 194, Folder “Earhart Foundation…”.

Image Source:  Becker-Friedman Institute for Economics at the University of Chicago. Webpage “About Our Legacy”.

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AEA Berkeley Chicago Cornell Economist Market Economists Johns Hopkins M.I.T. Princeton Stanford Yale

M.I.T. Memo regarding potential hires to interview at AEA Dec meeting, 1965

 

This artifact provides us a glimpse into the demand side of the market for assistant professors of economics in the United States as seen from one of the mid-1960’s peak departments. The chairperson of the M.I.T. economics department at the time, E. Cary Brown, apparently conducted a quick survey of fellow department heads and packed his results into a memo for his colleagues who in one capacity or the other would be attending the annual meeting of the American Economic Association held in New York City in the days following the Christmas holidays of December 1965. The absence of Harvard names in the memo probably only indicates that Brown presumed his colleagues were well aware of any potential candidates coming from farther up the Charles River.

From Brown’s memo, Duncan Foley (Yale) and Miguel Sidrauski (Chicago) ended up on the M.I.T. faculty as assistant professors for the 1966-67 academic year. John Williamson was a visiting assistant professor that year too.

_____________________________

Dating the Memo

The folder label in the M.I.T. archives incorrectly gives the date Dec. 28-30, 1969, where the 1969 has been added in pencil.

Two keys for dating the memo.  Brown’s comment to John Williamson (York): “Wants a semester here, Jan.-June 1967″.  “Solow is hearing paper at meetings” (Conlisk of Stanford) who presented in the invited doctoral dissertation session “The Analysis and Testing of the Asymptotic Behavior of Aggregate Growth Models” (affiliation given as Rice University (Ph.D., Stanford University) where Solow was listed as a discussant. AEA’s 78th Annual Meeting was held in New York City at the end of December 1965.

_____________________________

Memo from E. Cary Brown to M.I.T. faculty going to Dec. 1965 AEA meeting

[Pencil note: “Put in beginning of 1966-7”]

Memorandum Regarding Personnel Interviews in New York

To: Department Members Attending AEA Convention
From: E. C. Brown

University of Chicago

Sidrauski, Miguel (26). International Trade, Monetary Theory, Economic Growth, Mathematical Economics

Thesis—“Studies in the Theory of Growth and Inflation” under Uzawa
References: Harberger, Johnson, Lewis

[He came here a year ago to ask about a short-term appointment before he returned to Argentina. Griliches believes him to be tops. Had him in class myself and he was first rate. Called him on phone last week and he still wants to be had.]

 

Thornber, Edgar H. (24). [H. = Hodson] Econometrics, Mathematical Methods, Computers

Thesis—“A Distributed Lag Model: Bayes vs. Sampling Theory Analyses” under Telser
References: Griliches, Zellner

[Supposed to be equal of Sidrauski. Heavily computer oriented. Doesn’t sound interesting for us, but we should talk to him.]

 

Treadway, Arthur. Mathematical Economist

Thesis on the investment function

[A younger man who, according to Svi [sic], regards himself as the equal of the above. Stronger in mathematics, and very high grades. Wasn’t on market because thesis didn’t appear as completable. Now it seems that it will be and he wants consideration.]

 

Evenson, Robert E. (31). Agricultural Economics and Economic Growth, Public Finance

Thesis—“Contribution of Agricultural Experiment Station Research to Agricultural Production” under Schultz
References: Gale Johnson, Berg

[He is just slightly below the others. Mature and very solid and combines agriculture and economic growth where we need strength.]

 

Gould, John (26).

(Ph.D. in Business School)

[Bud Fackler mentioned him as their best. Uzawa and Griliches are trying to get the Econ. Dept. to hire him. Franco knows him and is after him.]

 

Princeton

Klevorick, Alvin (22). Mathematical Economics, Econometrics, Economic Theory

Thesis: “Mathematical Programming and the Problem of Capital Budgeting under Uncertainty” (Quandt)
References: Baumol, Kuhn

[Apparently the best they have had for some time. Young and very brash.]

 

Monsma, George N. (24). Labor Economics, Economics of Medical Care, Public Finance

Thesis: Supply and Demand for Medical Personnel” (Harbison)
References: Patterson, Machlup

[Dick Lester was high on him. While not a traditional labor economist, he works that field.]

Silber, William L. (23). Monetary Economics, Public Finance, Econometrics

Thesis: “Structure of Interest Rates” (Chandler)
References: Goldfeld, Musgrave, Quandt

[One of their best four. Not sure he sounds like what we want in fields, however.]

 

Grabowski, Henry G. (25). Research and Development, Econometrics, Mathematical Economics

Thesis: “Determinants and Profitability of Industrial Research and Development” (Quandt)
References: Morgenstern, Baumol

[Lester says he is good all around man. His field makes him especially interesting.]

 

Stanford

Conlisk [John]— Economic growth and development

[Arrow has written about him, recommending him highly. His field should be interesting. Solow is hearing paper at meetings.]

 

Bradford [David Frantz]— Public finance

[Has been interviewed up here, but more should see him who wish to.]

 

Yale

Foley [Duncan Karl] (Probably not at meetings. Best Tobin’s had.]

Bryant [Ralph Clement] (Now at Federal Reserve Board. Number 2 for Tobin]

 

York

Williamson, John

[Wants a semester here, Jan.-June 1967. Alan Peacock at meetings.]

 

Johns Hopkins

[Ask Bill Oakland]

 

University of California, Berkeley

[Ask Aaron Gordon or Tibor Scitovsky.]

 

Cornell

Bridge [John L.] — Econometrics, Foreign Trade

Lindert [Peter]— International Economics

[Their two best as indicated in their letter to Department Chairman.]

 

Buffalo

Mathis, E.J. [Ask Mitch Horwitz if it’s worth pursuing.]

 

Columbia U.

[Ask Bill Vickrey]

 

Pittsburgh

Miller, Norman C. (26). International Economics; Money, Macro, Micro and Math Economics

Thesis: “Capital Flows and International Trade Theory” (Whitman)
References: Marina Whitman, Jacob Cohen, Peter Kenen, Graeme Dorrance

[Letter to Evsey Domar from Mark Perlman (Chm.) recommending him to us for further training.]

 

Source: Massachusetts Institute of Technology. Institute Archives and Special Collections. MIT Department of Economics records, Box 1, Folder “AEA Chairmen MEETING—Dec. 28-30, 1969 (sic)”.

Image Sources:  Duncan Foley (left) from his home page. Miguel Sidrauski (right) from the History of Economic Thought website.

Categories
Chicago Exam Questions

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

 

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

_______________________

Biographical Note

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

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

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

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

_______________________

ECONOMICS 370
Fall 1953
Examination, Dec. 18, 1953

Answer all questions.

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

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

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

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

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

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

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