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Exam Questions Fields Johns Hopkins

Johns Hopkins. Ten comprehensive economics PhD exams, 1965

 

 

This is what a full set (more-or-less) of written comprehensive examinations from a Ph.D. program in economics looks like as of 1965. The archival records from Johns Hopkins University are in pretty good shape for their graduate program. Earlier exams will be transcribed and posted down the road on the installment plan.

Six exams from 1961 are posted here.

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[Handwritten Note:   Christ. FULL SET EXCEPT: 1) Hist of Theory: oral 2) Ops Res: Courses.]

Ph.D. Written Comprehensive Examination in MICROECONOMICS

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 19, 1965

Candidates should answer each question; all questions are assigned equal weight.

  1. “If a price system did not exist, it would be necessary to create one.” Discuss in some detail recent developments in general equilibrium theory (i.e. in the last fifteen years) that have increased and deepened our understanding of the meaning and limitations of this aphorism.
  2. Suppose that a firm, faced with a downward sloping demand curve for its single product, is maximizing its income from sales at an output where total average cost is rising. The firm is then sold on a competitive market to the highest bidder, who—it is assumed—will also maximize his income when he operates the firm.
    1. What considerations will determine the price paid for the firm?
    2. What will be the income of the new owner from operating the firm?
    3. How will the new output compare with the old?
    4. How will the slope of the total average cost curve in its new situation differ from that in the old?
  3. In a letter to Edgeworth, Marshall once wrote: “You know I never apply curves or mathematics to market values. For I don’t think they help much. And market values are, I think, either absolutely abstract or terribly concrete and full of ever-varying (though individually vital) side-issues. Also Ox for market values measures a stock and not a ‘flow’; and I found that if I once got people to use Demand and Supply curves which discussed stocks along this axis of x, they could not easily be kept from introducing the notion of a stock when flow was essential.”
    Discuss the following: (a) the relation of the ideas expressed in this quotation to Marshall’s period analysis of the firm and industry; (b) the Walrasian treatment of the same issues; (c) the current treatments of these issues, as exemplified in good textbooks on price theory; (d) your own opinion of the validity, relevance and usefulness of the distinction which Marshall is making here.
  4. The cost of providing service on a road bridge at a certain crossing of the Chapaqua River is C = dX + e. The consumer demand for the services of the bridge may be expressed as T = f – gX, ignoring differences in types of traffic. The time spent crossing the bridge by the average user is H = a + bX + cX2, and it is assumed that the opportunity cost of the average user is valued at 80 cents per hour.
    What toll should be set on this bridge?
    (C = cost, in dollars; H = time spent on bridge, in hours; T = toll per vehicle, in dollars; X = number of vehicles using bridge; a, b, c, d, e, f, g are constants in the problem.)
  5. “The real content of the equilibrium concept is to be found not so much in the state itself as in the laws of change which it implies.” (John Chipman).
    Would you agree with this characterization? If so, why? If not, why not? Analyse the concepts which are currently used in order to derive laws of change from consideration of equilibrium states.

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Ph.D. Written Comprehensive Examination in MACROECONOMICS

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 20, 1965

[There are 180 points on the exam – allocate your time carefully.]

  1. Choose 4 from the following set of 5 questions. [Each is worth 25 points.]
    1. Suppose you were the Chairman of the Council of Economic Advisers. Outline and defend your policy program for the next year, paying particular attention to the problems of full employment, growth, stability and the balance of payments.
    2. An extremely general form of an investment function may be written as:
      I = f(y, r, k-1, I-1)
      where I = investment, y = income, r = interest rate, k = capital stock.
      Relate this to

      1. the acceleration principle
      2. the Keynes-Hansen stagnation thesis
      3. the Goodwin model of the business cycle
      4. empirical studies of investment behavior
    3. Discuss the present state of empirical knowledge concerning the nature and properties of the consumption function.
    4. Here are two statements by prominent economists:
      1. “That Keynes’ theory of under-employment equilibrium depends on the assumption of rigid wages should be clear to everybody.” G. Haberler, QJE, Nov. 1949, p. 570.
      2. “The numerous remarks throughout the literature that Keynes relied on wage inflexibilities to obtain his results are entirely unsubstantiated.”
        R. Klein, The Keynesian Revolution, 1947, p. 90.

        1. Using a macro model of your choice, present the details of this classical argument.
        2. Either (1) attempt to reconcile these opposing views,
          or (2) pick one side and defend it.
  1. Give two analyses of macroeconomic behavior, (a) for full employment and (b) for unemployment, using the equation MV = Py (or M = kPy) in each case, where M = money stock, V = 1/k = velocity of money, P = price level, y = real income.
  1. Answer all of the following 5 questions (Each is worth 16 points).
    1. “In growth models of the Harrod-Domar type, behavioral shifts toward more saving have a stimulating effect on GNP, yet in a simple Keynesian model, the opposite is true.” Is this contradiction apparent or real?
    2. Attack or defend the following proposition: “Microeconomics and macroeconomics are not two distinct fields, but are one and students should not be asked to study them separately and be examined in them separately.
    3. Briefly summarize the several empirical and theoretical arguments which support the hypothesis that the stock of money willingly held should be a function of the interest rate.
    4. Discuss briefly the “Patinkin controversy” concerning Say’s law and the quantity theory of money.
    5. “Compensatory fiscal policy must have a weaker effect in the short run if consumption depends on ‘permanent income’ than if consumption depends on current income, other things the same.” Discuss.

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Ph.D. Written Comprehensive Examination in AMERICAN ECONOMIC HISTORY

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 22, 1965

Do both questions in Section I and three out of six in Section II.

  1. a. The attached table presents information on an American industry. Discuss the technological change evident in the data. Is the pattern typical of other nineteenth century industries? Does the pattern tend to substantiate Habakkuk’s position?
    1. Choose any open question in American economic history. Discuss the current thought about this problem and propose some feasible approach to the problem which might dispel much of the uncertainty now obvious in the literature.
  2. a. The nineteenth century immigrant was attracted to the United States by the high American standard of living. Discuss.
    1. What were the principle sources of capital for industry and transportation in the pre-Civil War era?
    2. What role did the foreign sector play in American development during the nineteenth century?
    3. Except for short 3-6 year fluctuations, the rate of growth of the United States has remained relatively stable. Discuss.
    4. Discuss and evaluate one development policy followed by the government in the nineteenth century orthe governmental development policies in one area during that period.
    5. A recent proposal suggests that the growth process can be considered in three stages – each characterized by the principle constraint to growth. During the first stage growth is constrained by the insufficiency of skill, during the second by a lack of domestic capital, and during the final stage by considerations of foreign imbalance. Discuss the application of such a theory to the American experience.

Table

Year U.S. Mass. Large Firms
OUTPUT
(Physical Units)
1820 3,053 468
1831 23,046 7,923 1,264
1837 12,632 3,545
1845 17,568 4,843
1849 76,368 29,875 7,221
1855 31,500 9,165
1859 114,825 41,529 10,560
CAPITAL
(Machine Sets)
1820 215 20
1831 1,246 340 52
1837 565 136
1845 817 174
1849 3,527 1,288 254
1855 1,520 331
1859 5,235 1,673 362
EMPLOYEES
1820 153
1831 621 133 12
1837 198 28
1845 207 33
1849 980 287 45
1855 348 54
1859 1,220 385 53

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Ph.D. Written Comprehensive Examination in INTERNATIONAL ECONOMICS

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 23, 1965

3 hours, maximum points 180.

PART I (10 points each). Answer all.

  1. Explain the principle of comparative advantage, and illustrate with a diagram.
  2. Derive the expression giving the equilibrium relationship between the spot exchange rate and the 90-day forward rate in a two country model with interest rates assumed fixed in both countries.
  3. The official U.S. measure of a balance-of-payments surplus or deficit is the “overall balance.” Define the “overall balance” and indicate the principal shortcomings of this measure.
  4. Define “terms of trade” and indicate the significance of the concept.
  5. What is the “transfer problem”?
  6. Derive the expression for the change in national income resulting from an autonomous increase in exports.

PART II Answer 3 out of 5 (40 points each).

  1. Utopia is a small, highly developed country with capital (K) as its only factor of production. Utopia consumes two goods, x1and x2, and its community utility function is given by U=x1x2. Its production function for x1 is x1= a1K, and its production function for x2 is x2= a2Kb. (a1, a2, b are all greater than zero). Its endowment of capital is K. Since Utopia is a small country, it takes the world prices of x1and x2 as given.
    1. For what values of b is it certain that Utopia will produce either all x1 and no x2 or all x2 and no x1?
    2. If b = 1/2, at what world price of x2 in terms of x1 will Utopia produce only x2?
    3. If b = 1/2, at what world price of x2 in terms of x1 will Utopia produce only x1?
  2. It has been argued that a fixed exchange rate system works better the greater the interest elasticity of international capital flows, and that a flexible rate system works better the smaller the interest elasticity. Being careful to define “works better”, discuss the assumptions that might underlie this contention.
  3. “In a purely static analysis it is clear that a country, far from being annoyed, should be delighted when foreign countries “dump” their exports on world markets at low prices. But dumping invariably gives rise to cries of dismay in the country importing the dumped goods, and rightly so. A consideration of the dynamic effects of dumping leads to the conclusion that a protective tariff is justified in this case.” Discuss.
  4. “In a sense, practically all arguments for tariffs are second-best arguments. If it is desired to alter the internal distribution of income, then the “first-best” policy would be to do so by direct taxes and subsidies. If this is not possible (i.e. there is a constraint in tax policy), it may be done by tariff protection. But while this will achieve the aim it will also have side effects which are adverse, and the welfare attained with the tax constraint will not be as high as without it; indeed, welfare could fall. (Corden)
    Discuss the above contention with respect to any possible aim or aims of tariff policy other than income redistribution.
  5. “The verdict, so far, on the various attempts to test the Heckscher-Ohlin trade theory is, quite simply, ‘inconclusive’.” Discuss this with respect to the predictions of the theory and one or more of the tests to which these have been subjected.

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Ph.D. Written Comprehensive Examination in LABOR

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 23, 1965

PART I. (2 hours, 15 minutes)

  1. Why do people travel faster today than they used to?
  2. Some people believe that there has been no technological change in the education “industry”. Others believe that there has been the same rate of technical change in this area as in the rest of the economy. What implication does this have for the question of whether the rate of return on education has changed over time?
  3. G. Lewis maintains that unions have not raised wages in the U.S. by very much. Do you think this is an accurate statement? Are there any circumstances under which unions might have a substantial effect on real wages?
  4. Do you think that there are any circumstances under which the introduction of featherbedding into a collective bargaining agreement would yield a better allocation of resources?

PART II. (45 minutes)

  1. Define, and comment briefly on each of the following terms:
    1. equalizing difference
    2. secondary boycott
    3. structural unemployment
    4. productivity
    5. wage-push inflation
  2. Most Keynesian macro models include the assumption that the supply of labor is infinitely elastic, at least up to full employment, at the existing money wage. Can this macro rigid money wage assumption be reconciled with the micro assumption that only relative prices matter?

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Ph.D. Written Comprehensive Examination in LOCATION

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 24, 1965

Do all three sections.

  1. Choose an unsettled problem in location theory. Discuss and criticize the current state of the literature. How would you proceed in extending the present knowledge concerning this problem?
  2. a. How would you proceed in analyzing the factors influencing the location of a single industry?
    1. Apply your method to some industry.
  3. a. Discuss the effect of external economies on some industry. (You may not use the industry of section II, part (b).)
    or

    1. Discuss and criticize the technique used in measuring the geographical concentration of industry and regional specialization.

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Ph.D. Written Comprehensive Examination in MATHEMATICAL ECONOMICS

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 23, 1965

Answer 4 questions.

  1. The following are well-known equations summarising certain aspects of the behavior of an individual consumer
    \frac{\partial {{x}_{s}}}{\partial {{p}_{r}}}=-{{x}_{r}}\frac{\partial {{x}_{s}}}{\partial M}+{{x}_{rs}}\,\,\,\,\,\,\,\,\left( r,s=1,2,\ldots ,n \right)
    where xj, pjrepresent quantity and prices of the jthcommodity, M represents money income, and  {{x}_{rs}}=\lambda \frac{{{U}_{rs}}}{U}, where U is the consumer’s utility function.

    1. Derive the equations from a standard model of consumer behavior.
    2. Discuss the sign of the term xrr
    3. Give an interpretation of \lambda .
    4. Outline the effects on the equations of replacing U by f(U), where f´(U) > 0 for all U.
  2. Choosing any suitable general equilibrium model which involves both production and consumption, define an equilibrium for the model, set out postulates which are sufficient to guarantee the existence of the equilibrium, and sketch out the role played by each postulate in giving the guarantee of existence.
    What, in your opinion, is the function of proofs of the existence of an equilibrium?
  3. In a linear production model, there are two activities which use three resources in quantities (2, 1, 1) and (1, 3, 1), respectively, per unit activity level. The resources are available in quantities (10, 10, 5.5) at most. Receipts from unit levels of the two activities are (4,3).
    1. Set up the problem of maximizing total receipts in linear programming form.
    2. Write down the dual problem.
    3. The solution is included among activity vectors (4,2), (4.5,1), (3.25, 2.25) and dual vectors (1,0,2) (0,3,1). Identify the infeasible activity vector and the optimal activity vector, giving reasons.
    4. State the maximum prices the firm would be willing to pay for its resources.
    5. Discuss the relationship between dual variables in linear programming theory and prices in economic theory.
  4. Set out the leading properties of square non-negative matrices. Show how these properties are used in economic theory in relation to
    (a) input-out models of Leontief type, and
    (b) stability analysis of multi-market equilibrium.
  5. Carefully describe the Von Neumann growth model, interpreting its chief results and relating them to other, not necessarily linear, multisector growth models.

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Ph.D. Written Comprehensive Examination in MONEY

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 23, 1965

PART I (60 points). Indicate whether each of the following statements is true, false, or uncertain, and explain your answer.

  1. If the quantity theory holds, the level of real output and the price level are independent of the supply and/or mix of non-money financial assets.
  2. At full employment the equation of exchange goes from an irrefutable identity to a useful price-level empirical relationship.
  3. The rate of interest is purely a real phenomenon if money is neutral.
  4. The Treasury should lengthen the average maturity of the public debt when long-term interest rates are low.
  5. The demand for money is a function of the real rate of interest rather than the money rate of interest.
  6. If a commercial bank raises new capital by a common stock issue, its reserves will rise permitting a multiple expansion in the money supply.

PART II (60 points). Listed below are four proposals for new legislation. For each proposal, discuss the probable economic effects were the proposal to be enacted and indicate your views on the desirability of the proposal. (Consider each proposal separately; i.e., as you discuss one proposal assume that none of the others has been enacted.)

  1. Require the Federal Reserve to support the prices of Government securities whenever their yields reach 4 ¼ percent.
  2. Allow commercial banks to pay any interest they deem proper on demand and time deposits.
  3. Require the Federal Reserve to produce a money supply which is as close as is practicable to a 3 percent annual rate growth path.
  4. Provide that members of the Board of Governors of the Federal Reserve System may be appointed to, or removed from, office at any time by the President of the United States.

 

PART III. (60 points). Answer two.

[Handwritten note: THIS PAGE WAS NOT GIVEN. (i.e. Part III)]

  1. “Economists are frequently skeptical about the effects of price flexibility in goods markets because they feel that price declines will lead to expectations of further price declines resulting in a reduction in consumption. If expectations as to future prices of long-term bonds are determined in a similar way, the liquidity trap will not exist and, in fact, the economy will be very sensitive to changes in monetary policy.” Discuss.
  2. Today, monetary policy is generally considered to be useful for dealing with economy-wide stabilization problems but not with regional stabilization problems; overheated regions and depressed regions must be treated with different medicines. But the Federal Reserve System consists of twelve regional banks and its founders thought a regional monetary policy was possible. What economic conditions would have to prevail before a regional monetary policy would be possible?
  3. Outline the major aspects of the Gurley-Shaw hypothesis, and discuss its merits. What empirical observations would lead you to accept or reject the hypothesis? (Is the fact relevant that in recent months the rate of growth of money supply plus time deposits has remained unchanged while the rate of growth of money supply alone has declined substantially?)

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Ph.D. Written Comprehensive Examination in PUBLIC FINANCE

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 24, 1965

PART I (40 min.)

For each of the following indicate whether the statement is true, false, or uncertain, and then explain your reasoning. (Statements in parentheses may be taken as correct.)

  1. (In a suburban Los Angeles owner-occupied housing development in a recent year, real estate tax payment as a fraction of annual family income was higher for lower-income families than for higher-income families.) The foregoing fact shows that the residential real estate tax is a regressive tax.
  2. There is no advantage or disadvantage to the investor in holding tax-exempt municipal bonds because market demands will have adjusted so as to equate the after-tax yields on the two.
  3. (Available empirical evidence indicates that the after-tax rate of return on equity in the corporate sector has changed very little since the late 1920’s despite the fact that the corporate income tax rate has increased from 11% to over 50%.) From this evidence one can conclude that the effect of the tax has been to raise corporate product prices or to lower the prices of corporate-hired factors of production, or some combination of these two, so that the tax has been simply shifted away from corporate profits with no change in resource allocation.
  4. Marginal cost pricing should be employed for all public utility undertakings.

 

PART II (70 min.) Answer any 2 of the following:

  1. Discuss briefly the issues raised by the proposal of Mr. Heller (former chairman of the Council of Economic Advisers) to transfer certain Federal tax receipts to the states.
  2. Discuss briefly the consequences of Representative Patman’s proposal to finance the Great Society by a loan of $25 billion from the Federal Reserve to the Treasury at an interest rate of ¼ of 1% per year.
  3. Discuss the likely impact of the current proposal to reduce excise taxes upon
    1. The level of aggregate demand
    2. The degree of automatic stabilization of the economy
    3. The distribution of income if taxes on luxury items are eliminated.
  4. Compare, contrast, and evaluate the effects and merits of the following programs to stimulate investment:
    1. Militant easy money programs
    2. Tax inducements such as
      1. Accelerated depreciation
      2. Investment tax credits
      3. Shifts to consumption-expenditure taxation away from income taxation.

 

PART III (70 min.) Answer any 2 of the following:

  1. Indicate the role of government in promoting economic growth in the following models:
    1. Neo-classical models of economic growth à la Solow.
    2. Fixed-proportions models à la Domar.
    3. An economy where government stabilization policy is required to maintain full employment.
  2. Define a public good; a social want. What special problems do they pose to a government which is interested in both resource allocation and optimal income distribution?
  3. Two countries decide to join in an economic union. They wish to have free trade and optimal resource allocation within the union.
    1. One country has a tax system relying solely on a value-added tax and the other one has a proportional income tax. Would an adjustment to exporters or importers be necessary for these taxes?
    2. Suppose the taxes were a value-added tax and a proportional tax on consumption. Would your answer be the same?
  4. How could the government use fiscal measures to improve resource use in transportation?

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Ph.D. Written Comprehensive Examination in ECONOMETRICS

DEPARTMENT OF POLITICAL ECONOMY
THE JOHNS HOPKINS UNIVERSITY
April 24, 1965

Part I

Define or explain briefly:

  1. multicollinearity
  2. consistent estimator
  3. asymptotically efficient estimator
  4. asymptotic variance of an estimator
  5. asymptotically normally distributed estimator
  6. best linear unbiased estimator
  7. Monte Carlo study
  8. specification bias
  9. specification error
  10. autoregressive disturbances

 

Part II (answer two out of three)

  1. Write an essay on the identification problem in which you indicate (a) the definition of “identification”, (b) why the problem arose in the economic literature rather than in the broader statistical literature, (c) the relation of identification to estimation, and (d) some of the important theoretical results concerning identification criteria. In (d), be careful to state carefully the assumptions on which the results rest.
  2. Describe the two-stage least squares estimator in words. Then write down a mathematical expression for it, defining your symbols.
  3. Discuss some of the principal difficulties in estimation that are sometimes encountered when disturbances are serially dependent, and indicate under what circumstances each arises or does not arise. Indicate also what techniques (if any) are available to deal with each difficulty, and how they deal with the difficulty.

 

Part III (answer two out of four)

  1. Suppose that current consumption ct were a linear function of current expected income yet, with an additive disturbance ut that is serially independent with mean zero and constant variance. Suppose also that current expected income is a weighted average of current actual income yt and lagged expected income ye,t-1, with constant weights and with an additive disturbance vt that is independent of ut and serially independent with mean zero and constant variance. Suppose also that income is exogenous. What problems would be encountered in the attempt to obtain consistent and asymptotically efficient estimators of the slope and intercept of the consumption function described? What information and techniques would enable you to solve them? Explain.
  2. Discuss the effects of multicollinearity upon the estimation of parameters by ordinary least squares. In your discussion assume that the distribution of disturbances is spherical and that the regressor observation matrix X is fixed in repeated samples.
  3. Specify the necessary conditions under which the method of instrumental variables provides consistent estimators in circumstances where ordinary least squares fails to do so.
  4. If a regressor is correlated with the disturbance then classical least squares estimation will result in a biased estimator of the influence of variations in the regressor on variations in the regressand. What can you say about the direction and extent of this bias?

 

Source:  Johns Hopkins University, Eisenhower Library, Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 6, Box 1, Folder “Comprehensive Exams for Ph.D. in Political Economy 1947-1965”.

Image Source: From the Johns Hopkins University seal on the cover of the 1966 yearbook Hullabaloo.

Categories
Chicago Exam Questions Fields

Chicago. Money and banking prelim exam questions, 1969

 

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

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

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

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

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

Results of the examination will be sent to you by letter

Answer all questions. Time: 4 hours

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

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

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

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

  1. [40 ]

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

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

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

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

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

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

 

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

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

Categories
Exam Questions Fields M.I.T.

M.I.T. General exam questions, fiscal economics, 1963

 

The following general exam in fiscal economics was found in Evsey Domar’s papers at Duke University’s Economists’ Papers Archive. Two students apparently took this examination and were graded by Domar:  Michael Repplier Dohan (MIT Ph.D., 1969) and Silva (unable to determine first name).

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September 23, 1963

GENERAL EXAMINATION IN FISCAL ECONOMICS
THREE HOURS

Please answer THREE QUESTIONS, ONE from each part. Use a separate examination book for each question.

Part I.

  1. Write an essay on the subject of “The Effect of Built-In Stabilizers on the Growth and Fluctuations of the American Economy.”
    Explain what they are and how they work.
  2. State the economic objectives which the American Federal Government, in your opinion, should pursue at the present time and explain how well (or badly) the details of the proposed tax reduction; indicate, however, what kind of reductions you have in mind).

 

Part II.

  1. Explain as fully as you can the economic effects of a, say, 50 per cent income tax imposed on (a) corporations, and (b) all businesses. Indicate the positions taken by the authorities in the field, your own position, and methods of testing them.
  2. Abba Lerner has suggested that the best tax would be a kind of a poll tax imposed on each individual not in relation to his actual income but to his potential income (what he could earn) as estimated by the tax authorities.
    Leaving the practical aspects of this proposal aside, explain the following:

    1. What objectives was Lerner trying to accomplish by means of this unusual tax?
    2. What does this proposal tell you about Lerner’s general economic philosophy?
    3. What defects in our existing (federal) tax structure was Lerner trying to eliminate by this proposal?
    4. How would you deal with the defects indicated in (c)? Be specific.

 

Part III.

  1. Explain as fully as you can the objectives to be pursued and the problems likely to be encountered by recurrent deficit financing (an excess of expenditures over receipts) if practiced by the following organizations:
    1. The American Federal Government
    2. The national government of India or of some other underdeveloped country
    3. An American state (or local) government
    4. American business as a whole
    5. An American business corporation.
  2. Amoz Morag, an Israeli economist, once said that our whole theory of public finance, having been developed mostly in England and in the United States, is based on certain economic philosophy natural to these countries but not to the underdeveloped ones. For the latter, a very different approach to public finance is required, frequently leading to conclusions and methods diametrically opposed to the usually accepted ones.
    Comment fully.

 

 

Source:  Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Evsey Domar Papers, Box 16, Folder “Ph.D. examinations, Fiscal Economics”.

Image Source:  Evsey Domar from the MIT Museum website.

Categories
Chicago Economics Programs Fields

Chicago. Memo to Dean from Chair of Economics. Strengths & Weaknesses, 1955

 

What I found particularly striking in the following memo, written by the chairman of the Chicago department of economics in 1955, is the number of fields in which the department saw itself weak or at least in need of support: labor, international, mathematical economics and econometrics, development, and industrial organization. Perhaps this was just a matter of administrative strategy, beg for assistance for five fields and hope to actually get assistance for three. That said, Schultz does not appear to be engaging in three-dimensional chess here. Will be interested in hearing what other people think about the this memo.

_______________________

Carbon Copy of Strengths and Weaknesses Memo
T.W. Schultz to Dean Chancy D. Harris

September 22, 1955

[To:] Dean Chancy D. Harris
[From:] Theodore W. Schultz
[Re:] Department of Economics

 

It may be helpful to have me briefly state the major elements of strength and, also, of weaknesses which I see in economics, in the hope that these notes may serve you as you prepare your presentation for the trustees.

Elements of Strength

  1. A comparatively young faculty strongly committed to research and graduate instruction.
  2. Research and related seminars are effectively organized as small scale enterprises:
    1. Workshop on Money
    2. Workshop on Public Finance
    3. Resources Research Enterprise
    4. Technical Assistance Studies
    5. Studies of Russia Agriculture
    6. Inventory Studies
  3. Satisfactory foundation support for some of the workshops and research enterprises now underway:
    1. Rockefeller Foundation supporting the money and public finance workshops.
    2. Resources for the Future supporting the resources research.
    3. Ford Foundation supporting the technical assistance studies.
    4. Also, for individual research, the Rockefeller Foundation support of economic history of Professor Hamilton.
  4. U. S. Government contracts and grants are proving satisfactory in financing some research:
    1. The inventory studies
    2. Russian agriculture work
  5. Financial support for competent advanced graduate students doing research is available from the several small scale research enterprises and, also, from SSRC (Griliches this year); from Earhart funds (Nerlove); and from corporations (Oi)
  6. Our new Ph.D. theses procedure is proving most effective in bringing student and faculty resources to bear on productive research.
  7. The new Economic Research Center of the Department is now proving important and necessary overhead facilities and services required by faculty and students working in the several small scale research enterprises.
  8. The new arrangements with the University Press to publish our Studies in Economics represents a major advance.
  9. The Journal of Political Economy continues strong as Prof. Rees and Miss Bassett take over.
  10. While we are not satisfied with the “quality” of many of our graduate students, we appear to be holding our own in a period when many averse factors are at work in lowering the quality of students in most branches, and also in economics generally as it appears.

 

Elements of Weakness

  1. Too many of the faculty are now in junior roles and there are too few major staff members on indefinite tenure in view of the fields of specialization in economics, the range and number of advanced graduate students, and the research work that is underway.
  2. With Professor Harbisons’s leaving and the non-functioning of the Industrial Relations Center in economics, our work in labor economics needs to be reorganized and strengthened. This replanning is now underway. Research resources are required: about $20,000 a year would be optimum.
  3. We are not prepared to serve adequately most of the many (representing about 30% of our graduate students) foreign students working in economics:
    1. Many of them should be in a modified Master’s program.
    2. Relevant research should concentrate on “developmental” problems.
    3. More effort is required to guide their work.
  4. The Department is now weak in International Economics because of the illness of Professor Metzler.
  5. The work in consumption economics has not been made as effective as it should be in bringing major graduate students into play in research.
  6. The reorganization and staffing of work in Mathematical Economics and Econometrics, with the Cowles Commission leaving, is unfinished business:
    1. Professor Hans [a.k.a., “Henri”] Theil is here this year as visiting Professor.
    2. Plans beyond this year await action.
    3. No research support at present for advanced students or for complementary staff in this important area.
  7. The broad area of Economic Development requires major attention and it should be placed high on our agenda as we develop plans and staff during the next few years:
    1. This area is needed to serve especially graduate students from foreign countries.
    2. The economic problems are important to the U.S. scene also.
    3. The Research Center for Economic Development and Cultural Change and importantly the “Journal” it has established need to be drawn into this new effort.
    4. Major new research resources are required.
  8. The long neglected field of Industrial Organization.

 

Some Concrete Steps

  1. To establish the work in Mathematical Economics about $20,000 a year will be required for a “professor” to head this work, for complementary staff, and related research.
  2. To establish the new enterprise now contemplated in Economic Development about $50,000 a year appears essential.
    In this area, a professorship, a visiting professor for each of the next several years, complementary staff, student research in a workshop and support for the Journal “Economic Development and Cultural Change.”
  3. Also in Labor Economics we need to move to a professorship and research support of about $20,000 a year.
  4. How to strengthen the work in International Economics must await developments affecting Professor Metzler’s recovery.
  5. There remains then the long neglected area usually referred to as Industrial Organization. Since no major individual has emerged here or elsewhere, we are compelled to “invest” in a younger person in breaking into this area.

 

Source:   University of Chicago Archives. Department of Economics Records. Box 42, Folder 8.

Image Source:  T. W. Schultz, University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economic History Economist Market Economists Fields

Chicago. Report of the Bailey-Christ-Griliches Committee, 1957

 

Today’s artifact provides a collection of suggestions from three young faculty members of the University of Chicago department of economics in 1957 regarding (inter alia) thesis writing, linkages with business/law/statistics faculty, long-term staffing, and the creation of a working-papers series. After reading the report, I guess one should not be terribly surprised that all three of these young turks would ultimately end up spending the lion’s share of the rest of their working lives elsewhere than Chicago. Basically what we have below is a young insider’s view of how to proceed in promoting excellence at Chicago, though it does not really have the ring of a majority view of that faculty. For fans of Saturday Night Live, one might say Christ et al. wanted “less cowbell” but the “more cowbell” faction was stronger. [An alternate source for the SNL sketch]

The following report was written by Carl Christ who incorporated assessments by his fellow committee members Martin J. Bailey and Zvi Griliches.  These guys were only ca. 34, 30, and 27 years old, respectively, in 1957. One suspects that the acting chair of the department of economics at the University of Chicago, D. Gale Johnson, was hoping to tap the minds of the younger faculty members for some fresh ideas. Both Friedman and Stigler had already entered mid-life at 45 and 46 years of age, respectively. 

I have added footnotes to the text in square brackets, e.g. [1], where descriptions of the reader’s markings by T. W. Schultz are provided.

_______________________

T. S. Schultz’s handwritten notes attached to Report

I.  Christ-G-B

  1. dust off Master’s (hold)
  2. treatment of the weak
  3. rec[commend?] students with more enthusiasm
  4. more history (underway)
  5. combine workshops?

II. Business –Law-Statistics

O.K.     more cross listing of courses. List of faculties for use in assigning committees (underway)

III. Information

prong 1. Special seminar (tied to more visitors)
prong 2. more 1 & 2 year visitors
prong 3. dist our staff (2 v.G.
prong 4. reprint service (underway)

 

_______________________

copy of T. W. S.

REPORT OF THE BAILEY-CHRIST-GRILICHES COMMITTEE*

            *The committee was appointed by D. Gale Johnson, acting chairman of the Department, pursuant to a motion passed at a department meeting late in the spring quarter of 1957. The report was written by Carl F. Christ, chairman of the committee, and has been approved in substance by Martin J. Bailey and Zvi Griliches, the other two committee members.

 

The committee has met together several times. In addition, each of us has “held hearings” with colleagues on numerous informal occasions. Our original terms of reference centered on a long range view of the question of staffing the department. But in our discussions we have ranged very widely.

We have dealth [sic] with five broad topics, some of which are interconnected. The five are, loosely speaking:

  1. Instruction, training and placement of students.
  2. Relations with the business, law, and statistics faculties.
  3. Information about the department for its members, for the economics profession and for prospective students.
  4. The allocation of resources in economics research.
  5. Kinds of economists the department ought to try to hire.

On some of these topics we have concrete suggestions, on some we have vague suggestions, and on some we merely have questions. This report provides a brief account of our discussions, and in the course of it it the suggestions and questions will appear.

 

(1) Instruction, training and placement of students.

This topic has not been a major one in our discussions. However we have several points under it.

First, the M.A. degree ought to be dusted off and made more respectable and more meaningful to students, so that those who do not choose or are not able to continue for the Ph.D. can go away from here with the feeling that they have made a worthwhile investment, to our credit as well as theirs.

Second, we ought to do a better job with our relatively weak Ph.D. aspirants in two respects: First, in discouraging or prohibiting from Ph.D. work any student who, in our opinion, is not capable of success by our standards. Second, once a student has been permitted to go ahead on his thesis, in encouraging and assisting him so that he is able to finish within a reasonable period of time and to have the feeling that he has been treated fairly. The reason for mentioning this point is that we have come across reports of several students who worked long and hard on theses and went through several revisions, with the result that they felt we had been unreasonably exacting and had unnecessarily delayed their degrees. [1]  If the M.A. degree is made more respectable as suggested above, there should be less difficulty in maintaining our Ph.D. standards and at the same time avoiding long-drawn-out struggles with marginal Ph.D. students. [2]

Third, we ought to be more vigorous and more liberal in recommending our students for jobs. There appears to be some evidence that in making recommendations we typically assume that the prospective employer has standards as high as ours, and so sometimes fail to place some of our people in jobs that instead are filled by less qualified students from elsewhere. [3]

Fourth, we ought to give at least some of our students a better knowledge of history and inability to make use of it in economics. Too many of our students go away with only poor knowledge in this area. At the same time, in Earl Hamilton and John Nef, not to mention others, the department has access to some of the best historical talent that is to be found anywhere. Can it not be turned to the advantage of more students? [4]

Fifth, we ought to economize our resources a bit by combining into one the workshop appearance in the thesis seminar of those students whose workshop performances appear ex post to have served the purpose of the thesis seminar. It might also be possible to combine the Ph.D. oral examination with the seminar appearance in some cases, thus making a further saving.
Sixth, we ought to take more advantage of the resources in the business, law, and statistics faculties, and be prepared to let them do the same with us (see topic 2 below). [5]

 

(2) Relations with the business, law, and statistics faculties.

The committee met for an hour with Allen Wallis, James Lorie, and Arnold Harberger to discuss informally the probable future course of relations between the department and the school. From this it appeared that the school intends to continue to send many of its advanced students to the department for training in price theory and monetary and income theory, and also that the school will welcome students from the department who wish to study topics that are offered in the school. [6] It also appeared that the school intends to invest fairly heavily in staff in the areas of industrial and market organization in the public regulation of business (this interested us because we feel that one of the main weaknesses in the department’s coverage lies here; see topic 5 below). [7]

We discussed the fact that while relations between the department and the school have always been cordial, there has not been as much flow back and forth as desirable, and in particular that some of our students would be interested in the business school’s work fail to follow up this interest because our demands on their time are quite heavy. We concluded that if there were more cross-listing of courses in the catalog and time schedules (the business school now does a better job of this than we do), and if some of their faculty came to our seminars and oral examinations and vice versa, and if there were more preliminary examination committees and thesis committees with members from both the school and the department, then in the course of meeting their degree requirements, any interested economics department students will find it easier to draw on the resources of the business school and vice versa.[8]

A similar approach to law and statistics would appear promising.

 

(3) Information about the department for its members, for the economics profession, and for prospective students.

One of the most commonly recurring themes in our discussions with each other and with “witnesses” in our “hearings” was that we do not provide good enough information for each other and for outsiders about the kind of work that is going on here, and the advantages we believe we have. Our discussions on this point have led to one of the two major suggestions we have to offer (the other appears below in section 5).

The suggestion is to set up a four-pronged program something like the following. (We will quickly list the four prongs, and then return with some comments.) First, set up a sort of special seminar (which might be called the Economics Research Center Seminar) to meet more or less regularly about twice a month, at which the best work that students and faculty and guests are doing would be presented to the department and its guests. Second, have a larger number of one-year or two-year visitors from all over the U. S. and the world, either as post-doctoral fellows or research associates or the like, whose main responsibility here would be to work on their own research and participate in the special seminar, as well as to take part in one or more workshops and research projects. Third, distribute dittoed copies of our essentially finished work to a selected mailing list of economists in the US and abroad, as the Agricultural Economics group already does informally. And fourth, have a reprint series that would carry the best published articles and papers by our faculty, students, and guests.

It is clear that if such a special seminar is set up and no cut is made in the number of meetings of the other workshops and seminars, the faculty workload will increase. Since we feel that it is already pretty high, it seems sensible to suggest that each workshop skip one meeting each month. This should approximately compensate for the extra load created by the special seminar.*

*A crude survey of the faculty attendance at the Agricultural Economics Seminar and the Chile, Labor, Money, Public Finance, and Econometrics Workshops yields the estimate that about 40 faculty-hours (that is, about 20 man-seminars) per week go into these workshops. Assuming that about 10 faculty members would come to each special seminar, about every two weeks, this would require a weekly average of about 10 faculty-hours (or about 5 man-seminars), which would be released if the frequency of meetings of the workshops were reduced about 25%. Another economy measure in this direction is mentioned under topic (2), fifth item.

(In response to the special seminar idea, some colleagues have suggested that the important thing is to circulate advance notice of particularly good work that is about to be presented, so that interested faculty members and others can attend, and that if this can be done, there is no need to have a special seminar; the regular workshop sessions will suffice. If the idea is accepted that particularly good work ought to be publicized within the department before it is presented, then the question of whether to do this via notices of regular workshop meetings or via a special seminar can be discussed as a procedural matter.) [9]

The special seminar idea is tied in with the idea of more visitors, for one of the results we hope for is that the visitors will see our best work, and will spread the word about what kinds of things are being done here, when they leave and go elsewhere. [10]

The reprint series and the distribution of the dittoed manuscripts will, we hope, have a similar effect. Further, but dittoed manuscripts will enable some members of the profession at large to become familiar with our results many months before they can be brought out in published form. [11]

Other simpler measures that might improve the flow of information are the following: Putting out a special department circular or flyer describing the department, the workshops, the interchange of research among faculty and advanced students, and the large amount of faculty attention paid to students; returning to the practice of giving brief descriptions of courses in the catalog (and in the above-mentioned circular), instead of merely course titles as our department has been doing recently; and publishing an annual report for the Economics Research Center. [12]  The matter of job recommendations for our students, which is related to the topic of providing information, was touched on under topic (1) above.

 

(4) The allocation of resources and economics research.

The area of economics that is the most fully developed, the most systematic, the most firmly established, and probably the most reliable for understanding and controlling economic events is the more or less traditional theory of prices, distribution, and the allocation of resources, based on the tools of supply, demand, and marginal analysis. Because it’s postulates (including utility maximization, profit maximization, and a fairly widespread knowledge of market alternatives) appear to be rather unrealistic, this theory has the reputation among many people of being dry, abstract, and of little or no practical value. In the opinion of the committee and of many economists in our department and elsewhere, this theory is a powerful one and can lead to highly useful results when applied to real-world problems. Indeed, one of the most productive kinds of activity for economists appears to be to apply this theory to situations where public and private policies are inappropriate to the goals people have in mind. [13]

In our opinion, the main strength of our department lies in just this kind of activity. We have a group of people who are very devoted to and very good at discovering important, unsolved economic problems that can be solved with the aid of this kind of theory, and solving them. [14]

Our agricultural economists’ approach to the farm problem is one example. Their work on optimum storage rules and on the development of natural resources or others. Our department’s work on economic growth in a sense is another, since when we find that the growth in national product is not fully accounted for by inputs of labor and capital is usually measured, we begin to look for some missing input, either in the form of something that shifts the production function, or in the form of some quality improvements that we have missed in the labor and/or capital: knowledge in either case. This is related to work by Friedman, Becker, in the labor workshop on the value of education as an investment, and to Knight’s concept of human beings as a form of capital. Harberger’s work on depletion allowances, and on the welfare costs of the U.S. tax system, are other examples. Friedman’s and Cagan’s work on the demand and supply of money are examples too, in the sense that attention is focused on the behavior of economic units seeking to maximize their utility or profit in their holding of money and their borrowing and lending operations. Friedman’s and Reid’s consumption work is similar in that into rests on the same view of individual behavior. The whole Chile project is an example par excellence. Friedman’s suggestions for allowing the price system more scope in the fields of education, military recruiting, and the like, for which Friedman and indirectly, the department are so well known, are still others, as is Becker’s free banking scheme, though there is probably more disagreement among economists generally about questions like these that about the other work mentioned above.

While it is clear to us that applications of the familiar theory of allocation of resources very productive, it seems equally clear that the real frontiers of economics lies elsewhere. Some areas that have claimed attention so far are economic history, political science, sociology and social psychology and cultural anthropology, psychology (including learning theory), information theory, statistical decision theory, linear programming, the theory of games. It seems at least as likely that major advances in economics will come by one of these routes or some as-yet-unidentified route as they will come from applications of the familiar resource-allocation theory.

The foregoing statement is so broad that it is almost certain to be true, and almost useless as a guide to research workers interested in major advances. The committee polled itself as to where it thinks pay dirt lies, and where it does not lie, with results something like the following: Among the areas particularly likely to be fruitful are the borderland with learning theory and psychology concerning choice and decision-making  [15], the borderland with statistics concerning decision theory and game theory [16], the borderland with anthropology concerning culture and values [17], the borderland with political science concerning political institutions [18]. Also promising, we feel, are mathematical approaches generally, including mathematical approaches to some of the above mentioned borderlands. [19] None of us wanted to rule out linear programming, though none of us was enthusiastic about input-output.

In summary of this topic, we have two statements: First, the familiar resource allocation theory is a powerful tool and there remains a rich field for its application. Second, it seems to us that if some resources are invested in related but different areas such as those mentioned in the preceding paragraph, there is now a worthwhile chance of that substantial pay-off in the form of new knowledge relevant to economics.

 

(5) Kinds of economists the department ought to try to hire.

Over the past few years several members of the department (and a good many outsiders!) have expressed the view that our department is too homogeneous in several ways. [20] Most of us rely heavily on resource allocation theory, as suggested in the preceding section of this report, and do not emphasize peripheral and possibly frontier areas such as decision theory, learning theory, information theory, psychology, anthropology, and the like. [21] Most of us were trained at Chicago at some stage, are essentially anti-socialist, [22] have essentially similar views about monetary and fiscal policy, have similar views about how far public policy should rely on the price mechanism and how far it should interfere with it, and are primarily theoretically and analytically oriented as opposed to institutionally oriented.

In recent department meetings, our discussion of this matter has often gone something like this: First, we more or less agree that we ought to diversify by seeking a socialist, or an institutionalist, or something of the sort. [23]  Then we considered names of economists who might qualify, and one by one we reject them on the ground that they are not really good economists. The discussion ends when someone says, “There’s really nobody good in that category.”

Granted that we want to maintain a high level of quality in the department, there are at least two difficulties involved in any attempt to diversify. One is that in hiring people we like to feel that we know them pretty well, so as to make informed decisions. And the younger people whom we know the best, by and large, are our own former students and fellow-students. This creates and perpetuates a bias in favor of people trained at Chicago. [24] The bias is not so strong, of course, in the cases of people who have published and made reputations, but even here it appears to exist (look at the people who were brought here as associate professor from elsewhere, and ask how many have had training at Chicago).

A second difficulty is simply that it is hard to separate judgment about the quality of an economist from judgment about his position on questions of research strategy and of economic policy. We agree in principle that high quality is very important, and also that it is possible for powerful and prolific minds to disagree in good faith concerning research strategy and public policy. Still there is a temptation to feel that one’s own views sincerely arrived at are best, and that somehow an economist who disagrees strongly with them cannot really be a very good economist. [25]

It seems to the committee that the real issue is not diversification per se. We see the issue somewhat as follows: As we said in the foregoing section of the report, we believe that the real frontiers of economics lie in directions that are somewhat unorthodox by the lights of the department. [26] We also believe that there are high-quality economists who are unorthodox in the same sense. If these two premises are correct, then our interest as a department in pushing forward the frontiers of economics must prompt us to make a serious attempt to add a few such people to our staff. It is only in this sense the diversification seems to be a worthwhile aim.  [27]

The question of what sort of people the department ought to try to hire includes not only the problem of finding economists of high quality who appeared to have productive unorthodox approaches. [28] It also includes the problem of rounding out the subject-matter coverage of the department.

The committee pulled itself again, this time as to the subject matter areas that the department ought to pay special attention to, in seeking new faculty. The results were as follows.

For replacement of staff lost in recent years, the two high-ranking fields were mathematical economics-econometrics, and industrial and market organization in social control of business. [29]  (The second of these seems less urgent for us, in the light of the business school’s intention to invest in it; see topic 2 above.) Ranking almost as high was the history of economic thought. [30]

For expansion, we thought of business fluctuations, the economics of the firm, and American economic history (the latter mainly so as to free Earl Hamilton to give work in his real specialty, European economic history, without sacrificing our offering in the American field).

The last two sections of the report may be summarized thus (and here is the second major suggestion referred to earlier). It is the feeling of the committee (1) that we should place a high value on quality, and (2) that in view of our belief that the present composition of the department is weak in areas where the frontiers of economics are to be found, we should make a serious attempt to find high quality people whose interests and competence give promise of advancing the frontier, as suggested in the end of the preceding section of the report. We also suggest that the department pay special attention to the fields mentioned in the foregoing paragraph. In particular, we suggest that the department undertake to appoint a person in the mathematical economics-econometrics area beginning in the fall of 1958. [31]

There is no reason why one or more of these things should not be combined in the same person. And, of course, there is no reason why we should pass up opportunities to hire good economists who are essentially orthodox by our lights, if our resources will permit us to do that as well as meet our author needs.

 

Handwritten Markings and Remarks

[1] Vertical line in left margin marks the last two sentences of paragraph.

[2] Question mark in left margin for this sentence.

[3] “a good point” in left margin for second sentence of paragraph.  “need to ask[?] terms of the specific job + not general letters” in the right margin

[4] “good” in left margin. Vertical line in left-hand margin marks the entire paragraph.

[5] “OK” in left margin. Vertical line in left-hand margin marks the entire paragraph.

[6] “good” written in left margin next to this sentence.

[7] Vertical line in left margin marks the last sentence of the paragraph.

[8] “get list from these committees” in left margin for this sentence.

[9] “OK” in left margin for the last sentence of this paragraph.

[10] “OK” in left margin next to this paragraph.

[11] “OK” in left margin for the last sentence of this paragraph.

[12] underlined “merely course titles as our department has” and “publishing an annual report for the Economics”

[13] Four vertical lines in the left margin mark the last sentence of this paragraph.

[14] Vertical line in the left margin marks the entire paragraph.

[15]  Underlined: “borderland with learning theory and psychology concerning choice and decision-making”,  “(1)” in left margin.

[16] Underlined: “statistics concerning decision theory and game theory”,  “(2)” in left margin.

[17] Underlined: “anthropology concerning culture and values”,  “(3)” in left margin.

[18] Underlined: “political science concerning political institutions”,  “(4)” in left margin.

[19] “(5)” with a vertical line in the left margin marking “mathematical approaches generally, including mathematical approaches to some of the above mentioned borderlands.”

[20] “is too homogeneous in several ways” is underlined.

[21]  “decision theory, learning theory, information theory, psychology, anthropology” is underlined.

[22] “anti-socialist” is circled

[23] “socialist” and “institutionalist” are each circled.

[24] Vertical line in left margin marking the second, third, and fourth sentences of this paragraph.

[25] Vertical line in left margin marking this entire paragraph.

[26] “economics lie in directions that are somewhat unorthodox” is underlined.

[27]  Vertical line in left margin marking the last two sentences of this paragraph.

[28] “productive unorthodox approaches” is circled

[29] “mathematical economics-econometrics” is circled  “also Stigler” written in left hand margin with reference to “industrial and market organization”

[30] “history of economic thought” is underlined, connected with short line to bottom margin note “Stigler”.

[31] Curly vertical line in the left margin marks the entire paragraph.

 

Source: University of Chicago Archives. Department of Economics Records, Box 42, Folder 8.
Mimeograph copy without marginal notes also found in Harvard University Archives. Papers of Zvi Griliches, Box 129, Folder “Correspondence, 1954-1959”.

Image Source: Professor Carl F. Christ in Johns Hopkins University yearbook. Hullabaloo 1962.

 

Categories
Economics Programs Fields M.I.T.

M.I.T. Graduate Economics Program Brochure, 1961

 

 

 

Robert Solow served as the graduate registration officer of the Department of Economics and Social Science at M.I.T. perhaps even as late as when the graduate program brochure (transcribed below) was printed in 1961. Since Solow went down to Washington to serve as a senior staff economist on the Council of Economic Advisers in 1961, it seems likely that the brochure would have been drafted sometime before John F. Kennedy’s inauguration. This brochure is striking in many ways, e.g. its 100% informational content, presumably reflecting significant authorship/editor responsibilities of Robert Solow.

Five cherry-picked quotes from the brochure I found particularly sweet:

“The M.I.T. program does not concentrate on mathematical economics”
[It’s not what you say, it’s what they hear.]

“The department welcomes applications from qualified women”
[Apparently in the DNA of the department since World War II nearly emptied the pool of qualified male applicants.]

“The purpose of the minor program is to broaden the interests or capacities of the student in other areas than those of his major intellectual objective. While some latitude is allowed in particular cases, the spirit of this purpose is always held in view.”
[As opposed to the commandment “Thou shalt stay in thy lane”.]

“Students who are prepared for graduate work in economics are almost never deficient in humanities. Similarly, deficiencies in science are infrequent; but candidates are frequently admitted without preparation in calculus.”
[You go to war with the army you have.]

“In judging promise, special weight is naturally given to letters of recommendation from economists known to members of the department. The difficulty of evaluating records in foreign institutions and of judging foreign references constitutes a serious but no impassable barrier for foreign applicants.”
[Signal extraction problem vs. the problem of old boy networks]

Incidentally, neither “microeconomics” nor “macroeconomics” appear in the document at all. The preferred terms seen here in the brochure are “price and allocation theory” and “income analysis”.

____________________________________

The Graduate Program in Economics

School of Humanities and Social Science
Massachusetts Institute of Technology
[1961]

This brochure has been prepared especially for students who may enter the graduate program in economics at M.I.T. Its purpose is to answer a number of questions which have been recurrently raised about the program and to add to the information which is given in the M.I.T. catalogue.

 

Highlights of the M.I.T. Graduate Program in Economics

  1. The program is almost entirely for doctoral candidates. The master’s degree at M.I.T. is given in either economics and engineering or economics and science; it requires the equivalent of the M.I.T. undergraduate content in engineering or science.
  2. The M.I.T. program does not concentrate on mathematical economics. All students are required to have and use a minimum of mathematics. Students who enter without calculus may make up their deficiency in the first term with a one-semester subject (Mathematics for Economists—14.101), given in our own department. Most of the work in most fields, however, is nonmathematical.
  3. The program is limited in size. Approximately twenty-five students are admitted in any year; sixty or so students are in residence at one time. The department has more than thirty faculty members, twenty of whom have a major responsibility in the graduate program.
  4. The department welcomes applications from qualified women.
  5. All applicants are urged to take the Graduate Record Examination no later than during the January preceding the September in which they wish to enter. They should take the quantitative and verbal aptitude tests as well as the test in economics (Write to the Graduate Record Examinations, educational Testing service, 20 Nassau Street, Princeton, New Jersey, for information on these examinations. Students in western states should write to 4640 Hollywood Boulevard, Los Angeles 27, California.)
  6. Visits to the M.I.T. Campus are helpful both to the candidate and to the departmental admissions committee. Appointments are desirable but are not generally essential, since members of the committee are likely to be available.
  7. The department would like each applicant to submit a statement (one or two pages) explaining his interest in economics. An informal questionnaire is provided for general guidance.
  8. Admission in February is granted only on an exceptional basis, because many subjects given in the spring are continuations of work given in the fall. In any event, fellowship assistance is given only as a consequence of the annual March competition, for students entering in the following September.
  9. Fellowships and scholarships in amounts up to $3250 are available for entering graduate students.
  10. Winners of outside fellowships are welcome to use them at M.I.T. It is entirely appropriate to apply for a Woodrow Wilson, G.E., A.A.U.W., National Science Foundation, or other outside fellowship at the same time that one applies to M.I.T. As a rule, M.I.T. learns of the outside award prior to making its own announcements.
  11. Liberal second-year fellowships are available both to students entering with fellowships and to those who enter without financial assistance. Awards are made on the basis of first-year performance.
  12. Teaching assistantships are ordinarily available for third-year students only, although some second-year students may do a small amount of teaching. Assistantships are not available to entering students unless they have had prior graduate study and teaching experience elsewhere.
  13. I.T. these are written in residence. Following an Institute rule, theses are prepared in residence except where the special requirements of the subject, such as field work, dictate otherwise. All theses are written in residence.
  14. For further information, write the Graduate Registration Office of the Department of Economic and Social Science, Professor Robert M. Solow.

 

S.M. in Economics and Engineering or Economics and Science

The department offers a Master of Science degree only in the combined fields of economics and engineering or economics and science. This degree is available primarily to students whose undergraduate work was in either engineering or science. Its purpose is to enable scientists and engineers, and in particular graduates of the undergraduate Courses in Economics and Engineering or Science (Course XIV) at M.I.T., to carry their economics training to the graduate level in order to equip them more fully for work in industry or government.

 

Ph.D. Degree

Ph.D. degrees are awarded in economics (including industrial relations) and in political science. In addition, candidates occasionally work for a doctorate in two or more fields—for example, economics and mathematics, economics and operations research, or economics and regional planning. These candidates are examined by special committees, on which members of the Department of Economics and Social Science serve jointly with members of the other departments concerned. Most of the graduate work in the department is directed towards the doctor’s degree. This pamphlet deals exclusively with the Ph.D. in economics; a separate bulletin describing graduate work in political science is available on request.

There are four departmental requirements for the Ph.D. degree: the passing of a general examination in a number of approved fields within the area of economics and social science; the satisfactory completion of a “minor” program in another department; demonstration of ability to read two foreign languages of significance in economics; and preparation and defense of a dissertation.

 

Major Program and General Examinations

Work taken in the Department of Economics and Social Science for the doctorate in economics is divided—broadly speaking—into two separate options: economics and industrial relations. But there is considerable overlap between the two.

All students in both options are examined five fields. Among the fields presently available are the following: economic theory, advanced economic theory, monetary and fiscal economics, industrial organization, economic development, international economics, economics of innovation, labor economics and labor relations, personnel administration, human relations in industry, statistical theory and method, and economic history. Each student selects one field as having primary importance for this professional career; ordinarily this is the field in which he writes his dissertation, though exceptions may be made. The remaining four fields are designated secondary fields. One of the five fields must be economic theory.

Students are also required to have at least a minimum knowledge of statistics and economic history. This minimum is presently interpreted to mean one semester of work in each at the graduate level. Candidates who present statistics or economic history as a primary or secondary field normally take two or three semester subjects in the field and automatically satisfy the requirements in that area.

Students may qualify in one of the secondary fields through course work only, provided that they receive a mark of B or better in two subjects. Students are examined in writing in the remaining four fields during an eight-day period (Monday, Wednesday, Friday, and Monday). The theory examination is four hours long (divided roughly between microeconomics and macroeconomics), while the other three are each three hours long.

Following these written examinations, the student takes a two-hour oral examination which covers theory, his primary field, and one secondary field.

 

Foreign Languages

Doctoral candidates must show reading knowledge of two foreign languages; the standard set is the ability to read works of scientific interest at a relatively slow pace. Acceptable languages are German, French, Russian, or any other language which has a literature in economics or which will advance the educational program planned by the individual student. Students are examined by the Department of Modern Languages.

Students whose language preparation has been limited may take subjects which prepare specifically for the language examinations. Students with no previous training in a language frequently are able to attain the necessary minimum proficiency during a single semester of fairly intensive study. Others, who have already had some introduction to a language, often pass the requirement at some time before the end of the semester.

 

Minor Program

Every candidate for the doctor’s degree at M.I.T. must complete a program in a minor field in another department of the Institute. This program consists of a minimum of 24 units, which ordinarily implies three one-semester subjects. The choice of the minor field is made by the student, with the approval of the Department of Economics and Social Science. The content of the program within the other department is a matter for that department’s determination. Satisfactory completion of a minor is ordinarily contingent upon an average rating of 3.5 (in effect, a minimum of two B’s and a C). The normal standard is that the minor work shall be beyond the level required of M.I.T. undergraduates. Students who have done advanced undergraduate work in some field other than economics may often use it to meet part of the minor requirement.

Students in economics have met the minor requirement in such fields as mathematics, industrial management, history, international relations, other social sciences, literature, city planning, chemistry, and electrical engineering. Subjects taken in the minor program must not duplicate work which may be offered for one of the five fields in economics. A minor program in history may include only one term of economic history, since two terms would qualify the student to offer it as a field in economics. Similarly, students minoring in industrial management may not concentrate in such areas as personnel administration. The purpose of the minor program is to broaden the interests or capacities of the student in other areas than those of his major intellectual objective. While some latitude is allowed in particular cases, the spirit of this purpose is always held in view.

 

Courses at Harvard

Students regularly enrolled at M.I.T. are permitted to take a limited number of subjects at Harvard University—about two miles distant in Cambridge—on an exchange basis, without paying extra tuition. Such subjects may be taken as a part of the minor program. Fields for the major program other than those described above may sometimes be offered on the basis of work at Harvard.

 

Residence Requirements

The minimum residence requirement for the Ph.D. degree, including thesis, is the equivalent of one and one-half full-time academic years. No specific number of subjects is required for the general examinations. In general, however, it is recommended that students have at least the equivalent of three semesters of work at the graduate level for the primary field; four semesters in economic theory; and two semesters in each of the other fields. Work on the graduate level at other institutions is considered in meeting these broad approximations of the requisite preparation. Since there are no formal course requirements, there is no occasion to have graduate credits from other schools transferred.

A full-time student is expect to take the equivalent of five subjects each semester for credit; this may include one “reading subject,” in which the student will broaden his reading in his regular subjects. A half-time student is permitted to take approximately three subjects, and a third-time student two subjects. Auditing of additional subjects is permitted as an overload.

 

Dissertation and Special Examination

The Institute requires that all dissertations be prepared in residence, during which period tuition must be paid. Field work may be necessary to gather material; but the analysis of this material must take place at the Institute, under supervision of the instructor in charge of the dissertation. In some cases the writing of the final, polished version of the thesis may be completed elsewhere.

As in other institutions, the dissertation is expected to make a contribution to knowledge in the subject. Shortly after each candidate has submitted his thesis, he is examined on its subject. This examination is oral, conducted by a committee generally consisting of three faculty members, and usually is one hour in length.

 

Total Program of Course Work

The typical student comes to the Institute directly from college with no previous graduate study, having a deficiency in one subject and the ability to pass the reading examination in one language. He can usually prepare for the general examinations in four semesters (two academic years) taking five subjects in each, divided as follows:

 

In the Department of Economics Economic theory—four subjects
One primary field—three subjects
Three secondary fields—six subjects
Statistics—one subject
In other departments Deficiency—one subject
Language—one subject
Minor—three subjects
Total: Twenty subjects
[sic, total of the above is nineteen]

This program is only illustrative, of course, and a wide number of variations are to be expected. Additional work may be required because of additional deficiencies or lack of language preparation. The number of subjects may be reduced by absence of deficiencies, by better preparation in languages, by postponing one or more requirements (such as a part of the minor) until after the general examinations, or by incorporating economic history and/or statistics as primary or secondary fields.

 

Time Required for the Ph.D. Degree

A student entering the program with only a bachelor’s degree may expect to receive the Ph.D. degree in three years under optimum conditions. This will entail taking the general examination in May of the second year and completing a satisfactory dissertation in two semesters of full-time work thereafter. Normally, however, somewhat more time is needed, either in summer work or in some part of a fourth year. Students may need this additional time for more extensive preparation before the general examination, for the thesis, or (in the ordinary case) because teaching duties prevent full-time progress as a student. Many students who plan to enter the teaching profession take advantage of the opportunity to teach part-time at M.I.T. Teaching assistantships are available for students who have passed their general examinations, and occasionally for second-year students.

General examinations are given in the department at the beginning of each semester—in September and February—an again in May. Defense of the dissertation is arranged individually at any time.

Students enrolling in the Ph.D. program with a master’s degree from another institution, based on one or more years of residence at that institution, are urged to take their general examinations earlier than May of their second year at M.I.T. It is not usual, however, for a student to be able to transfer between institutions without some loss of time.

 

Summer School

The department does not offer any subjects at the graduate level during the summer session. However, students may enroll during the summer for thesis credits, for which tuition must be paid. Scholarships are only rarely available for payment of summer school tuition.

 

Admission

To be admitted into the program, a student must hold a bachelor’s degree from an accredited college or university. To be admitted without deficiencies, he must have taken one year of college mathematics, including at least one semester of calculus; one year of college science; and a minimum of three years of college work in the humanities and social sciences. While an undergraduate degree in economics is not indispensable, students are expected to have done a considerable amount of undergraduate work in this field. Students who are prepared for graduate work in economics are almost never deficient in humanities. Similarly, deficiencies in science are infrequent; but candidates are frequently admitted without preparation in calculus.

 

Special Students

Special students, taking from one to five subjects, may be admitted to the Institute and to the department from time to time under special circumstances. Admission of special students automatically lapses each semester; application for re-admission, in the case of students wishing to continue course work, must have the approval of the instructor concerned and the department.

 

Deficiencies

Students who, upon admission, are deficient in mathematics may make up this deficiency by taking a special one-semester subject offered by the Department of Economics—Mathematics for economists (14.101.) Since calculus is required for some of the work in economic theory and statistics, students entering with a deficiency in this area are required to make it up as soon as possible. Though this is not specifically recommended, some students may be able to make up a deficiency in calculus by studying at a summer school prior to fall enrollment at the Institute.

 

Fellowships, Scholarships, and Financial Assistance

Fellowships and scholarships are awarded on a competitive basis only. First-year awards are made on April 1 for the academic year beginning in the following September. Second-year and subsequent departmental awards are made in June. No academic assistance is available for students applying after April 1, or (until the following September) for those entering in February.

Fellowships cover the tuition fee of $1500 and some cash payment toward living expenses. A fellowship of $3200 will thus include $1500 tuition and $1700 cash. The cash award is paid in two equal installments, at the beginning of each semester.

The total of fellowship assistance varies from year to year. There are several name fellowships: the Goodyear, varying from $3000 to $3500; the United States Steel, at about $3100 for each of two years (awarded every other year); the RAND Corporation Fellowship in Mathematical Economics, varying from $3000 to $3500; the Hicks, for students of industrial relations, ranging from $2000 to $3000; and the Center for International Studies Fellowship in Economic Development, ranging from $3000 to $3500; In addition to these, the Institute awards Whitney Fellowships ($3000 in 1961), open only to first-year graduate students coming from outside M.I.T., upon recommendation of the department; and the department has limited funds with which it makes scholarship and fellowship awards varying from $1500 to $3000.

In offering scholarships and fellowships, the department takes into account a variety of factors; academic achievement, career promise, and need. In judging promise, special weight is naturally given to letters of recommendation from economists known to members of the department. The difficulty of evaluating records in foreign institutions and of judging foreign references constitutes a serious but no impassable barrier for foreign applicants.

In general, outside fellowships are financially better than all but a few of the department’s awards. Applicants are therefore urged to seek Woodrow Wilson, Danforth, National Science Foundation, and similar fellowships for use at M.I.T., if they think they stand a good chance of success in the national competition.

Students who perform effectively in their first year are assured of financial support needed to finish the degree. Part of this takes the form of fellowships, in amounts somewhat lower than first-year awards; the rest consists of teaching and research assistantships and instructorships. The half-time teaching assistantship covers the half-time tuition fee of $1000 and pays $180 a month for nine months—a total of $2620. The half-time instructorship, which is reserved for students who have demonstrated effective teaching as an assistant, pays the same tuition and $235 monthly–$3115 for the academic year. The few research assistants appointed each year receive a higher rate of pay than teaching assistants but pay their own tuition. They have the advantage, however, of working on a subject related to their thesis. The department is occasionally able to obtain assistantships for applicants in other parts of the Institute, such as the School of Industrial Management or the Operations Research Group.

Third-year students are also encouraged to compete for outside assistance in supporting their thesis research, such as the Ford Foundation Doctoral Dissertation Awards, the Social Science Research Council Fellowships, and Fulbright Awards.

 

The Faculty in Economics and Industrial Relations

Morris A. Adelman, Professor of Economics
Ph.D. Harvard 1948
Industrial organization, government regulation

Albert K. Ando, Assistant Professor of Economics
Ph.D. Carnegie Institute of Technology 1959
Statistics and econometrics, economic fluctuations

Francis M. Bator, Associate Professor of Economics
Ph.D. M.I.T. 1956
Price and allocation theory, income analysis, economic growth

Robert L. Bishop, Professor of Economics, in charge of the department
Ph.D. Harvard 1949
Price and distribution theory, industrial organization, history of economic thought

E. Cary Brown, Professor of Economics
Ph.D. Harvard 1948
Public finance, income analysis, fiscal economics

Evsey D. Domar, Professor of Economics
Ph.D. Harvard 1947
Income analysis, economic growth, Soviet economics, fiscal economics

Robert Evans, Jr., Assistant Professor of Industrial Relations
Ph.D. Chicago 1959
Labor economics, industrial relations

Franklin M. Fisher, Assistant Professor of Economics
Ph.D. Harvard 1960
Econometrics, price and allocation theory

Harold A. Freeman, Professor of Statistics
S.B. M.I.T. 1931
Statistical theory, experimental design probability methods

Ralph E. Freeman, Professor of Economics, Emeritus; Lecturer
A.M. McMaster 1914, B. Litt. Oxford 1919
Monetary economics

Everett E. Hagen, Professor of Economics
Ph.D. Wisconsin 1941
Economic development, income analysis

Ralph C. James, Jr., Assistant Professor of Insutrial Relations
Ph.D. Cornell 1957
Labor economics, industrial relations

Charles P. Kindleberger, Professor of Economics
Ph.D. Columbia 1937
International economics, monetary theory and policy

Edwin Kuh, Associate Professor of Economics
Ph.D. Harvard 1955
Econometrics, income analysis

Max F. Millikan, Professor of Economics
Ph.D. Yale 1941
Economic development, income analysis

Charles A. Myers, Professor of Industrial Relations
Ph.D. Chicago 1939
Labor economics, industrial relations

Paul Pigors, Professor of Industrial Relations
Ph.D. Harvard 1927
Personnel administration, industrial relations

Paul N. Rosenstein-Rodan, Professor of Economics
Dr.Rer.Pol. Vienna 1925
Economic development

Walt W. Rostow, Professor of Economic History
Ph.D. Yale 1940
Economic history, economic growth

Paul A. Samuelson, Professor of Economics
Ph.D. Harvard 1941
Price and allocation theory, income analysis, monetary theory and policy

Abraham J. Siegel, Associate Professor of Industrial Relations
M.A. Columbia 1949
Labor economics, industrial relations

Robert M. Solow, Professor of Economics
Ph.D. Harvard 1951
Price and allocation theory, income analysis, econometrics

 

Graduate Subjects

Price and allocation theory

14.121, 122 Economic Analysis
14.123 Advanced Economic Theory
14.132 Schools of Economic Thought
14.151 Mathematical Approach to Economics

 

Income analysis

14.451 Theory of Income and Employment
14.452 Economic Growth and Fluctuations

 

Economic history and economic development

14.161,162 Economic History
14.171 Theory of Economic Growth
14.172 Research Seminar in Economic Development
14.182 Capitalism, Socialism, and Growth

 

Economics of industry

14.271 Problems in Industrial Economics
14.272 Government Regulation of Industry

 

Statistics and econometrics

14.371,372 Statistical Theory
14.374 Design and Analysis of Scientific Experiments
14.381 Statistical Method
14.382 Economic Statistics
14.391 Research Seminar in Economics
15.032 Sampling of Human Populations1

 

Monetary and fiscal economics

14.461,462 Monetary Economics
14.471 Fiscal Economics
14.472 Seminar in Fiscal and Monetary Policy

 

International economics

14.581,582 International Economics
14.584 Seminar in International Economic Theory

 

Industrial relations

14.671 Problems in Labor Economics
14.672 Public Policy on Labor Relations
14.674 The Labor Movement: Theories and Histories
14.681,14.682 Seminar in Personnel Administration
14.691,692 Research Seminar in Industrial Relations
14.693 Collective Bargaining and Union-Management Cooperation
14.694 Seminar in Union-Management Cooperation

1School of Industrial Management

 

[Production Credits]

Editorial service by the M.I.T. Office of Publications. Design by Brigitte Hanf. Typesetting by the Lew A. Cummings Company, Inc., Manchester, New Hampshire, and The Composing Room, Inc., New York. Production by the Lew A. Cummings Company, Inc. January, 1961.

 

Source: MIT Archives, Department of Economics Records, Box 2, Folder “Department Brochures”.

Image Source: MIT beaver mascot, Tim,  from Technology Review in 1914.

Categories
Economists Fields Johns Hopkins

Johns Hopkins University. Proposal for a course on linear economic systems. Newman, 1968

 

The following memorandum written by Peter Newman, the Johns Hopkins mathematical economist (later turned important historian of economics and co-editor of The New Palgrave Dictionary of Economics), provides us with an explicit statement of a theorist’s view of mathematics required of Ph.D. economists in 1968. I find it particularly interesting that no mention of the usefulness of linear algebra for statistics and econometrics was included in his discussion. This memo was found sandwiched in a collection of course reading lists.

________________

DEPARTMENT OF POLITICAL ECONOMY

Proposed Graduate Course on Theory of Linear Economic Systems
for discussion on February 21, 1968

  1. The recent abolition of the University’s second foreign language requirement for the Ph.D. has left the Department in a slight predicament. The mathematics requirement has until now served as a commonly chosen alternative to the second foreign language, and so the latter’s abolition places us under some pressure to drop the former. But we would like all our students to have some mathematics beyond one year of calculus.
  2. The situation has at least one more complication. Fulfillment of our mathematics requirement normally requires the attending and passing of courses 16 and 19 in the Mathematics Department. There appear to be few problems with 19 (Advanced Calculus), but there is some evidence that 16 (Linear Algebra) is unsuitable, its coverage varying widely from year to year and often having large parts without much relevance to economics.
  3. I propose the following solution to these difficulties. We should normally require that all students take and pass Mathematics 19. It is better that mathematical analysis be taught by a professional mathematician, and certainly until we have such a person in the Department itself, this course should be taken in the Mathematics Department.
  4. In addition, it is proposed that all students normally be required to take and pass a one semester 3 hour course on linear economic systems. Prerequisites would be only the usual requirements for graduate admission (courses equivalent to our 301-2, plus one year of calculus), and the course would have a 600 number.
  5. The levels of economics and mathematics in the course would be approximately those of Dorfman, Samuelson and Solow’s Linear Programming and Economic Analysis, although this is not in fact a very satisfactory textbook. The course would cover such topics as the following:
    1. Mathematical Tools
      1. Elements of the theory of linear transformations, vectors and matrices, determinants.
      2. Special matrices of particular relevance to economics, e.g. nonnegative matrices, symmetric matrices, positive definite matrices.
      3. Elements of linear and nonlinear programming, with a strong focus on duality theory but little on computational aspects.
      4. Elements of the theory of convex sets and functions.
    2. Economic Theory
      1. Models of Leontief type: Theory, and some empirical applications.
      2. Typical linear programming problems: linear models of production and transportation
      3. Linear models in welfare economics, general equilibrium, capital accumulation
      4. Game theory, including a discussion of Von Neumann-Morgenstern utility index.
  1. It would probably be best if the course were offered each year in the second semester and if it were normally taken by first-year students, who would by then already have had our 601 and Math. 19; this would contribute to the student’s economic and mathematical “maturity”. The course itself could be given by any one of several people in this Department, and the above list of topics is meant only to be typical, not mandatory. If the economic theory were interspersed among the mathematics that would perhaps add to the interest of both, but that is a matter of pedagogy to be decided by the individual teacher.
  2. At the present time only the more mathematically inclined of our students are exposed systematically to the large body of relevant and recent knowledge covered by such a course. Even if we do not agree (a) that we should have any mathematics requirement at all, or (b) that even if we do, such a course in linear systems would be an appropriate part of the requirement, there would still be a strong case for including this course in the catalogue.

Peter Newman

2/13/68

 

Source: Johns Hopkins University, Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy Records, Series 6, Box 1, Folder 3.

Categories
Chicago Economists Fields

Chicago. Ph.D. Field exam reports by Viner, Wright, and Millis. 1923

 

 

 

Today’s posting provides an observation from the paper-flow in reporting the results of Ph.D. field exams at the department of political economy of the University of Chicago in the 1920’s. Fields examined were capitalistic organization, government administration, trusts, economic history, and labor.

Of the five Ph.D. students mentioned in the following Ph.D. field exam reports from August 1923 only two were awarded Ph.D.’s by the University of Chicago economics department:

Elinor Evangeline Pancoast [the link takes you to a few blog posts from a currently inactive blog by a woman who has examined the Pancoast papers archived at Goucher College] received her Ph.D. in Autumn,1927 with the dissertation “The photo-engravers’ union”. She went on to teach at Goucher College in Baltimore. She lived to be 100!

Lewis Carlyle Sorrell received his Ph.D. in Autumn, 1928 with the dissertation “Transportation and traffic in industry” and went on to Professor of Transportation and Traffic in the School of Business at the University of Chicago.

 

_______________________

Jacob Viner’s handwritten report

The Quadrangle Club
Chicago

Dear Mr. Millis,

I am reporting to you on the Ph.D. papers, on the understanding that in the Dean’s absence you have assumed the task of supervision

Fife. Capitalistic Organization. Passed.
Miss Pancoast. Government Administration. Passed.
Lynn. Government Administration. Failed.

            I think there should be no hesitation in accepting Mr. Fife’s and Miss Pancoast’s papers. They are both good papers, showing thorough preparation, a good grasp of the problems discussed, and considerable independence of judgment.

Lynn’s paper is poor. On several of the questions he is absolutely at sea, and on none of them does he display any measure of ability or knowledge above the middling grade.

J. Viner

Fife’s and Miss Pancoast’s papers have been sent on to the others.

_______________________

C. W. Wright’s handwritten report

THE UNIVERSITY OF CHICAGO
The School of Commerce and Administration

Memorandum to Miss McKugs from C.W. Wright, Aug 14 192[3]

I have to report as follows on the examinations taken for the Ph.D.

L. C. Sorrell. Trusts. Passed A-
Elinor Pancoast. Economic History [Passed] A-
Harry Fife. [Economic History] [Passed] B
A. J. Lynn [Economic History] Not passed D

C.W. Wright

_______________________

H. A. Millis first typed memo

THE UNIVERSITY OF CHICAGO
Department of Political Economy

August 20, 1923

Memorandum re examinations for the doctorate.

I have read the Labor papers written two weeks ago by candidates for the doctorate. Mr. H. A. Fife’s paper grades A or A-, that by Mr. C. F. Lay slightly under C. Fife and Lay are therefore passed. I do not regard Mr. A. J. Lynn’s paper as passable. I shall have other members of the department read it, and then make final report.

Signed: H. A. Millis

_______________________

H. A. Millis second typed memo

THE UNIVERSITY OF CHICAGO
Department of Political Economy

Memorandum re Exams for the Doctorate.

I have graded Labor papers by Fife and Lay, A- and C-. Hitchcock, Viner and I have all three found Lynn’s paper in Labor below the passing point. Viner and I grade his paper in Govt Adm. below passing while Merriam grades it D. Viner and I grade Miss Pancoast in this same field B or A- and Merriam says it is at least a “good paper”

Signed: H. A. Millis

 

Source: University of Chicago Archives. Economics Department, Records & Addenda. Box 35, Folder 14.

 

Categories
Fields Harvard

Harvard. Economics Ph.D. Candidates’ General/Special Examination Fields, Committees. 1918-19

 

 

For nine Harvard economics Ph.D. candidates this posting provides information about their respective academic backgrounds, the six subjects of their general examinations along with the names of the examiners, their special subject, thesis title and advisor(s) (where available).

________________________________________

DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS
EXAMINATIONS FOR THE DEGREE OF PH.D.
1918-19

Notice of hour and place will be sent out three days in advance of each examination.
The hour will ordinarily be 4 p.m.

Chungtao Tahmy Chu.

General Examination in Economics, Thursday, November 14, 1918.
Committee: Professors Bullock (chairman), Whipple, Carver, Persons, and Dr. Lincoln.
Academic History: Harvard College, 1914-17; Harvard Graduate School, 1917—. A.B., 1917. Assistant in Economics, 1917-18.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1760. 3. Statistical Method and its Application. 4. Money and Banking. 5. Municipal Government. 6. Public Finance.
Special Subject: Public Finance.
Thesis Subject: “Taxation of Salt.”

John Henry Williams.

Special Examination in Economics, Friday, November 15, 1918.
General Examination passed May 7, 1917.
Academic History: Brown University, 1909-12; Harvard Graduate School, 1915-17. A.B., Brown, 1912; A.M., Harvard, 1916; Instructor in English, Brown University, 1912-15. Sheldon Travelling fellow in Argentina, 1917-18. Instructor in Economics 1918-19.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Public Finance. 4. Labor Problems. 5. History of Political Theory. 6. International Trade and Tariff Policy.
Special Subject: International Trade.
Committee: Professors Taussig (chairman), Bullock, Carver, and Dr. Persons.
Thesis Subject: “Argentine International Trade Under Inconvertible Paper Money, 1880-1900.”
Committee on Thesis: Professors Bullock, Taussig, and Carver.

Norman John Silberling.

Special Examination in Economics, Monday, May 12, 1919.
General Examination passed November 6, 1916.
Academic History: Harvard College, 1910-14; Harvard Graduate School, 1914—. A.B., 1914; A.M., 1915. Assistant in Economics, 1915-17.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Statistical Method and its Application. 4. Social Reforms. 5. Sociology. 6. Psychology.
Special Subject: Money and Banking.
Committee: Professors Bullock (chairman), Carver, Day, Langfeld, Dr. Persons, and Dr. Lincoln.
Thesis Subject: “A History of British Theories of Money and Credit, 1776-1848.”
Committee on Thesis: Professors Bullock, Day, and Dr. Monroe.

Joseph Lyons Snider.

General Examination in Economics, Wednesday, May 14, 1919.
Committee: Professors Carver (chairman), Ripley, Foerster, Burbank, and Dr. Persons.
Academic History: Amherst College, 1911-15; Harvard, February 1917—. A.B., Amherst College, 1915; A.M., Harvard, 1918. Assistant in Public Speaking, Amherst, 1915-16; assistant in Social Ethics, Harvard, 1917-19; instructor in Radcliffe College and Wellesley College, 1918-19.
General Subjects: 1. Ethical Theory. 2. Economic Theory. 3. Poor Relief. 4. Social Reforms. 5. Sociology. 6. Statistics.
Special Subject: Sociology.
Thesis Subject: “Feeble-mindedness in Massachusetts.” (With Professor Carver.)

Benjamin Walter King.

General Examination in Economics, Friday, May 16, 1919.
Committee: Professors Bullock (chairman), Ripley, McIlwain, Day, Dr. Persons, and Dr. Lincoln.
Academic History: West Virginia University, 1904-09; University of Chicago, 1912-13; Harvard Graduate School, 1915-17, 1918—. A.B., West Virginia University, 1909; A.M., Harvard, 1917. Assistant in Economics, 1917.
General Subjects: 1. Economic Theory and its History. 2. History of Political Theory. 3. Economics of Corporations. 4. Economic History since 1750. 5. Railways. 6. Statistical Method and its Application.
Special Subject: Statistical Method and its Application.
Thesis Subject: “Inquiry into Prices.” (With Dr. Persons.)

Robert Herbert Loomis.

General Examination in Economics, Tuesday, May 20, 1919.
Committee: Professors Ripley (chairman), Bullock, Carver, Dr. Hooton, and Dr. Persons.
Academic History: Clark College, 1908-11; Harvard Graduate School, 1914-18. A.B., Clark, 1911; A.M., Harvard, 1918. Teacher, Fay School, Southboro, 1912-14; Assistant in Social Ethics, 1915-16; Tutor in the Division of History, Government, and Economics, 1916-17. Instructor in Economics, Simmons College, 1918-19.
General Subjects: 1. Economic Theory and its History. 2. Statistical Method and its Application. 3. Labor Problems. 4. Socialism and Social Reform. 5. Anthropology. 6. Economic History since 1750.
Special Subject: Economic History since 1750.
Thesis Subject: “Development of the Boot and Shoe Industry in Massachusetts since 1875.” (With Professor Gay.)

Duncan Clark Hyde.

General Examination in Economics, Tuesday, May 27, 1919.
Committee: Professors Bullock (chairman), Carver, McIlwain, Day, Dr. Persons, and Dr. Lincoln.
Academic History: McGill University, 1913-17; Harvard Graduate School, 1917—. A.B., McGill, 1917; A.M., Harvard, 1918.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Statistical Method and its Application. 4. Sociology. 5. History of Political Theory. 6. Public Finance.
Special Subject: Public Finance.
Thesis Subject: “Canadian War Finance.” (With Professor Bullock.)

Wilfred Eldred.

Special Examination in Economics, Thursday, May 29, 1919.
General Examination passed April 29, 1912.
Academic History: Washington and Lee University, 1906-09; Harvard Graduate School, 1910-14. A.B., Washington and Lee, 1909; A.M., ibid., 1909; A.M., Harvard, 1911. Instructor in Economics, 1912-14. Instructor in History and Economics, San Diego High School and Junior College, 1914-15. Instructor in Economics, Leland Stanford Junior University, 1915-17.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Public Finance and Financial History. 4. Money, Banking, and Crises. 5. Transportation and Foreign Commerce. 6. History of American Institutions.
Special Subject: Economic History of the United States.
Committee: Professors Carver (chairman), Hart, Bullock, Ripley, and Dr. Monroe.
Thesis Subject: “The Wheat and Flour Trade Under Food Administration Control.” (With Professor Carver.)
Committee on Thesis: Professors Carver, Ripley, and Burbank.

Martin Gustave Glaeser.

General Examination in Economics, Saturday, May 31, 1919.
Committee: Professors Ripley (chairman), Bullock, Carver, McIlwain, Foerster, and Dr. Lincoln.
Academic History: University of Wisconsin, 1906-07, 1908-11, 1913-17. A.B., 1912. Assistant in Business Extension Division, University of Wisconsin, 1910-11. Special lecturer in Public Finance, University of Wisconsin, 1917.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Economics of Corporations. 4. Labor Problems. 5. History of Political Theory. 6. Transportation.
Special Subject: Transportation.
Thesis Subject: “The Cost of Service Theory in Rate Regulation.” (With Professor Ripley.)

Source: Harvard University Archives. Harvard University, Examinations for the Ph.D. (HUC 7000.70), Folder “Examinations for the Ph.D., 1918-19”.

Image Source: Dedication of the Widener Memorial Library, 1915.  Library of Congress Prints and Photographs Division Washington, DC.

 

Categories
Fields Harvard Regulations Statistics

Harvard. Use of written general examination for quantitative methods in economics, 1968

 

We can see in the following memo how the traditional oral examinations had to be adapted for a field such as quantitative methods that does not lend itself readily to oral examination while still holding to the principle of a general oral examination  “to assess the candidate’s general ability to use the tools of theory and quantitative methods and to understand the interrelation of different parts of the discipline.” I am surprised that they were apparently still using oral examination for quantitative methods up through the 1967 “generals season”.

___________________________

Additional Oral General Examiner for Students Taking Written Quantitative Methods Exam

April 10, 1968

Memo to: Members of Department of Economics
From: Richard E. Caves, Chairman

At its meeting of February 27, the Department of Economics voted to change the examining procedure for the field of quantitative methods. A written exam will now be given in this field, with the result that students having a write-off and presenting the field of quantitative methods will be offering only two fields on the oral examination. It was voted that, in these cases, a third examiner be present to judge the candidate’s general ability to use economic reasoning and his proficiency as an economist.

A number of members of the department will be asked to take up this open-ended rule in oral examinations during the Spring generals season. Discussion at the Department meeting indicated an agreement that the third examiner should not raise detailed questions of substance outside of the two fields being presented for specific oral examination, but should try to assess the candidate’s general ability to use the tools of theory and quantitative methods and to understand the interrelation of different parts of the discipline. It was suggested that the third examiner might either take his turn at the end of the examination or break in periodically during examination in the two specific fields. He also might, if practical, develop questions on the basis of the candidate’s performance in the written theory and statistics examinations.

The new system of oral examination may call for some change in our traditional method of grading a general examination, which involved each examiner giving a grade both on his own field and on the examination as a whole. It may be more suitable, depending upon the course of the individual examination, for the third examiner to evaluate only the examination as a whole. The grade on the written statistics examination should be taken into account in the same way that the grade on the written theory exam has been in the past.

The Department viewed the inclusion of a third examiner as experimental. I hope that members of the department who have taken up this role will discuss it among themselves to help us develop a standard of practice in this area an to evaluate its usefulness.

 

Source: John Kenneth Galbraith Papers. Series 5. Harvard University File, 1949-1990. Box 526, Folder “Harvard University Department of Economics: General correspondence, 1967-1974 (3 of 3)”.

Image Source:  “Bye-Bye, Blue Books?” in Harvard Magazine, July/August 2010.