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Harvard. University Overseer objects to hiring Alvin Hansen. 1937

Harvard’s hiring of Alvin Hansen, the future “American Keynes”, met with disapproval from high up in the U. S. Department of State. The reservations were easily overcome as can be seen in Harvard President Conant’s polite yet firm response to the telegram sent him urging him to block Hansen’s appointment to a tenured professorship.

William Richards Castle Jr. (1878-1963) graduated from Harvard in 1900, was an instructor of English and later Freshman Dean from 1904 to 1913. These Harvard connections helped him later to climb to the top of the U.S. foreign policy establishment. Politically he was fiercely anti-New Deal. From 1935 to 1941 he served as a member of the Harvard Board of Overseers which is why he must have felt it to be both his right and his duty to shoot this late torpedo at Dean John William’s candidate.

The quoted source with a negative opinion of Alvin Hansen’s qualifications was Herbert Feis (1893-1972), who likewise was a Harvard man, A.B. (1916) and Ph.D. (1921). Feis was serving as adviser on economic affairs to the Secretary of State, Henry L. Stimson. Herbert Feis is an interesting enough economics Ph.D. alumnus to warrant a dedicated post here at Economics in the Rear-view Mirror. An unanswered question is what might have accounted for Feis’ low professional esteem regarding Hansen. 

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WESTERN UNION

1937 MAY 12 PM 12:34
WASHINGTON DC

PRESIDENT CONANT
HARVARD COLLEGE CA

FEIS KNOWS HANSON WELL SAYS HE IS A THOROUGH WORKER WHO TRIES TO BE INDEPENDENT GOOD IN HIS SPECIAL FIELD BUT BY NO MEANS GREAT HE CHOOSES SIGNIFICANT PROBLEMS BUT TREATS THEM SOMEWHAT NARROWLY AS HE HAS LITTLE BACKGROUND IN HISTORY AND GOVERNMENT POLICIES HE GIVES SENSE OF INTELLECTUAL DOGMATISM HAS ABRUPT UNPREPOSSESSING MANNER ANTAGONIZING MANY FEIS THINKS HIM GOOD BET FOR TEMPORARY APPOINTMENT BUT WOULD GREATLY REGRET PERMANENT APPOINTMENT

W R CASTLE.

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Copy of Conant’s Reply to Castle

June 9, 1937

Mr. W. R. Castle
2200 S Street, N.W.
Washington, D. C.

Dear Mr. Castle:

After receiving your information about Professor Hansen, I proceeded to investigate the  whole question very thoroughly, as I was, of course, very much disturbed by what Dr. Feiss [sic] stated to you in confidence. After making this investigation, I was convinced, in spite of Dr. Feiss’ [sic] negative conclusions, that the appointment was one we should make. In this decision Dean Williams and other members of the Department of Economics agree (of course, no one except Dean Williams knows of your inquiry). I have heard excellent reports on Professor Hansen from other people in the State Department and from economists in other institutions. On the basis of all this evidence, therefore, we have proceeded with the appointment.

I am asking Dean Williams to drop in on you in Washington and discuss certain matters connected with the School and, incidentally, tell you a little more about the matter of Professor Hansen, as I am sure you would be interested in the reasons which led us both to go contrary to the advice which we received through your kindness.

I am deeply appreciative of your having taken the trouble to look into this matter and I am sure you will understand that in all such matters it is a question of weighing the pros and cons which one receives fron different sources.

Very sincerely yours,

[stamp] JAMES B. CONANT

Source:  Harvard University Archives. Records of President James B. Conant, Box 81, Folder “Economics 1936-37”.

Image Source: Alvin Hansen from the Harvard Class Album 1945. Book in the foreground is The Seven Myths of Housing by Nathan Straus that was published in January 1944. The bits of newspaper one can read  /…Tribune…/…by big R.A.F…./…-Day Breathing…/…Novgorod…” so my guess is that the newspaper is from late January 1944. A large-scale R.A.F. attack on Magdeburg and the Soviets recapture of Novgorod both occurred on  January 21, 1922.

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Harvard. Department of Economics Newsletter. Dunlop, Sept 1964

Just as families produce holiday newsletters to chronicle the comings and goings during the calendar year, economics departments over time have gotten into the habit of documenting the work of the department for each of their academic years. This post provides the report written by John Dunlop for the Harvard Economics Department and published in September 1964. By itself the report represents a single slice of history, but Economics in the Rear-view Mirror makes a special effort to transcribe such reports wherever and whenever they are found to assemble a complete loaf of departmental history.

___________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS NEWSLETTER

Prepared by
Professor John T. Dunlop
Chairman

Published by
THE HARVARD FOUNDATION FOR ADVANCED STUDY & RESEARCH
77 Dunster Street
Cambridge, Massachusetts 02138

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ECONOMICS DEPARTMENT NEWSLETTER
SEPTEMBER 1964

UNDERGRADUATE PROGRAM

The undergraduate concentration in Economics in the year 1963-64 increased appreciably as indicated by the following tabulation:

1961-62 1962-63 1963-64
Sophomore Concentrators 90 78 (7) 135 (11)
Junior Concentrators 97 91 (3) 91 (10)
Senior Concentrators 85 100 (3) 94 (3)

(Numbers in parentheses indicate Radcliffe students and are included in the totals).

Enrollment in undergraduate courses in the Department continued at a high level. There were, for instance, 700 students in Economics I in the fall and 678 in the spring term.

After three years as head tutor, Dr. H. Francois Wilkinson, who helped appreciably to improve our undergraduate teaching, accepted a position at Dartmouth. Dr. Lars Sandberg, who was awarded his Ph.D. degree during the year, has been appointed Instructor and head tutor starting July 1, 1964. Dr. Sandberg was an undergraduate concentrator in the Department and was graduated summa cum laude in the class of 1961.

The Allyn Young Prize for 1963-64 was awarded to Mr. Lawrence J. White as the undergraduate concentrating in Economics who submitted the best honors thesis of “summa quality.” His thesis was entitled “Devaluation, Debacle, and Aftermath: The Canadian Dollar, 1960-63.”

Mr. Duncan M. Kennedy was the winner of the John H. Williams Book Prize, which is awarded each year to the outstanding Harvard senior graduating summa cum laude majoring in Economics.

GRADUATE INSTRUCTION

The Department announced a new Graduate Prize fellowship program designed to improve the competitive position in the recruitment of the best graduate students. The program provides for up to 15 prize fellowships to be awarded each year. The students are to be assured four years of financial support; in the typical case the first two years are to be on scholarships at the rate of $3,500 a year and the following two years on part-time teaching assignment. The program was worked out with the initiative and support of Dean Ford and Dean Elder. The Department believes that the program will be particularly helpful to meet the very difficult present problem of financial support in the second year of graduate school. Although it is too early to appraise the results even for the first year, the preliminary indications are that the new program was helpful in improving the quality of our acceptances for the year 1964-65.

The Department announced that it had received a gift to honor Mrs. Selma Goldsmith and had decided to use the funds to provide a prize for the best paper prepared in a graduate seminar. The Goldsmith Prize of $100 will be awarded in October 1964 for the first time for papers completed in the current academic year. The prize paper will also be considered for publication in the Quarterly Journal of Economics.

The Department has been greatly concerned to increase the extent to which graduate students, particularly in their second year, take working seminars in which they write substantial papers and present them for discussion. The Department intends to press students in this direction, making at least one working seminar the normal pattern in the second year. The Department is increasing the number of such seminars to provide more opportunity for students to elect such seminars.

In 1963-64 the Department used a total of $8,000 in subsidized computer funds. This figure represents participation in subsidized computer time by 44 graduate students, 9 undergraduates and 9 members of the junior staff.

For the period July 1, 1963 to June 30, 1964, 34 Ph.D. degrees were awarded in the Department of Economics. The list is attached.

The Wells Prize for 1963-64 was awarded to Dr. Albert Fishlow of the Department of Economics of the University of California (Berkeley) for his manuscript entitled “Railroads and the Transformation of the Anti-Bellum Economy.”

SCIENCE AND TECHNOLOGY: IBM GRANT

A development of considerable potential significance to the Department was the announcement that IBM had agreed to provide Harvard University with $500,000 a year for ten years for a University-wide program in the general field of Science and Technology. Many members of the Department, and members of the junior staff and Ph.D. candidates, do research in areas relevant to this general field. Professors Kaysen and Dunlop of the Department are members of the University-wide committee which prepared the application and which has been appointed by President Pusey to administer the grant.

NEW PERMANENT POSITIONS AND CHANGES IN APPOINTMENTS

Three new professors were added to the senior staff of the Department of Economics from three newly created professorships. Two senior members retired during the year.

On April 4, 1963 Dean Ford authorized the establishment of a new permanent position in the Department. Professor Hollis Chenery of Stanford University and currently with A.I.D., has been appointed to the Department, and he is to be in residence starting with the Spring term 1965. Professor Chenery is a specialist in the fields of economic development and input-output analysis.

On January 20, 1964 the George Gund Professorship of Economics and Business Administration was established jointly in the Faculty of Arts and Sciences (in the Department of Economics) and in the Graduate School of Business Administration. The funds for this new professorship were raised under the leadership of Mr. Dwight Robinson, who had been Chairman of the Visiting Committee for a term expiring June 30, 1963, and Mr. David Rockefeller, who is the current Chairman. Professor John Lintner of the Harvard School of Business Administration was appointed to this new joint professorship and joins the Department with the new academic year. On the average he will devote half of his time to the Department and half to the Business School. Professor Lintner is a specialist in the fields of business decision making and the economic outlook. He will be particularly responsible for an undergraduate course in the Economics of Managerial Decisions.

The Littauer School of Public Administration established during the year a new professorship in the field of economic development and international economic relations. Professor Albert O. Hirschman of Columbia University was appointed to this new professorship and will begin his work in Cambridge in the fall of 1965. Professor Hirschman is to be a member of the Department of Economics and its executive committee.

Two senior members of the Department were retired during the year. Professor Seymour Harris was a Harvard undergraduate, class of 1920, and took his Ph.D. degree here in 1926. Professor Harris had been on the teaching staff of the Department for 40 years, serving as Chairman of the Department in the period 1955 to 1959. Professor Harris joined the staff of the University of California, La Jolla campus, in February 1964.

Professor Overton H. Taylor joined the teaching staff of the Department in 1924, and on his retirement at the end of this academic year has accepted an appointment at Vanderbilt University.

STAFF: VISITING PROFESSORS AND LEAVES

During the academic year the Department’s instructional staff was supplemented from other insitutions by the following: Professor Herbert S. Levine of the the University of Pennsylvania in the field of the Soviet Economy; Professor Edwin Mansfield, who came to us from the Carnegie Institute of Technology, in the field of Quantitative Methods and Econometrics; Professor Zenon S. Zannetos from M.I.T. continued to teach a one-term undergraduate course, the Economics of Managerial Decisions, for a second year; Dr. John Arena from the staff of the Federal Reserve Bank of Boston assisted Professor Duesenberry in a course; and Mr. John J. Mauriel from the Harvard School of Business Administration was in charge of the undergraduate course in accounting in the Spring term.

The following members of the Department were on leave during the year: Professor Bergson was on sabbatical leave at the Center for Advanced Study in the Behavioral Sciences at Stanford; Professor E. H. Chamberlin was on leave in Cambridge with the Frank W. Taussig Research Professorship; Professor Hendrik S. Houthakker was on leave in Western Europe on a Ford Faculty Fellowship as nominated by the Department; Professor Gottfried Haberler was on sabbatical leave in Western Europe during the Spring term. A larger number of permanent members of the Department were in residence than in recent years.

Among the Assistant Professors, Thomas Wilson was on leave throughout the year working with the Royal Commission on Taxation in Ottawa; Elliot Berg was on leave in Cambridge in the Spring term.

During the year 1964-65 Professor George Break of the University of California will be visiting professor teaching in the tax and fiscal policy area; Professor Barry Supple from the University of Sussex in England will teach Economic History in the fall term; and Professor Pieter de Wolff from the Hague and the University of Amsterdam will be Frank W. Taussig Research Professor. Dr. John Arena of the Federal Reserve Bank of Boston will give an undergraduate course on financial institutions from the resources made available by the Political Economy Lectures Fund (1889). Dr. Maureen Brunt from Australia is to be a Visting Lecturer for a two year period working particularly in the field of Comparative Industrial Organization.

PROFESSIONAL AND PUBLIC ACTIVITIES OF THE DEPARTMENT STAFF

Professor Abram Bergson spent the year at the Center for Advanced Study in the Behavioral Sciences at Stanford, and has written a monograph now in the press, entitled The Economics of Soviet Planning. He continues as Director-at-large of the Social Science Research Council, and as a member of its Committee on Economy of Communist China.

Professor Richard Caves published during the year American Industry: Structure, Conduct, Performance, in Foundations of the Modern Economic Series, Prentice Hall. He completed research and writing of Northern California’s Water Industry: Public Enterprise and Scarce Natural Resources (jointly with J. S. Bain, J. Margolis, V. Ostrom) under a grant from Resources for the Future and scheduled for publication in 1965. He served on the Review Committee for Balance of Payments Statistics of the U. S. Bureau of the Budget, and consulted with the Council of Economic Advisers and the Council for Economic Development.

Professor Edward Chamberlin was elected to the Real Academia de Ciencias Economicas y Financieras, Barcelona, and a Communication on “Excess Capacity” was read before the Academy in March 1964 and printed in Italian translation in the Rivista Internazionale di Scienze Economiche e Commerciale, Milan, Spring 1964. He was also re-elected to the American Academy of Arts and Sciences. During the year the eighth edition of his book Theory of Monopolistic Competition was issued by the Harvard University Press, and the second edition of Economic Analysis of Labor Union Power also appeared.

Professor Robert Dorfman was elected President of the Institute of Management Science; he also participated in a Study Week on Econometrics at the Pontifical Academy of Sciences in the Vatican in October 1963.

Professor James Duesenberry’s article on monetary economics, “The Portfolio Approach to the Demand for Money and Other Assets,” appeared in the February 1963 National Bureau of Economic Research Supplement to the Review of Economics and Statistics. He was consultant to the Board of Governors of the Federal Reserve; he continued as consultant to the Treasury and the Council of Economic Advisers; he also continued as Acting Co-Chairman of the Econometrical Model Project of the Social Science Research Council and Co-Director of the Merrill Capital Markets Project at the Harvard Business School.

Professor John T. Dunlop’s article “Job Creation: Private and Public Manpower Policies” appeared in Proceedings of A Symposium on Employment, sponsored by the American Bankers Association. A revised edition of Industrialism and Industrial Man (with three other authors) was published by Oxford University Press, Galaxy Book Edition. Five volumes were published in the year in the Wertheim Series from research projects under Professor Dunlop’s direction: three in the history of labor-management organization and two treating international labor questions. He continued as a member of the President’s Missile Sites Labor Commission and was appointed to the President’s Committee on Equal Opportunity.

Professor Otto Eckstein published Economic Policy in Our Time, with eight European scholars (3 vols.), North Holland Publishing Company; and Public Finance, in Foundations of Modern Economic Series, Prentice-Hall. Professor Eckstein is editor of the Series. He also edited and has written an introduction to Studies in the Economics of Transfer Payments to be published by the Brookings Institution. Professor Eckstein becomes a member of the Council of Economic Advisers on September 1, 1964.

Professor J. Kenneth Galbraith published during the year Economic Development, Harvard University Press and Houghton Mifflin Company. He gave the American Association for the Advancement of Science Distinguished Lecture in December 1963, and gave the Charter Day Address, University of California at Davis, May 1964. He received LL. D. degrees from four universities: University of Massachusetts, Brandeis University, University of California and Loyola College (Baltimore).

Professor Alexander Gerschenkron published during the year a number of articles and chapters in books, including the following: “Agrarian Policies and Industrialization: Russia 1861-1914” in The Cambridge Economic History of Europe, Vol. VI; “Reflections on Economic Aspects of Revolutions,” in Internal War, Harry Eckstein, ed., Glencoe, 1964; “City Economies, Then and Now,” in The Historian and the City, Harvard University Press, 1963. He gave a lecture entitled The Stability of Dictatorships under the auspieces of the Harvard Foundation at Yale, 1963.

Professor Gottfried Haberler completed his term as President of the American Economic Association in December, 1963. He has been on sabbatical leave in the Spring term. He spent a month teaching in the Institute for Advanced Studies in Vienna, and has been lecturing at various universities in Western Europe.

Professor Hendrik Houthakker was awarded the John Bates Clark Medal by the American Economic Association at its annual meetings in December 1963. This medal is awarded every other year “to that economist under the age of 40 who is adjudged to have made a significant contribution to economic thought and knowledge.” Professor Houthakker was on leave throughout the year and spent most of the time in Switzerland working on the Theory of Consumer Choice, which is to be published by Holden, Day late in 1964. With Dr. Lester Taylor of the Department he presented a paper “Projecting Personal Consumption Expenditures in 1970” at the Cleveland Meetings of the Econometric Society, and a second paper “Recent Empirical Experience with Dynamic Demand Function” at the Boston meetings of the Econometric Society. These papers will be published in a volume entitled United States Consumption 1929-1970.

Professor Carl Kaysen returned this academic year from two years’ leave for government service in Washington, but has continued to serve as a Special Consultant to the President. His publications this year include two book reviews: Alfred Sloane, My Years with General Motors, New Republic, February 29, 1964; and Gunnar Myrdal, Challenge to Affluence, Harvard Law Review, June, 1964. In addition, he presented a paper entitled “The New Competition and the Old Regulation” to a Conference in Modern Competitive Theory held by the Wharton School of the University of Pennsylvania in May. The proceedings of that conference will be published shortly.

Professor Simon Kuznets published a number of articles and chapters in various books during the year including: “Notes on Take-Off,” in The Economics of Take-Off Into Sustained Growth, edited by W. W. Rostow, proceedings of a conference held by the International Economic Association, St. Martin’s Press, 1963; “Economic Growth and the Contribution of Agriculture: Note on Measurement,” in The Role of Agriculture in Economic Development, Proceedings of the Eleventh International Conference of Agricultural Economists, London, Oxford University Press, 1963; “Applicacion des las Estimaciones de Renta Nacional en el Analisis y Politica del Crecimiento Economico,” in El Ingreso y La Riqueza, Seccion de Obras de Economia, Fondo de Cultura Economica, Mexico-Buenos Aires, 1963.

Professor Kuznets was elected to the Royal Academy of Sciences, Sweden; he was Chairman of the Committee on Economic Growth, Social Science Research Council and its Committee on the Economy of China. He was also Chairman of the Executive Committee, Board of Trustees, Maurice Falk Institute for Economic Research in Israel; he gave the Haynes Foundation Lectures at the University of California at Riverside, which are to be published by the Harvard University Press.

Professor Wassily Leontief’s publications included “The Structure of Development” in Scientific American, September, 1963; and “Alternatives to Armament Expenditures,” Bulletin of the Atomic Scientists, June, 1964. He participated in a Study Week on Econometrics at the Pontifical Academy of Sciences in the Vatican in October, 1963, was Guest Professor at the Institute for Advanced Studies in Vienna in January, 1964, and lectured in Japan in May as guest of the Nihon Keizai Shimbun.

Professor Edward S. Mason published Foreign Aid and Foreign Policy, which represents the reworking of his Elihu Root Lectures given at the Council on Foreign Relations in May 1963. He was a member of a two-man Steering Committee on a large study called the Coal Transport Study undertaken by the International Bank for the Government of India. Professor Mason was awarded an honorary LL.D. degree by Yale University in June 1964.

Professor John Meyer published the following: Investment Decisions, Economic Forecasting and Public Policy (with Robert Glauber), Division of Research, Harvard Graduate School of Business, 1964; “Investment, Liquidity and Monetary Policy,” (with Edwin Kuh), Impacts of Monetary Policy, Prentice-Hall, 1964; “Competition, Market Structure and Regulatory Institutions in Transportation,” Virginia Law Review, 1964. Professor Meyer is Director of a new formal program of studies in transportation, location and land use problems which has been inaugurated within the Graduate School of Public Administration. This program has put particular emphasis upon the transportation planning problems of the newly industrializing countries. A substantial part of the research program has been financed by a grant from The Brookings Institution with A.I.D. funds.

Professor Thomas Schelling continued to divide his time between the Department of Economics and the Center for International Affairs, his main research interest being conflict theory and military policy. He “unofficially estimates that he may have set a record for war college visits, having lectured at six within the year, to wit: The National War College, Army War College, Air War College, Navy War College, NATO, and the Israeli Defense College.” He also lectured at the Air Command Staff College.

Professor Arthur Smithies published “Inflation in Latin America” in Public Policy. He recently completed a research paper on Program Budgeting for the Rand Corporation, which will be published. He continued as consultant to the Treasury and as Editor of the Quarterly Journal of Economics and Economic Abstracts. Professor Smithies was Visiting Lecturer in Brazil under the auspices of A.ID., and was also Advisor in Argentina under the sponsorship of the Harvard Development Advisory Service.

Ph.D. Degrees in Economics Awarded in 1963-64
Aaron, Henry Jacob “Social Security in an Expanding Economy”
Ahmad, Ziauddin “Deficit-Financing, Supply Response and Inflation in Underdeveloped Countries”
Ahtiala, Kaarlo Pekka “The Short-Term Adjustment Mechanism on the Bond Market”
Almon, Shirley Montag “The Distributed Lag Between Capital Appropriations and Expenditures”
Bateman, Cleveland Worthington “Investment Behavior and the Acceleration Principle”
Bolton, Roger Edwin “Defense Purchases and Regional Growth in the United States”
Bonnen, James Thomas “United States Agricultural Capacity: A General Equilibrium Model for 1965”
Brunt, Maureen Doris “Concentration in the Australian Economy”
Cohen, Benjamin Ira “A Study of the Export Policies of the Indian Government, 1951-52 to 1965-66”
Comanor, William Stephen “The Economics of Research and Development in the Pharmaceutical Industry”
Davie, Bruce Fenwick “State & Local Government Bond Issues Before 1913 – A Study of Increasing Market Perfection”
Dorsey, John Wesley “The Mack Case: A Study in Unemployment”
Eckstein, Salomon “Collective Farming in Mexico”
Edwards, Franklin Richard “Concentration and Competition in Commercial Banking: A Statistical Study”
Eisenmenger, Robert Waltz “The Dynamics of Economic Growth in New England 1870-1960”
Enzer, Hermann “Learning on-the-job: A Process Analysis”
Gandhi, Ved Parkash “Tax Burden on Indian Agriculture”
Glimp, Fred Lee “The Entrepreneureal Concept and the Notion of Creative Leadership”
Hagelin, Edith Hilma “The Swedish Full Employment Policy and Economic Development, 1945-52”
Hartman, Robert William “Demand for the Stock of Non-Farm Housing”
Jack, Andrew Barrie “The Marketing Function of the Innovating Entrepreneur: the Sewing Machine and Garment Industry in the United States”
Johnson, William Arthur “India’s Iron & Steel Industry: A Study of Planned Industrial Growth”
Lithwick, Norman Harvey “Economic Growth in Canada – a Quantitative Analysis”
McGuire, Martin Cyril “Information and Arms Races”
Madjid, Abdul Hadi “A Dynamic Input-Output Model Incorporating Technical Change”
Mallon, Richard Dicks “Economic Development and Foreign Trade of Pakistan”
Perkins, Dwight Heald “Price Formation in Communist China”
Pincus, John Alexis “Economic Aid and International Cost Sharing”
Prescott, James Russell “The Economics of Public Housing: A Normative Analysis”
Ryan, William Francis “Economic Development and the Church in French Canada 1896-1914”
Sakr, Mohamed Ahmed H. “Economic Integration and the Growth of Less-Developed Countries”
Sandberg, Lars Gunnarsson “Swedish Economic Policy in Theory and Practice, 1950-1961”
Shaw, Lawrence Hugh “A Measure of the Effects of Weather on Agricultural Output”
Warden, Charles Browne “Unemployment Insurance: A Statistical Study of Massachusetts Experience”

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archives. Edward H. Chamberlin Papers, Box 17, Folder “Economics Department 1964”.

Image Source: Portrait of John T. Dunlop in Harvard Classbook 1952.

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Exam Questions Harvard Law and Economics

Harvard. Exams for law of industrial relations and commerce. Wyman, 1907-1908

Harvard Law School, ca. 1901

Assistant Professor Bruce Wyman’s course on industrial relations and commercial law was offered as a vocational sop to Harvard economics majors that along with William Morse Cole’s principles of accounting course was intended to help prepare a young Harvard graduate planning to enter a career in business. This could help account for the popularity of the course as seen in its relatively high enrollment — that and its reputation of being something of  a “snap course”.

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From earlier years

1901-02. Autobiographical note, enrollment, course description, syllabus, exams.
1902-03. Obituary, enrollment, course description, exams.
1903-04. Enrollment and exams.
1904-05. Enrollment, course description, exams.
1905-06. Enrollment, paper assignments, exams.
1906-07. Enrollment, paper topics, exams.

________________________

Course Enrollment

Economics 21. Asst. Professor Wyman, assisted by Messrs. Field and Otis. — Principles of Law governing Industrial Relations and Commercial Law.

Total 93: 3 Graduates, 56 Seniors, 21 Juniors, 10 Sophomores, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1907-1908, p. 67.

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ECONOMICS 21
Mid-year Examination, 1907-08

(First give your answers clearly, then give your reasons briefly.)

  1. (a) White buys 10 gross of Mellin’s Food from the proprietors and pastes over the label on each bottle a large label reading “White’s Food—Better than Mellin’s—Higher in Price—But Double in Nutriment—White Mfgr.” Can Mellin stop White from doing this? (b) Could Mellin stop White from doing this if he could prove that White’s statements were false?
  2. (a) Ely buys prints of the Passaic works and with the undisclosed intention of offering them for sale later at 1 cent per yard less than the usual retail price, 8 cents. Can this be stopped; (b) Could it be if Ely had agreed not to sell them at less than the usual price, 8 cents, when he bought them?
  3. (a) The foreman of a street railway threatens to discharge employees who trade at a certain grocery. Can the grocer sue him? (b) Suppose the foreman were a partner in a rival grocery, would he have been liable?
  4. (a) A suburban street railway agrees with a city street railway that the first shall not extend its lines into the city and the second shall not extend its lines into the country. Can the city line be stopped by it from building into the country? (b) After it has done so, can it stop the country line from building into the city?
  5. (a) A combination of oil refiners agree to lower prices wherever competition appears, the one that loses money thereby to be made whole by the others pro rata. An outsider who is ruined by this policy sues a member of the association — what result? (b) The member of the association who lost money in the process sues the other members for contribution — what result?
  6. (a) A labor union in a building trade strikes in sympathy with a teamster’s union. Can it boycott butchers who sell to nonunion men who remain at work on the building? (b) Can it put a single man on the street corner nearest the work to persuade men from taking the places of the union men?
  7. (a) A & Co. is a partnership composed of A, B, and C; the fact that C is a partner being unknown to the public. The firm buys goods of X, who later learns of the position of C and sues him to the whole price — what result? (b) Suppose C was not a partner but had told Y that he was and X had learned of this later, could X sue C now?
  8. (a) A ownes 99% of the stock the B railroad company. X claims that he shipped some goods by this railroad which were lost in transit; the only evidence X has is an admission by A that the company is liable. What chance has X against the corporation? (b) Suppose A had promised to pay X $1000 in settlement, what chance would X then have against the corporation?
  9. (a) A corporation is formed by X, Y, and Z with a capital stock of $30,000, each taking $10,000, X paying $10,000 cash for his, Y $7,500, and Z $2,500. The corporation later sells $30,000 debenture bonds to L, who pledges them to M for a loan of $20,000. Later the corporation fails after a disasterous season having left goods worth $14,000. How does M come out? (b) How does Z come out?
  10. A is employing X as his salesman by the calendar year. In the middle of the year, B induces X by offer of a higher salary to quit and enter his employ at once. Can A sue B for damages? (b) Can X sue B for his salary when it comes due?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 8, Bound Volume: Examination Papers, Mid-Years 1907-08.

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ECONOMICS 21
Year-end Examination, 1907-08

First give your answers briefly; then give your reasons concisely.

  1. A, director in a steamship company, who owns 25% of its stock, buys two steamboats for $100,000 each. He offers them to his company for $130,000 each. The directors vote to purchase one, A’s vote not being necessary to carry it, and vote to leave the question of the purchase of the other to the stockholders’ meeting. The stockholders vote to purchase the other, A’s vote being necessary to pass it. A few years later a hostile management gets control, and asks counsel what the rights of the company against A are. What should he answer?
  2. A & Co. join a combination of beef packers who agree not to bid against one another in the cattle market, but arrange distribution among themselves in advance. (1) A & Co. on one occasion do bid against another member contrary to a previous deal. Can they be sued? (2) The cattle raiser refuses to deliver the cattle. Can they sue him? (3) They sell dressed beef to a butcher, delivering part. Can he refuse to pay? (4) They refuse to deliver the remainder. Can the butcher sue them?
  3. The N.Y., N.H. & H.R.R., operating in Conn., R.I., and Mass., acquires say 66 2/3% interest in the stocks of various trolley lines operating in the same states. It also acquires say 33 1/3% interest in the stock of the B. & M.R.R. operating in Mass., N.H., Vt., and Me. Is all this a violation of the Federal Anti-Trust Law? Take one side or the other of the question.
  4. A National Steel Company (1) buys 40% of the steel plants in the United States outright, (2) buys the controlling interest in the stocks of 30% more, (3) makes agreements with 20% more for division of business, (4) refuses to deal with customers who deal with the others. What danger is it in supposing there is no anti-trust statute?
  5. A lease for twenty years is made by one railroad corporation to another. The lease is ultra vires on the part of both corporations. What rights or remedies has either corporation against the other in case of a repudiation of the lease by either at the end of five years, rent having been paid for only four years?
  6. Can a street railway corporation resist as unconstitutional legislation which so reduces fares as to leave it such gross receipts as, after providing for operation and repair, maintenance and re-placement, will leave only an average of 2% upon the securities representing the cost of the enterprise and nothing for depreciation or sinking fund, surplus account or amortization of franchise?
  7. A railroad company buys coal of various operators along its route which it transports to market and sells there. An independent operator shows that at times of press of business the railroad uses part of its cars in its own coal shipments; to which the railroad company replies that it gives him his proportion of cars. This operator also shows that the railroad will buy coal at $3.00 per ton, transport it to market and sell it at $3.75, while he shipping from the same station has to pay the published rate of $1.25 per ton; to which the railroad company replies by saying that they make themselves a trainload rate of 75 cents per ton which they are willing to give him. Must he be content with these answers?
  8. A railroad line having become blocked by an accident six trains were stopped at the city of T, in the following order: (1) a passenger train, (2) a circus train, (3) a train of coal cars, (4) a refrigerator train filled with dressed beef, (5) a trainload of peaches in closed cars, (6) a trainload of lumber on flat ears. In what order should these trains be despatched?
  9. Can a gas company make special rates (1) to its directors, or (2) to hotelkeepers, or (3) to induce a storekeeper to give up the use of electricity, or (4) to customers who buy their fixtures of its contract department?
  10. Can a street railway eject a passenger who (1) has been convicted for picking pockets, or (2) has refused to pay fare the day before, or (3) has a wrong transfer which was given him carelessly by a former conductor, or (4) tenders a ten dollar bill which the conductor cannot change?

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1908-09 (HUC 7000.25), pp. 44-46.

Image Source: Harvard Law School ca. 1901 from the Detroit Publishing Company photograph collection (Library of Congress).

Categories
Economists Harvard

Harvard. Academic record of Vervon Orval Watts, Ph.D. 1932

 

Vervon Orval Watts (1898-1993) was a faithful libertarian disciple of Harvard economics professor Thomas Nixon Carver. One of his course outlines from his time at Antioch College in Ohio has been transcribed and posted earlier.

In this post you will find the paper record of Watts’ march through the Division of History, Government and Economics that was rewarded with the award of a Ph.D. by the department of economics in 1932.

_______________________

HARVARD UNIVERSITY
DIVISION OF HISTORY, GOVERNMENT, AND ECONOMICS

Application for Candidacy for the Degree of Ph.D.

[Note: Boldface used to indicate printed text of the application; italics used to indicate the handwritten entries]

I. Full Name, with date and place of birth.

Vervon Orval Watts, March 25, 1898, Walkerton, [Ontario] Can.

II. Academic Career: (Mention, with dates inclusive, colleges or other higher institutions of learning attended; and teaching positions held.)

University of Manitoba, 1914-1918; Harvard University, 1921—
Teaching Positions: Brandon College, Jan. 1 – July 1, 1919; Gilbert Plains, high school, 1919-1921; Harvard, Assistant in Economics, 1923-24 (Asst.); 1926-27 (gr.); T + T 1927-29.

III. Degrees already attained. (Mention institutions and dates.)

A.B., University of Manitoba, 1918
A.M., Harvard University, 1923.

IV. General Preparation. (Indicate briefly the range and character of your under-graduate studies in History, Economics, Government, and in such other fields as Ancient and Modern Languages, Philosophy, etc. In case you are a candidate for the degree in History, state the number of years you have studied preparatory and college Latin.)

History:— Greek + Roman, 1 course; European, 2 1/2 courses; English History, 2 courses; Canadian History 1/2 course.
Economics:— Courses in Theory, Economic History, Public Finance, Money + Banking, Foreign Trade + Finance.
Government:—  1 course, Logic:—  1 course.
Languages:— Greek + Latin.

V. Department of Study. (Do you propose to offer yourself for the Ph.D., “History,” in “Economics,” or in “Political Science”?)

Economics.

VI. Choice of Subjects for the General Examination. (State briefly the nature of your preparation in each subject, as by Harvard courses, courses taken elsewhere, private reading, teaching the subject, etc., etc.)

  1. Economic Theory and Its History.
    At Harvard – Ec. 11, Ec. 14; at Manitoba – course in Theory + its History. Private Reading.
  2. Public Finance.
    At Harvard, Ec. 31; at Manitoba – 1 course. Private Reading.
  3. International Trade + Tariff Policy.
    At Harvard – Ec. 9b, Ec. 39;
    At Manitoba – 1 course; Private Reading.
  4. Economics of Agriculture.
    At Harvard – Ec. 9a, Ec. 32;
    – Assistant in Ec. 9a, 1923,
    Private Reading.
  5. Sociology.
    At Harvard, Ec. 8,
    –Assistant in Ec. 8, 1923
    Private Reading.
  6. History of England since the Reign of Henry VII.
    At Harvard: Hist. 12; Auditor in Hist. S9 + Hist. 11.
    At Manitoba: 1 course
    Teaching of English History in high school; Private Reading.

VII. Special Subject for the special examination.

Sociology.

VIII. Thesis Subject. (State the subject and mention the instructor who knows most about your work upon it.)

The Development of the Technological Concepts of Production in Anglo-American Thought.

IX. Examinations. (Indicate any preferences as to the time of the general and special examinations.)

I should prefer the General Examination not before Feb. 1. Middle of March or few days after. [Handwritten note: “May 27/32”]

X. Remarks

Professor Carver.

Signature of a member of the Division certifying approval of the above outline of subjects.

[signed] T. N. Carver

*   *   *   [Last page of application] *   *   *

[Not to be filled out by the applicant]

Name: Vervon Orval Watts

Approved: January 11, 1924

Ability to use French certified by C. J. Bullock, May 29, 1923.

Ability to use German certified by C. J. Bullock, May 29, 1923.

Date of general examination Monday, March 31, 1924. Passed. T.N.C.

Thesis received March 28, 1932

Read by Professors Carver and Taussig

Approved May 16, 1932

Date of special examination Friday, May 27, 1932

Recommended for the Doctorate June 9, 1932

Degree conferred  June 23, 1932

Remarks.  [left blank]

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

Certification of reading knowledge
of French and German for Ph.D.

HARVARD UNIVERSITY
Department of Economics

Cambridge, Massachusetts
May 29, 1923

Dear Haskins:

This is to certify that I have examined Mr. V. O. Watts and find that he has such a knowledge of French and German as we require of candidates for the Ph.D. degree.

Very sincerely yours
[signed]
C. J. Bullock

Dean C. H. Haskins

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

General Examination, date and
examiners
[carbon copy]

Division of History, Government, & Economics
Harvard University

21 March 1924

My dear Mr. Watts:

We are arranging your general examination for the Ph.D. in Economics for Monday, 31 March, at 4 p.m. Your committee will consist of Professors Carver (chairman), Abbott, Williams, Bullock, and Dr. Meriam.

Very truly yours,
[unsigned copy]
Secretary of the Division

Mr. V. O. Watts

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

General Examination
Information Sent to Examiners
[carbon copy]

Division of History, Government, and Economics
Harvard University

24 University Hall
25 March 1924

My dear Professor [blank]

Since the Ph.D. pamphlet is not yet out, I am sending you herewith the information which will appear in it about V. O. Watts, whose general examination is to be held on Monday, 31 March, at 4 p.m.

Very truly yours,
Secretary of the Division.

Carver
Abbott
Williams
Bullock
Meriam

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

General Examination, Watts Reminder
[carbon copy]

27 March 1924

My dear Mr. Watts:

This is to remind you that your general examination for the Ph.D. in Economics is to be held on Monday, 31 March, at 4 p.m. in Widener N.

Very truly yours,
Secretary of the Division

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

General Examination, Carver Reminder
[carbon copy]

27 March 1924

My dear Professor Carver:
This is to remind you that you are chairman of the committee for the general examination of Mr. V. O. Watts for the Ph.D. in Economics, to be held on Monday, 31 March, at 4 p.m., in Widener N. I enclose Mr. Watts’s papers herewith. The other members of the committee are Professors Abbott, Williams, Bullock, and Dr. Meriam.

Very truly yours,
Secretary of the Division.

Professor T. N. Carver

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

Passed General Examination

HARVARD UNIVERSITY
Department of Economics

Cambridge, Massachusetts
April 1, 1924

Dear Professor Haskins:

I beg to report that the general examination for the Ph.D. degree of Mr. Vernon [sic] Orval Watts was held in Widener N, Monday afternoon, March 31. The committee voted unanimously to accept Mr. Watt’s examination as satisfactory.

Signed: T.N. Carver
Chairman of the Committee

Dean C. H. Haskins

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

Thesis summary still needed
[carbon copy]

March 29, 1932

Dear Mr. Watts:

Your thesis has arrived in good shape. I do not find any summary with it, however. Each thesis is required to be accompanied by a summary, not over 1200 words, which is later published by the University, along with others, in a volume. I note that you have a Digest at the beginning of your thesis; perhaps you intended this to be the summary. However, it should not be bound in with the thesis, and the form should be consecutive and not in outline as you have it. It will be a simple matter for you to re-write this Digest into an appropriate summary.

I believe I wrote you as to the date for your examination, May 27. I should be glad to hear from you confirming this, as the pamphlet goes to press soon, and I cannot hold dates open after April 1st.

Sincerely yours,
Secretary

Mr. V. O. Watts

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

Last-minute thesis preparation

Antioch college
Yellow Springs
Ohio

March 5, 1932

Secretary of the Graduate School of Arts and Sciences
Harvard University
Cambridge, Massachusetts

Dear Sir:

I have almost completed my doctoral dissertation in the field of economics, and I wish to be informed if there are any rules concerning the nature of the binding for the volume.

I am writing the thesis in Sociology under Professor Carver. Shall I send it to you or to him when it has been completed?

Very truly yours,
[signed] V. Orval Watts

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

Scheduling Special Examination

Antioch college
Yellow Springs
Ohio

March 15, 1932

Miss Helen Prescott
772 Widener Memorial Library
Harvard University
Cambridge, Mass.

Dear Miss Prescott:

I should like to have my special examination placed at the end of May or the beginning of June if that will be convenient for Professor Carver.

Sincerely yours,
[signed] V. Orval Watts

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

V. O Watts: Apology for late thesis summary

Antioch college
Yellow Springs
Ohio

March 31, 1932

Dear Miss Prescott:

I regret that my delay in writing you and in sending the summary of my thesis should have caused you the trouble and annoyance of writing me age in about it. For the past two weeks I have been exceedingly busy finishing the thesis while carrying the work of four courses. We also have an economics seminar which meets every week and I am serving on two faculty committees, one of which meets every week.

At the last moment, moreover, last Tuesday, I decided to have most of the thesis re-typed because the previous typing had been so faint. It may have been that the chemicals which are used on that ripple-finish paper may have caused the ink to fade on the earlier copy. At any rate, the work of supervising the typing and doing the proof-reading in addition to my regular teaching load led me to postpone everything I could as long as possible. I sent the summary off yesterday by special delivery, however, so that you should have received it by April first.

I should very much appreciate it if you could let me know soon whether or not my thesis appears to be acceptable. I am naturally anxious about it, especially since the last half of it has been written without Professor Carver’s supervision. It has certain merits, I believe, but I am very conscious of its short-comings. It would have been better if I had showed the earlier drafts of it to Professor Carver to secure his criticisms and suggestions; but every time I wrote a chapter I saw so many things I knew myself should be corrected that I disliked to show it to him, or to any one whose good opinion I valued, until I had done it as well as I could with it myself. In fact I still wanted to give it another revision before turning it in.

I trust that you and your sister are well. It was a pleasant surprise to discover that you were working with Professor Carver again. I am looking forward to seeing you and him again this spring, and I may bring my family along with me.

Very truly yours
[signed] V. Orval Watts

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

Letter to Carver

Antioch college
Yellow Springs
Ohio

April 8, 1932

Professor Carver:

Professor Taussig read a short article I wrote in criticism of Stuart Chase’s Tragedy of Waste when I first considered the topic of waste as a thesis subject. At that time my ideas concerning my plan of procedure were vague, and Professor Taussig merely approved the general subject of economic waste as one worthy of further development. I did not return for further conferences with him.

Most of my conferences, other than those with yourself, were with Professor Young, whom I used to consult frequently during the last year he was at Harvard. The distinction between the economic and the engineering point of view and the historical approach which I took are largely the result of those conferences.

I had several conferences with Professor R. B. Perry of the philosophy department, and he read and discussed at some length with me the first chapter. Professor Mason also read a few of my earlier essays, and I had a few talks with him concerning the general subject. I have felt, however, that he never approved
either of me or of my ideas. Professor Black has  stated the central idea of my thesis — the distinction between the economic and technological points of view — more clearly than any one else with whose work I am familiar, but I never had any conferences with him.

It seems to me that, all things considered, Professor Taussig is the most logical choice in the Economics Department for the examining board. He is very conscientious and honest in his criticisms and evaluations of students, yet I believe he is just and sympathetic towards new ideas.

I feel more keenly than ever at this time the loss of Professor Young, and I realize now that I may have made a mistake in not seeking the advice of Professor Taussig in writing my thesis after Professor Young left us. I always felt very reluctant to show my work to anyone, however, until I had done all I could with it myself. The distinction I have made in the thesis has not been clearly drawn by any other English writer, as far as I could discover, except by Professor Black, and I therefore felt it all the more necessary to state the idea as well as possible before
seeking criticism for it.

I expect to visit Cambridge and to see you and Professor Sorokin next Thursday or Friday. I am rather concerned about my ignorance of European sociology in view of Professor Sorokin’s interest in that field. I have been reading diligently in the history of sociological theory, but it is a very large field to cover, and I am hoping that Professor Sorokin may have some suggestions which will make my efforts more effective.

Sincerely yours,
[signed] V. Orval Watts

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

V. O Watts: List of Positions

Antioch college
Yellow Springs
Ohio

May 3, 1932

Dear Miss Prescott:

I have just recalled that you asked me some time ago to send you a list of the positions I have held. If you wanted the list for the pamphlet which was being printed three weeks ago when I was in Cambridge it will be too late to send it now. But in case you may have a further use for it I am giving it herewith. You have my permission, however, to mention any or all of these titles if you wish.

1918-1919. Instructor, Brandon College, Canada
1919-1921. Assist. principal, Gilbert Plains High School, Gilbert Plains Canada.
1922-1923. Thayer Scholar, Harvard University
1924-1926. Instructor in Economics and Sociology, Clark University
1926-1927. Weld Scholar, Harvard University
1917-1929. Tutor in History, Government, and Economics, Harvard University
1929-1930. Lecturer in Economics and Sociology, Wellesley College
1930–. Assoc. Professor of Economics, Antioch College

As you may guess I am very anxious concerning the progress of my thesis through the gauntlet of the readers. I should very much appreciate it if I could obtain a hint of good news from the scene of action, but I suppose that the long list of theses presented this year is delaying the progress of all of them.

Yours sincerely,
[signed]
V. Orval Watts

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

Passed Special Examination

The committee appointed to conduct the special examination of Mr. V. Orval Watts on Friday, May 27, 1932, voted unanimously to accept the examination. It was agreed by all three examiners that it was a brilliant examination..

Signed: T. N. Carver

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

Antioch College informed
that Watts completed his Ph.D.

Antioch college
Yellow Springs
Ohio

Office of the President

June 6, 1932

Dr. T. N. Carver
Department of Economics,
Harvard University,
Cambridge, Massachusetts.

Dear Dr. Carver:

I thank you for your note about Mr. V. O. Watts. It is good to know that he did so well. His interest and enthusiasm in his work with us make his scholarly qualifications all the more productive.

Sincerely yours,
[signed] Arthur E. Morgan,
President.

AEM:HG

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

Ohio State Not Hiring

the ohio state university
George W. Wrightmeyer, President
Columbus

DEPARTMENT OF ECONOMICS
M. B. Hammond Alma Herbst
A. B. Wolfe R. H. Rowntree
H. G. Hayes J. D. Blanchard
H. F. Walradt J. M. Whitsett
Grace S. M. Zorbaugh H. J. Bittermann
F. E. Held C. J. Botte
L. Edwin Smart R. T. Stevens
E. L. Bowers Louis Levine
R. L. Dewey Maurice A. Freeman
C. L. James R. L. Horne
R. D. Patton Wm. H. Mautz
Louise Stitt J. H. Sloan
Virgil Willit

June 6, 1932

Professor T. N. Carver
Department of Economics
Harvard University
Cambridge, Massachusetts

Dear Professor Carver:

I thank you for calling to my attention Mr. V. O. Watts, now teaching Economics at Antioch College. With your recommendation I do not doubt his ability to satisfy. However, the situation is about the same with us as it is at other western
institutions. We are not likely to make additions to the staff during the coming year. Those who are already employed are fighting hard to hold their jobs and there is a steady pressure on the part of graduate students to secure employment as assistants, readers, or in any other capacity, so that I do not anticipate any chance for Mr. Watts to find employment here. However, I will pass your letter to Dr. Bowers, who is acting chairman of the department, so that he can make use of it if there should be any change in the situation which calls for a new man.

I am, with best wishes,

Cordially yours,
[signed] M. B. Hammond

MBH:KU

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

Record of V. O. Watts in the
Graduate School of Arts and Sciences.

1921-22 Course

Half-Course

Economics 9a

A

Economics 9b1

A

Economics 11

B plus

Economics 322

A

Economics 392

A

German A

A minus

1922-23 Course

Half-Course

Economics 8

A

Economics 14

A minus

Economics 31

A

History 12

A minus

1923-24 Course

Half-Course

Economics 20

 

Source: Harvard University Archives. Division of History, Government & Economics, Ph.D. Degrees Conferred 1929-30. (UA V 453.270), Box 12.

__________________________

Course Names and Instructors

1921-22

Economics 9a 1hf. Economics of Agriculture [primarily for undergraduates]. Professor Carver.

Economics 9b 1hf. International Trade and Tariff Policies. Professor Taussig.

Economics 11. Economic Theory. Professors Taussig and Young.

Economics 32 2hf. Economics of Agriculture [primarily for graduates]. Professor Carver.

Economics 39 2hf. International Finance. Asst. Professor Williams.

German A. Elementary Course. Professor Bierwirth et al.

1922-23

Economics 8. Principles of Sociology. Professor Carver.

Economics 14. History and Literature of Economics to the year 1848. Professor Bullock.

Economics 41. Statistical Theory and Analysis. Professors Young and Day.

History 12. The History of England from 1688 to the Present Time. Professor Abbott.

1923-24

Economics 20. Course of Research in Economics.

Image Source: Portrait of Vervon Orval Watts in the Harvard Class Album, 1932.

Categories
Exam Questions Harvard Theory Uncategorized

Harvard. Graduate Economic Theory Exam. April 1963

Edward Chamberlin was a member of the graduate examination committee of the Harvard economics department in the early 1960s and in his files I have found copies of the theory exams from 1961, 1962, and 1963 along with a few memos that  circulated among members of the committee that together provide a description of the procedures used for grading.

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

_________________________________

Other Written Exams
in Economic Theory

April 11, 1961
November 13, 1962

_________________________________

HARVARD UNIVERSITY
Department of Economics

Written Economic Theory Examination
April 8, 1963

You are to answer a total of 6 questions.

All three questions in Part A.
One question each in Parts B, C, and D.

Use a separate book for each question.

PART A: Answer all THREE

  1. Explain the phenomena of “external economies” and “external diseconomies.” Describe how they affect the efficiency of the competitive pricing mechanism, and discuss measures which have been proposed to improve welfare when external economies or diseconomies are present.
  2. State and explain several leading principles from the field of “non-price competition.” Comment on the problems that arise in combining this type of theory with the more orthodox “price competition.”
  3. Interpret the Marshallian concept of Consumers’ Surplus in terms of a theory of utility based solely on Indifference Lines.

PART B: Answer ONE of the two.

  1. Contrast the “liquidity preference” and the “loanable-funds” theories of interest. Discuss the implications of these two theories for monetary policies intended to maintain full employment.
  2. Discuss the purely theoretical proposition that if all prices everywhere were sufficiently responsive in both directions to supply and demand there would, in a free market economy, be no persistent unemployment. Be equally interested in pointing out what may be right and what may be wrong about the statement. State what assumptions you would want explicitly stated if you had to support the proposition.

PART C: Answer ONE of the two.

  1. Compare the main ideas of Adam Smith and David Ricardo about economic growth — its mechanism and its consequences.
  2. Formulate a simple, highly aggregated model of economic growth. Incorporate technological change in it by including an industry called Research with a production function of a specified shape. Its inputs are capital (stock) and labor (flow). It is up to you to give a definition of its output that is appropriate to your model.

PART D: Answer ONE of the two.

  1. Explain and compare some of the conclusions that economists have reached about the interest rate in a static or stationary state.
  2. Discuss the similarities and differences among the principles of economic choice that are applicable to the three following:
    1. an individual consumer;
    2. a trade union, producers’ cartel, or other interest group;
    3. society as a whole.

You may keep this question sheet when you hand in your exam books.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling
Raymond Vernon

6 Divinity Avenue
Cambridge 38
Massachusetts

April 23, 1963

From: T. C. Schelling
To: Messrs. Chamberlin, Leontief, Vanek

I enclose a sheet with the names and grades for your information.

The outcome of our regrading was as follows. You will recall that there were five students for whom we were rereading one or more books. You will also recall that we were to count the third reading as equal in weight to the other two. The results were:

Book 3, down from 1.4 to 1.2, Fail
Book 5, down from 1.4 to 1.1, Fail
Book 6, up from 1.5 to 1.6, Fair
Book 7, up from 1.25 to 1.4, Fair –
Book 10, down from 1.5 to 1.0, Fail

To recapitulate, three of these failed, and we had five clean failures, making a total of eight failures. On the rereading, three Fair minuses went down to Fail, one Fail went up to Fair -, one Fair – went up to Fair. I think this is about what we could have expected, and I am glad we did the rereading. Incidentally, two of the three who failed after the rereading had three books reread with two different readers involved, so I think we can feel they got fair treatment.

Next week I shall circulate to you my thoughts about a report to the Department and, if you wish, we can get together or alternatively you can add your comments. If it is convenient I should prefer to get together, but not until I have given you at least my thoughts on what we should report.

TCS: ac

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling
Raymond Vernon

6 Divinity Avenue
Cambridge 38
Massachusetts

June 4, 1963

From: T. C. Schelling
To: Messrs. Chamberlin, Leontief, Vanek
Subject:  Report to the Department on the Graduate Theory Examination

We promised the Department a report. And we had some things we wanted to report.

Some of our experiences we can communicate to next year’s committee over the lunch  table. Some really require the Department’s cognizance. I am listing below some of the points I think we should like to report. This is not a draft, but just a chance to check with you. If you agree, disagree, or want to add anything, I suggest you do so in writing with copies to each other. There is no great hurry, but next year’s committee will want some Departmental instruction by the time of the second Department meeting next fall. I would like to get this done before my memory fades, and submit it if possible to the Department as soon as everybody is back from the summer.

  1. I would propose that individual questions be graded not Excellent, Good, Fair, and Fail, but either numerically on the base one-hundred or with letter grades A, B, C, with the committee to decide — subject to any advice the Department wishes to make explicit — what kind of average or combination of grades should qualify a person as a “pass.” The Department should either make clear that the committee may do as it pleases or express itself on such things as how many failures on individual questions make a failing exam in spite of the average. The Department might also express itself on how large or how small the failing fraction might be without being considered “abnormal.” Just to get a proposal in the works, I would propose that questions be graded A, B, C, and Fail, with a B- required for passing, but with the committee empowered to make individual exceptions in either direction on the basis of the whole exam, and that the committee expect to fail somewhere from one-tenth to one-fourth without considering a “policy issue” being involved.
  2. I would strongly recommend that we experiment next fall with typewritten examinations. This raises a number of technical questions, ranging from who provides the typewriter to how noisy the room is, and it surely discriminates somewhat according to typing skill. The present scheme also discriminates according to longhand skill. Students who cannot type, or choose not to type, should have their examinations transcribed, either at their own expense or at the Department’s expense. This seems to me the one exam that, because it is for graduates and because it interferes with no individual’s course, lends itself to the experiment. I feel quite sure that the reading of examinations will be much more reliable if the material is typed, and that disputed grades could be discussed more readily if the exams can be easily and quickly read. The number of students taking the exam in the fall is usually small, and that is therefore a good time to try it out.
  3. I am surely persuaded that anonymous examination books make a real difference and the difference is a good one. I think the committee should avoid as far as possible putting students in special categories like the few who this year were offered the option of presenting to the oral exam with a re-examination in theory. At the same time, the committee cannot avoid having an opinion (or opinions) about the success of its own examinations; and the committee may, as I think we did, have some doubts after the examination about its reliability. If these are strong doubts, they should, as we did, consider special treatment of a few individual cases.
  4. Especially if we go in for typed exams, the Department should consider making this a six-hour exam rather than a three-hour exam, just to increase its reliability. Reading time, I believe, would be sufficiently cut by having a typed examination to make the six-hour exam feasible for the committee.
  5. The questions are also up to the committee but I would pass along the advice that the questions be as concrete and as problem-oriented as possible in contrast to general essay or discussions of what economists have said, proposed, etc. I think I say this not out of a priori prejudice but because I have felt more confident of the grade I gave when the student was responding to a very direct question or problem with little scope for inadvertent or deliberate evasion and with the obligation to give his own answer and not to repeat [what]others have [said]. This kind of advice surely is not suitable for Departmental action, but, if we share some experience we might try to articulate it for the next committee.

TCS: ac

_________________________________

Schelling’s Memo to Dunlop
and the Exam Committee

TO: CHAIRMAN [John Dunlop], DEPARTMENT OF ECONOMICS

FROM: THOMAS C. SCHELLING, CHAIRMAN

DEPARTMENTAL COMMITTEE ON THE GRADUATE THEORY EXAMINATION

RE: WRITTEN THEORY EXAMINATION

DATE: SEPTEMBER 18, 1963

Last year’s committee, consisting of Chamberlin, Leontief, Vanek, and me, reached several conclusions we would like to report for the benefit of the new committee that follows us. Most of the observations we want to pass along arose out of our dissatisfaction, not our contentment, with the examination process. We would like this report to go to the whole Department, or the Executive Committee, or whatever part of the Department is appropriate; if you want to postpone this a month while your new committee decides what it would like to do, if anything, about these recommendations, that is agreeable to us.

  1. Our grading scheme, which we accepted without much thought, was to grade each question excellent, good, fair, or fail, with plus and minus, then to convert these to a numerical scale to facilitate averaging, and then to grade the whole examination. This procedure led to an anomaly that in turn produced some real misunderstanding among the graders. The anomaly was that, after collecting all of the books together and looking at the distribution of grades, the committee might wish to fail people whose average grade was “fair” or to give an “excellent” to a man whose average grade was “good.” This can lead to disputed interpretations of what the grades meant as well as what the grading standards should be. I doubt whether any committee would want, either in principle or in practice, to rely on a straight forward averaging to determine good, fair, fail, etc. I strongly recommend — and this may sound trivial but it is not — that the initial grading be on some arbitrary numerical scale with the final determination of over-all grades from fair to excellent being determined afterward. My committee agrees with this. I personally do not see that a matter of principle is involved here that ought to go to the Department, but I foresee that some eventual controversy may be forestalled if the Department is apprised of this problem and of the new committee’s intentions.
  2. The committee is bound to have some notion of what proportion of those taking the examination might normally be expected to fail it. Different members of the committee may have very different notions. I believe this is meant to be a hard examination, and that the fraction failing it might be comparable to Written Theory Examination the fraction of students who fail their Generals. It is, I believe, also meant to weed out students who would likely fail their Generals. And it is an examination in which the committee ought to feel that anywhere from one-tenth to one-quarter of the candidates might be failed without the result seeming to be abnormal. It might be helpful if the Department would at least discuss the matter briefly so the committee would have a pretty good idea how much leeway it had in grading. It is not quite enough to say that this is completely within the committee’s competence; the philosophy of the examination derives somewhat from the Department’s notion of how strict this examination ought to be and how great a variation in outcomes needs to be expected.
  3. We recommend that the committee experiment in the fall term with typewritten examinations. There are some practical questions here, such as who provides the typewriter, how noisy the room will be, and so forth. Typewritten exams will discriminate according to typing skill; but the present exam discriminates according to long-hand skill. Students who cannot type, or who choose not to type, should have their examinations transcribed, either at their expense or at the Department’s expense. Because this exam is for graduates, and because it interferes with no individual course, it lends itself to experiment; in particular, the small group in the fall term presents an opportunity on a small scale. All of us on the committee believe that the grading will be more reliable if the material is typed, and that disputed grades can be discussed better, and reread more easily, if they are typed. We, therefore, strongly urge that the experiment be made this year.
  4. We are quite persuaded that anonymous examination books (books from which student names have been removed) make a real difference and that the difference is a good one. In case of borderline grades, it is hard to resist the temptation, after the exam has been graded, to get out the student’s record and see whether or not he deserves the benefit of the doubt. We did this, and we believed it was right to do so, but maybe as a matter of principle it should not be done. Let me point out that an awful lot hinges on a single examination if one does not fall back on the student’s theory record in borderline cases. In the oral examination I think it is fair to say that the student’s course background does count in the examiner’s evaluation of him. If the Department really does not want the written theory exam to be anything but an anonymous exam graded solely on its merits, a flat rule would relieve the committee of a philosophical problem that can be quite a nuisance. If the Department wishes the committee to use its own judgment, it will probably help the committee to have it understood in advance that the committee may decide this one. We recommend that the committee be free to use the additional information after the books have once been graded but that the committee avoid this expedient if possible.
  5. If the typed examination is adopted, there is much to be said for making this a six-hour examination to increase its reliability. Reading time will be cut by the typing enough to compensate the greater number of books read.
  6. Our final recommendation involves something that cannot be legislated. It is that the questions be as concrete and as problem-oriented as possible, in contrast to general essays or discussions of what economists have written about a subject. Our impression was that grading was much more reliable on the more direct questions and problems. There was both deliberate and inadvertent evasion on the more general questions, as well as more ambiguity on the committee itself as to what the question called for. The common occurrence of a bluebook that was a decent essay on a question that wasn’t asked might be averted by using questions that are fairly direct and unambiguous. Another common occurrence was the bluebook that indiscriminately gave the positions of various writers without the student’s accepting responsibility for his own analysis or evaluation. Our feeling was that these rather indirect questions provided quite unreliable evidence on which to grade students.

_________________________________

Chamberlin’s Memo
to the Exam Committee

This letter was “in the works” when Tom’s report to John Dunlop of September 18, 1963, came in the mail. It is now sent as a supplement to Tom’s report.

FROM: E. H. CHAMBERLIN
TO: MESSERS. SCHELLING, LEONTIEF, VANEK

SUBJECT: REPORT TO THE DEPARTMENT ON THE GRADUATE THEORY EXAMINATION (letter from Tom Schelling, June 4)

                  First I should admit that I was against the written theory examination when it was first proposed, but without any question the experience this year has made me more opposed than ever. In my letter to the other members of this committee on April twenty-fourth (?), I urged that the attempt to shake some more failures out of the group of eight between the figures of 1.2 and 1.5 had been a “fiasco” and that we should simply allow all of them (i.e., everyone excepting [name deleted], [name deleted], and [name deleted]) to take the orals, with the decision whether to pass or fail to be made at that time. As a compromise, we finally settled on three students: [name deleted], [name deleted], and [name deleted], and offered them the opportunity of taking the oral examination, in which  they might do well enough to pass, even though they had “failed” theory. (The fact that no one of them accepted was certainly not surprising, since they had all been told already that they had failed theory and therefore had two strikes against them if they risked the orals.)

Although we all concurred in the decisions, I feel that I was mainly responsible for the matter coming up at all. As certainly evident in my letter of April twenty-fourth, I was extremely critical of the attempt to fail people who had already been graded at or near the good- to fair+ line merely because we “needed” more failures. In this respect especially I think the policy worked badly this year. The whole matter is probably one for the Executive Committee, rather than for this one. I hope it is understood that from many years of examining in economic theory I have the matter very much at heart. Certainly the treatment of our graduate students at the end of the second year is of the first importance, and I think the Executive Committee should devote some time to reconsidering the whole problem.

I still hope that this group may issue a unanimous report to the Department although as will be seen from the following comments there are son important differences between Tom and me. Perhaps we ought to have a meeting. Comments:

  1. Questions of grading.
    1. The approach of failing a certain percentage of those who take the exam (“one-tenth” to “one fourth”) must absolutely be dropped. It is contrary to the practice , both of this Department and of Harvard University, for as far back as I can remember. One only needs to recall the recent principle that “all (undergraduate) students are potential honors candidates” and to consider the grading processes with respect to these latter, to realise how far astray the concept of “failing or passing a certain percentage” is from the general practice at Harvard, and, in the past, in this Department. In any event, it is clearly unjustifiable with a group as small as we normally expect in the written theory examination — this year 37, of whom we failed, by a great effort, 8, or more than 20 per cent. I think it was the obsession that 3 was not enough failures and that we ought to increase the number, that led to a compounding of arbitrary decisions at the “margin”, and to results which, as I think I demonstrated in my earlier letter, made passing or failure for the group of 8 to which it was applied, almost a matter of pure chance. It was a witch’s brew if there ever was one. However, it was described in some detail in my earlier letter, and I refrain from another lengthy demonstration here.

Only one example from later developments: there were three books at the same grade of 1.25, (a Fair+ by the first reading). Two of them, having no questions eligible for re-reading by our rules, were below the new line of 1.4, and left as “failures”; a third, however, qualified for having two questions re-read (the intervals of discrepancy being 4 and 5 in the two cases), was converted into a pass and finished with a “Good” in the Generals. Why should he have had the opportunity to take Generals while two at the same grade had to wait six months? The conclusions: 1. I think we should admit that the methods we used to make distinctions within this “marginal” group were at fault (to put it mildly) and were future committees against them. 2. We should revert to an “absolute”, not a “relative”” or percentage, standard of quality for passing, and for the several grades of Excellent, Good and Fair, rather than trying to fail a particular number or percentage of people. 3. We should recommend to the Executive Committee that they reconsider whether we really want to “raise standards” in the Economic Theory part of the General examination as much as we appear to have done.

As for the second point, my own conviction is that only those conspicuously deficient in Theory should be failed. It should be not only possible, but a goal of the Department that all who take the examination should be well enough prepared to pass. After all, this only means that the Admissions Committee has done its work well, that the student has been well-advised as to courses, and that he has not outrageously neglected his work. Realistically, of course, there will usually be a few failures, either in the Theory exam or in the Generals. But in my opinion, failures should be voted by the Executive Committee upon recommendation of the Committee on the examination. In all cases of recommended failures, the members of this latter committee should each read the entire book with full knowledge of the identity of the persons involved and decide upon the fate of the student only in consultation, (as at present after the general oral examination).

    1. As for grading terminology, this year it was Excellent, Good, Fair, and Fail, as we all know, and when numerical values were given to these categories later, the space between then was assumed to be equal: 6, 3, 0 (=Fair!) and -3. Tom has made another proposal in his letter (of June fourth). The important thing, it seems to me, is to put more space between Fair, which has always been a passing grade, and Failure. Indeed, one could easily explain the fact that 23 out of 37 books, approximately two-thirds, received a good- (2) in the first reading by the fact that 2 is mid-point between 6 and -3! Although these (good-) books were later broken down and distributed between the levels of “good” and “fair-”, this merely disguises the fact that the grades given actually had very little difference between them. In fact, with the exception of only four books, 33 of the 37 lay between the limits of 2.8 and 1.2, the former .2 below the good average, and the latter .2 above the fair+ average. Clearly the method of grading used this year, in spite of later adjustments, did a poor job of revealing the differences which must exist among the candidates who took the examination.

However, using the same figures, I experimented with breaking up the concentration at good- by introducing mechanically several considerations which ought to enter in anyway. Since this was actually done (out of the sheer fascination of the problem) I attach copies of the result for what they may be worth, perhaps only in suggesting the other ways in which the objective might be achieved. The 6, 3, 0, were kept for Excellent, Good, and Fair, but Fail became -9 (i.e., -6 more in every case of a -3). A more normal scale would evidently be: six questions with a value of 15 each; highest possible total grade a 90. Each question graded 15 = Excellent, 12 = Good, 9 = Fair, 0 a total failure. Also +3 whenever two different readers agreedthat an answer was a Good or better, and -3 whenever two readers both gave 0 (=Fair) or less. These several devices spread out the grades, [name deleted] actually got his Excellent, [name deleted] and [name deleted] showed up as clear failures instead of getting fairs, with [name deleted] such a low Fair that he might easily be added in, the number of Good’s was reduced to 15, etc., etc. (The applause is accepted). No re-readings, either.

To return to Tom’s letter:

  1. I do not think it is fair to require students to type-write their examinations or pay to have it done (I think it is optional now). But they should be warned to write legibly and told that if they do not, they will have to pay to have their written examinations transcribed.
  2. I agree that anonymous examination books are desirable up to a point. But no one should ever be failed without knowing the candidate’s identity and all we can about him.
  3. A three hour examination seems to me long enough, or four at the very most. We should not forget that each student has already been examined for three hours per semester in his courses.
  4. I think the questions should be of all kinds. Just as I refuse assent to the proposition that the scope of Economic theory should be limited to what can be treated in mathematical symbols, as I should not want an examination in theory to be cast in one particular mold.

_________________________________

Leontief Letter to Schelling

September 23, 1963

TO: T. C. Schelling

FROM: W. Leontief.

cc: B. H. Chamberlin, J. Vanek

I heartily approve of all recommendations contained in your memorandum on Written Theory Examinations dated September 18th.

The typing of all examinations — which, incidentally, I proposed at the very beginning before we started them — might not be easy to arrange since the secretaries in the Department offices have no less difficulty in reading the handwritten bluebooks than we do.

A six-hour examination might be rather hard on the students unless it is made quite clear that the additional two hours are allotted for preparing a clear typescript or readable long-hand.

WL: kd

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Written Theory Committee, 1963-64”.

Categories
Exam Questions Harvard Theory

Harvard. Graduate Economic Theory Exam. November 1962

Edward Chamberlin was a member of the graduate examination committee of the Harvard economics department in the early 1960s and in his files I have found copies of the theory exams from 1961, 1962, and 1963 along with a few memos that  circulated among members of the committee that together provide a description of the procedures used for grading.

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

_________________________________

Other Written Exams
in Economic Theory

April 11, 1961
April 8, 1963

_________________________________

HARVARD UNIVERSITY
Department of Economics

Written Exam in Economic Theory
November 13, 1962

ANSWER ANY 7 (AND ONLY 7)
AMONG THE FOLLOWING QUESTIONS.

Questions are all of equal weight.

Use a separate book for each question.

(Please write legibly. Please write, on your first exam book, a phone number or address where you can be reached quickly in the event your exam book, because of handwriting, has to be transcribed and the typist cannot decipher some of your writing.)

  1. Compare the views and arguments of Ricardo, the Austrians, and Marshall, on the question of the roles of utility and demand, and of cost of production and supply, in determining the prices of the goods produced in a competitive economy.
  2. Construct a simple (static) general equilibrium model of a closed national economy, and show how it can be used to explain employment, prices, wage rates and the distribution of national income between capital and labor.
  3. Indifference surfaces of an individual’s ordinal utility function are defined by

U = x1/3 y1/3 z1/3

where U is utility and x, y, and z express quantities of three different products consumed. The individual himself produces 1 unit of x, 2 units of y, and 3 units of z.

    1. Derive the equilibrium levels of consumption of the three products as a function of relative prices;
    2. Derive the demand (supply) curves for the three products, and show as an application the quantities of x, y, and z demanded or supplied in the case where all money prices are equal;
    3. Derive the relative prices that would have to prevail in a competitive market to keep the individual at autarky.
  2. Compare and evaluate critically the solutions of duopoly proposed by at least 3 of the following: Cournot, Bertrand, Stackelberg, and Fellner.
  3. Keynes maintained that an economy could be in equilibrium with a substantial amount of involuntary unemployment, but many other economists feel that an equilibrium in which an important market is not cleared is a contradiction in terms. Explain the concept of macro-economic equilibrium and in the light of this explanation sketch Keynes’ justification of his position and the Pigou-Patinkin refutation of it.
  4. Present the argument according to which indirect taxes reduce the efficiency of the economic system, while a direct income tax does not, and show how the validity of this argument is affected by the existence of consumers’ choice between work and leisure.
  5. Write on “increasing returns” with respect to (a) the firm; (b) the industry; and (c) the whole economy. In each case you should discuss at least: explanations of the phenomenon, how it affects the efficiency of the competitive pricing mechanism, and the question of stability or instability of equilibrium.
  6. Point out and discuss what seem to you the most important similarities and difference between (a) Marx’s, and Schumpeter’s, theories of economic development under capitalism.
  7. Discuss the problem of excess capacity in firms or in groups of firms. What different meanings may the phrase have? To what extent and way would you expect to find excess capacity in (a) static equilibrium; (b) a fluctuating economy; (c) a growing economy.
  8. “Comparative advantage” is typically elaborated in the context of international or interregional trade. Generalize the concept as an economic principle and discuss the reasons you think account for its conspicuous association with international economics.
  9. Discuss the theoretical significance of the distinction between net and gross investment in models of economic growth incorporating technological change.

You may keep this question sheet when you hand in your exam books.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

November 19, 1962

From: T. C. Schelling

To: Messrs. E. H. Chamberlin, W. W. Leontief, and J. Vanek

Subject: Written Examination in Economic Theory

Seven students took the exam, and we have a total of forty-two questions, each in a separate book. I had managed to allot the questions so that each of us grades either ten or eleven books. I am asking Chamberlin to grade questions 1 and 9, Leontief 2, 7, and 11, Vanek questions 3, 4, 8, and 10, Schelling questions 5 and 6. Wassily and I get eleven a-piece, Ed and Jaroslav get ten a-piece.

If you are interested in what the students chose, it is follows:

Question     1 — 6 7 — 5
2 — 4 8 — 5
3 — 1 9 — 4
4 — 4 10 — 1
5 — 5 11 — 2
6 — 6

Enclosed, for each of you, are the books you should grade.

Each book will have a second reader. I will redistribute them as they come back. Some may need a third reader.

As we agreed, let’s grade them “excellent,” “good,” “fair,” and “fail,” with plus and minus as appropriate, and for averaging we will treat the intervals between grades as numerically equivalent. For borderlines between pass and fail, if any, we can reconsider the scaling system.

The immediate urgency is only in letting students know whether they are still preparing for orals. When I asked, none were scheduled for before Christmas. But I would like to finish the grading by the middle of next week if we can. If you can read your books before Thanksgiving, so I can redistribute them next Monday, it would help.

[After a] quick check I did not notice any with an impossible handwriting, [and] if you wish you may ask Joyce to get your books transcribed. That will slow us down, but I believe it is worthwhile. If you lose any books, we all hang together.

P.S. I suggest you not write your grade on the book. Each of us is then free to do a second reading unconstrained. Instead, turn in a sheet for each question with a grade corresponding to each student number; the number in red pencil is the code for the individual student. Please return your books and grade sheets to Joyce.

TCS: ac

Enc.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

December 7, 1962

From: T. C. Schelling

To: Messrs. Chamberlin, Leontief, and Vanek

Subject: Theory Exam Grades

I have communicated to the Departmental office that all six who took the exam have passed. Wassily and I agreed on the phone that we should add to the dosier of the two poorest ones our scepticism that they are qualified for a Ph.D, and urging the oral examining committee to take very seriously the unsatisfactory quality of their theory exam. I shall set up a meeting this week at which we can settle on the grades for these students and work out language to meet Wassily’s point.

In preparing some statistics for you I discovered some minor errors in my tabulation; these raised the lowest grades by about one point in total, or 1/14th of a point for the grade average.

Attached is a tabulation that gives the two grades by student, by question, and by grader — the capital letters are the initials of the four graders.

I will call you to set up a meeting. At that time we can also discuss what we want to report to the Department, if anything.

The names of the students, with their scores, are as follows:

Book Student Score
6  [name deleted] 30.0
3  [name deleted] 23.3
5  [name deleted] 22.0
1  [name deleted] 18.0
2  [name deleted] 16.3
4  [name deleted] 14.3

TCS:ac

Theory Exam Grades*

Question Student
1 2 3 4 5 6
1 C 2- 1 2- 1 2+ 2
V 2+ 2 2+ 2- 3- 2+
2 S 2- 2- 2+
L 0 0 0+
3 V 2+
L 0+
4 C 2 1 2 3
V 2 2+ 3- 3-
5 S 2- 1 3 2 1
V 2- 1+ 3- 2 3-
6 S 0+ 0 2- 1 1 2-
L 1- 0 2 0 1- 3
7 C 2 1 2- 1- 0+
L 2 1 1 0 1
8 S 2- 1 1- 2- 3
V 2- 2- 2- 2 3-
9 C 1 1+ 1+ 1+
L 1 1 1 2
10 S 0-
V 1-
11 V 1+ 2-
L 1 1
Total points** 18.0 16.3 23.3 14.3 22.0 30.0
Average 1.28 1.17 1.66 1.02 1.57 2.15
No. of excellents** 0 0 2 0 2 6
No. of fails** 2 2 1 3 2 1

*Scoring: Excellent = 3, Good = 2, Fair = 1, Fail = 0, with 1/3 point for (+) and (-).

**For fourteen grades, two on each question.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Written Theory Committee, 1963-64”.

Categories
Exam Questions Harvard Theory

Harvard. Graduate Economic Theory Exam. April 1961

Edward Chamberlin was a member of the graduate examination committee of the Harvard economics department in the early 1960s and in his files I have found copies of the theory exams from 1961, 1962, and 1963 along with a few memos that  circulated among members of the committee that together provide a description of the procedures used for grading.

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

_________________________________

Other Written Exams
in Economic Theory

November 13, 1962
April 8, 1963

_________________________________

HARVARD UNIVERSITY
Department of Economics

Written Exam in Economic Theory
April 11, 1961

Answer six questions. All questions count equally. Please write legibly.

I

Set out Ricardo’s formal model of economic growth, so far as he has a complete system. Compare Ricardo’s diagnosis and prognosis with those of Adam Smith and Marx.

II

Discuss the rationale and limitations of measures of national income as indicators of social welfare.

III

Answer one of the following

Explain the concept of a “shadow price” in linear programming. Compare it with the role of the price concept in marginal analysis.

or

Give examples of “corner solutions”

    1. in the analysis of production
    2. in the analysis of consumers’ demand
    3. in the analysis of exchange

and show in what respect they differ from the corresponding marginal solutions.

IV

Answer one of the following

What were the basic theoretical issues between Keynes and non-Keynesians at the time the General Theory was published? To what extent has a synthesis since been achieved?

or

Discuss the effect of changes in the general level of money wages on the level of real wages.

V

“In contrast to the propositions of positive economic theory, the propositions of welfare economics cannot be subject to empirical verification. Hance the latter discipline can hardly be useful.” Discuss this observation using specific examples.

VI

The homogeneous Cobb-Douglas production function is usually defined for two factors of production. Construct a Cobb-Douglas function for three factors and for one factor and show that their basic formal properties are analogous to those of a two-factor function.

_________________________________

Note: the following list of ten undated and unattributed questions was found in Chamberlin’s papers immediately following the above examination. 

PROPOSED WRITTEN GRADUATE THEORY EXAM

Answer six questions; all questions have equal weight.

  1. Describe and discuss Ricardo’s theory of economic growth; and discuss its relevance to problems now confronting ‘underdeveloped’ countries, or economies.
  2. What are the chief differences in the conclusion reached by analysing an area of the economy (say, an “industry”) under the assumptions of (a) pure competition, on the one hand, and (b) monopolistic competition on the other. Elaborate the explanation of one of the differences mentioned.
  3. To what extent may the concept of economic rent be generalized beyond its original application to land? Discuss fully, making clear what you mean by “rent” in each case.
  4. Identify and illustrate the main kinds of uncertainty that arise in economic decisions; and relate the different kinds of “decisions”. Can problems of choice involving uncertainty be analysed in terms of ordinal utility?
  5. Give an economic appraisal of the effects of comparative resource allocation in the case of “indivisibility”.
  6. Set up an example of a simple static general equilibrium system with three goods and two factors of production, for example, land and labor.
  7. How can technological change cause unemployment? What market forces tend to eliminate the unemployment? What factors may impede the operation of those forces?
  8. What is the theoretical justification of the “competitive ideal”? How is the validity of the argument that competition produces ideal results affected by recognition of the phenomenon of product differentiation?
  9. Describe the Neumann Model, and the principal results concerning it. Discuss the relevance of these results to real economies.
  10. Outline and criticize the theory of economic growth, of one of the following authors:

Solow, Joan Robinson, Kaldor, Tobin.

_________________________________

Excerpt from the minutes of the Department of Economics meeting held on Tuesday, May 16, 1961

Copies of the Written Theory Examination were distributed. Professor Chamberlin had three comments to make on the examination:

  1. There is not sufficient choice
  2. The questions are overly specific
  3. There were no questions on Economics 201 yet 35 of the students take this course as one half of their preparation for economic theory.

He concluded that the examination results must be capricious.

Professor Smithies defended the examinations by saying that the questions were varied from one examination to another and you had to look at all examinations in order to generalize, and the results of the examination showed a close correspondence with those of course grades.

There were some things suggested as a result of the discussion. The whole Department should be asked to submit questions. There were, a number of people who felt that there should be a number of specific questions. Professor Duesenberry suggested that the student should have a better idea of what the coverage would be. It was also decided that the grading of these examinations should be on the same basis as the General Oral Examinations rather than A, B, or C.

Professor Duesenberry suggested that there should be a theory syllabus including topics which are not covered in courses but which are nevertheless important and the topics should be divided into optional subjects and required subjects with the understanding that students would be examined on required subjects and on some optional fields.

Professor Dunlop contemplated no action tonight and that this should be referred to a committee.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Theory, 1952-1962”.

Categories
Exam Questions Harvard

Harvard. Exams for principles of accounting. W. M. Cole, 1907-1908

William Morse Cole, his life, career, and publications. The essence of Cole’s accounting course is to be found in his textbook:

Accounts. Their Construction and Interpretation for Business Men and Students of Affairs. Boston: Houghton Mifflin Company, 1908.

“The first issue of this book was brought out at a time when no general, non-technical, non-professional treatise on accounting had been published . The author had then been giving for eight years a course of instruction to seniors in Harvard College on the principles of accounting, and believed that many business men and students of affairs would be interested to see briefly but comprehensively how accounts are constructed and interpreted.”
Revised and enlarged edition, 1915.

__________________________

Earlier Accounting Exams

1901-02
1902-03
1903-04
1904-05
1905-06
1906-07

________________________

Course Announcement
1907-08

*[Economics] 18. Principles of Accounting. Mon., Wed., and (at the pleasure of the instructor) Fri., at 3.30. Mr. W. M. Cole

Course 18 is not open to students before their last year of undergraduate work. It may be taken as a half-course in the first half-year.
[“A star (*) prefixed to the number of a course indicates that the course cannot be taken without the previous consent of the instructor.” Introductory note.]

Source: Harvard University. Announcement of the Courses of Instruction offered by the Faculty of Arts and Sciences 1907-08, 2nd ed., p. 50.

________________________

Course Enrollment
1907-08

Economics 18. Mr. W. M. Cole. — Principles of Accounting.

Total 83: 10 Graduates, 41 Seniors, 22 Juniors, 6 Sophomores, 4 Others.

Source: Harvard University. Report of the President of Harvard College, 1907-1908, p. 67.

________________________

ECONOMICS 18
Mid-year Examination, 1907-08

  1. Give suppositional details to illustrate the meaning of the following journal entries:
Adam Bede
To Stationery
Accounts Payable
To Bills Payable
Bills Receivable
To Machinery
Surplus
To Capital Stock
Loss and Gain
To Bills Receivable
  1. “Real Estate is a capital account, and Rent is a revenue account.” How far is this statement true? If it is correct, what does it mean? If it is incorrect or inadequate, compare these two accounts in respect to both the use and the ultimate treatment of them.
  2. Illustrate roughly any book of original entry constructed in such form that the maximum number of entries may be made so as to require only the minimum number of postings. Show ten entries with an indication of three postings to cover them.
  3. Fill out the following incomplete six-column statement, using no figures not given or implied.
Dr. Cr. Resources. Liabilities. Loss. Gain.
Cash 20,000
Office furniture 3,000 500
Expense 13,000 13,000
Interest 500 50
Bills Receivable 5,000
Bills Payable 2,000
Accounts Receivable 3,000
Accounts Payable 1,000
Merchandise 20,000 21,000
Capital Stock

Show the balance sheet for the new year, supposing no dividends to be declared.

  1. Arrange the following items in what seems to you the best form of income sheet: commission paid, 12,000; depreciation, 1,500; dividends, 20,000: rent paid, 1000; surplus for the year, 12,500; wages paid, 110,000; miscellaneous expenses, 8,000; material consumed, 85,000; sales of merchandise manufacture, 250,000. It is assumed that no goods are bought.
  2. Show the Loss and Gain account on the ledger for the corporation whose income-sheet figures are given above (problem 5).
  3. A summary of the transactions of a corporation for one year is as follows: net income, now in the form of cash, 34,000; dividends declared but not yet paid, 25,000; bills payable converted into capital stock, 20,000; real estate bought for cash, 15,000; notes received in payment of outstanding ledger accounts, 7,000; all other transactions have exactly offset each other, so that except for those mentioned above the status is exactly as it was a year ago. The balance sheet at the beginning of the old year was as follows:
Real estate 70,000 Capital stock 197,000
Machinery 86,000 Bills payable 25,000
Bills receivable 24,000 Accounts payable 12,000
Accounts receivable 20,000 Surplus 21,000
Merchandise 31,000
Cash 24,000

Show the balance sheet for the beginning of the year.

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 8, Bound Volume: Examination Papers, Mid-Years 1907-08.

________________________

ECONOMICS 18
Year-end Examination, 1907-08

I.
Take all.
  1. Distinguish between
    1. Trial Balance and Balance Sheet,
    2. Balance Sheet and Income Sheet,
    3. Income Sheet and Profit & Loss account.
  2. You are receiver for an insolvent. You find accounts reported on the books as below. The bookkeeping is known to register correctly the amount of receipts and expenditures, and to do this in the accounts apparently concerned. Which of the accounts indicated below would need investigation beneath the surface, and in the case of each what investigation should be conducted to determine the facts?
    Loans on commercial paper; bonds owned; real estate; accounts payable; debts due from branches; capital stock; merchandise in branch stores; collateral held to secure loans made.
  3. Compare the purpose and nature of reserve or reserve funds in the following kinds of enterprise: fire insurance; manufacturing; banking; life insurance.
    Name and describe any other kinds of reserve that occur to you.
  4. The following items appear, among others, in one report of a corporation. Interpret each, and show the relation of each to the others if such relation exists.
Assets Liabilities
Sinking Funds bonds 250,000 Collateral Trust bonds 1,500,000
Discount on bonds 75,000 Sinking Fund 225,000
Bonds of subsidiary companies deposited as collateral 2,000,000 Replacement Fund 100,000
Surplus 500,000

 

Net earnings 200,000
Other income 100,000
300,000
Fixed charges 80,000
Discount on bonds 10,000 90,000 210,000
Dividends 150,000
Surplus 60,000
  1. Which of the following facts would you recommend to show, and where and how would you show them, in the report of a corporation?

Receipts from operations,
Expense of operations (not including improvements),
Fuel consumed,
Improvements charged to maintenance,
Improvements charged to capital,
Reserve from profits, set aside for future improvements,
Selling costs,
Guaranteed bonds of subsidiary companies,
Interest on capital stock,
Advances to cover deficits of failing subsidiary companies.

II.
Take three.
  1. Explain in municipal accounting (a) the common lack of correspondence between different sets of official figures for apparently the same expenditures, and (b) the danger in comparing costs between different cities.
  2. Compare the adequacy of a bank balance sheet, as a means of judging solvency, with that of a balance sheet of a mercantile concern.
    Why does a bank balance sheet distinguish between different kinds of cash?
  3. What is the ultimate purpose of cost accounting?
    With that purpose in view, defend or oppose the keeping of an account for idle machine time. If you defend it, show how the account should be kept.
  4. Does a 5% bond bought at 125 pay 4%? Prove the truth of your answer by indicating the correct entries to interest account when interest is received. (Do not take time to compute definite figures, but illustrate by rough figures or symbols, indicating what they stand for.)
  5. When cost figures in manufacturing are based in part on estimates for the distribution of burden, what method is available for revising and correcting such estimates? Illustrate by applying the method to a specific account or group of accounts.

Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1908-09 (HUC 7000.25), pp. 42-44.

Image Source: William Morse Cole faculty portrait in Radcliffe College, Book of the Class of 1913-14. Colorised at Economics in the Rear-view Mirror.

Categories
Econometrics Harvard Suggested Reading Syllabus

Harvard. Course Outline and Reading List for Quantitative Research on the Behavior of the Firm. John R. Meyer, 1955-56

Having a fresh Ph.D. in hand and starting his first year at the rank of assistant professor of economics at Harvard in the Fall term of 1955-56, John R. Meyer offered a graduate course in applied econometrics based largely on his Ph.D. thesis work. A course description, outline, and reading list for “Quantitative Research on the Behavior of the Firm” are transcribed below. 

Information on Meyer’s brillian future career can be found at the following links:

Edward L. Glaeser’s tribute to John R. Meyer.

Obituary from the Boston Globe.

_______________________

Harvard Ph.D. in Economics, 1955

John Robert Meyer, A. B. (Univ. of Washington) 1960.

Special Field, Statistical Method and its Application. Thesis, “Business Motivation and the Investment Decision: an Econometric Study of Postwar Investment Patterns in the Manufacturing Sector.”

Source: Harvard University. Report of the President of Harvard College, 1965-1955, p. 285.

_______________________

Course Announcement

Economics 222. Quantitative Research on the Behavior of the Firm
Half-course (fall term). M., W., F., at 9. Assistant Professor J. R. Meyer.

Use of statistical inference and other quantitative methods (e.g. interviews and questionnaires) in determining business motivation and behavior as this relates to-dividend, investment, pricing, financial, and similar policy decisions of the firm. The relevance to public policy and the possibilities for further research.
Prerequisite: Economics 221a and 221b or 221c.

Source: Courses of Instruction Offered by the Faculty of Arts and Sciences, 1955-56. Official Register of Harvard University Vol. LII, No. 20 (August 31, 1955), p. 92

_______________________

Course Enrollment

[Economics] Quantitative Research on the Behavior of the Firm. Assistant Professor J. R. Meyer. Half course.

(Fall) 7 Graduates.

Source: Harvard University. Report of the President of Harvard College, 1955-56, p. 79.

_______________________

Course Outline

Fall Term, 1955-56

HARVARD UNIVERSITY
Department of Economics
Economics 222

Quantitative Studies
on the Behavior of the Business Firm

Sept. 26. Introduction.

Sept. 28, 30. A Survey of the Problems involved in Statistical Measurement of Cost and Production Functions.

Oct. 3. Interdependence, Multicollinearity, and a General Introduction to the Problems and Concepts of Multivariate Analysis.

Oct. 5. Principle Component Analysis.

Oct. 7. Principle Components as an Alternative to Confluence Analysis in Detecting Multicollinearity (using the Cobb Douglas Production Function as an Illustrative Case).

Oct. 14. Railroad Cost Analyses as an Illustrative Example of Statistical Measurement of Costs: I, The Historical Origins and Importance of the Problem.

Oct. 17. Railroad Cost Analyses as an Illustrative Example of Statistical Measurement of Costs: II, A Critique of Present Procedures in Railroad Cost Analysis.

Oct. 19. Railroad Cost Analyses as an Illustrative Example of Statistical Measurement of Costs: III, A Presentation and Comparison of Empirical Cost Functions for Railroading obtained by Alternative Procedures.

Oct. 21. Discussion.

Oct. 24. Plant and Equipment Investment: The Three Basic Theoretical Models.

Oct. 26, 28. Plant and Equipment Investment: The Existing Empirical Evidence.

Oct. 31. The Statistical Analysis of Cross-Section Data: I, the “Size Problem.”

Nov. 2, 4. The Statistical Analysis of Cross-Section Data: II, Identification and Questions of Causation in Regression and Correlation Analysis.

Nov. 7. Discussion.

Nov. 9. The Combined Use of Cross-Section and Time Series Estimates in an Investment Study: An Illustrative Example.

Nov. 14, 16. A Suggested Application of Factor or Principle Component Analysis to an Empirical Investigation of Investment Motivation.

Nov. 18. Discussion.

Nov. 21. The Accuracy of Survey Estimates of Investment Outlay.

Nov. 23. A Critique of Present Investment Surveys from the Standpoint of Statistical Sampling Technique.

Nov. 25. Discussion.

Nov. 28. The Financial Policy of Corporations: I, The Institutional Pattern of Conservation.

Nov. 30. The Financial Policy of Corporations: II, The Effect of Taxes.

Dec. 2. The Determination of Dividend Levels.

Dec. 5. Discriminator Analysis and a Possible Application in the Study of Dividend Behavior.

Dec. 7, 9 The Inter-relationships between Financial Policy and Investment Outlays.

Dec. 12. Discussion.

Dec. 14. The Holding of Business Inventories: The Present State of Empirical Knowledge.

Dec. 16. Some Possible Relationships between Liquidity, Trade Credit, and Inventory Levels.

Dec. 19. Horizontal Integration in Manufacturing and the Holding of Wholesale and Retail Inventories.

Dec. 22. Summary and Discussion.

______________________

Reading List
Economics 222
Fall, 1955

I. Cost and Production Functions
A. Required

G.H. Borts, “Production Relations in the Railway Industry,” Econometrica, January 1952, pp. 71-79.

J. Dean, “Department Store Cost Functions,” Studies in Mathematical Economics and Econometrics, U. of Chicago Press, 1942, pp. 222-254.

P.H. Douglas, “Are There laws of Production?,” American Economics Review, March 1948, pp. 1-41.

Interstate Commerce Commission Bureau of Accts., Cost Finding and Valuation, Explanation of Rail Cost Finding Procedures and Principles Relating to the Use of Costs, Washington, D.C., November 1954, pp. 27-87.

H. Mendershausen, “On the Significance of Professor Douglas’ Production Function,” Econometrica, April 1938, pp. 143-153.

Caheb Smith, “The Cost-Output Relation for the U.S, Steel Corporation,” Review of Economics and Statistics, November 1942, pp. 166-176.

T.O, Yntema, An Analysis of Steel Prices, Volume and Costs Controlling Limitations on Price Reductions, U.S. Steel TNEC Papers, (Pamphlet No. 6) pp. 231-302.

B. Recommended

J.M. Clark, Studies in the Economics of Overhead Costs, U. of Chicago Press, Chicago, 1923, pp. 258-317.

Committee on Price Determination for the Conference on Price Research, Cost Behavior and Price Policy, NBER, New York, 1943, pp. 80-115, 291-301, 219-263, 321-329.

J. Dean, Statistical Cost Functions of a Hosiery Mill, Studies in Business Administration, U. of Chicago Press, Chicago, 1941.

J. Dean, Statistical Determination of Costs with Special Reference to Marginal Costs, U. of Chicago Business Studies, Vol. VII, #1.

J. Dean, The Relation of Cost to Output for a Leather Belt Shop, NBER Tech Paper 2, New York, 1941.

D. Durand, “Some Thoughts on Marginal Productivity, with Special Reference to Professor Douglas’ Analysis,” Journal of Political Economy, December 1937, pp. 740-758.

F.K. Edwards, “Application of Market Pricing Factors in the Division of Traffic According to Principles of Economy und Fitness,” American Economic Review, May 1955, pp. 621-632.

M. Ezekiel and K.H, Wylie, “Cost Functions for the Steel Industry,” Journal of the American Statistical Association, March 1941, pp. 91-108.

J. Mosak, “Some Theoretical Implications of the Statistical Analysis of Demand and Cost Functions for Steel,” Journal of the American Statistical Association, March 1941.

W.H. Nicholls, Labor Productivity Functions in Meat Packing, U. of Chicago Pres, Chicago 1948.

H. Starkle, “The Measurement of Statistical Cost Functions: An Appraisal of Some Recent Contributions,” American Economic Review, June 1942.

II. Plant and Equipment Investment
A. Required

P.N.S. Andrews and J.E. Meade, “Summary of Replies to Questions on the Effects of Interest Rates,” Oxford Economic Papers, 1938, pp. 25-28.

P.N.S. Andrews, “A Further Inquiry into the Effects of Rates of Interest,” Oxford Economic Papers, No. 3, February 1940, p. 3 ff.

H. Chenery, “Overcapacity and the Acceleration Principle,” Econometrica, January 1952, pp. 1-28.

J.M. Clark, “Business Acceleration and the Law of Demand; A Technical Factor In Economic Cycles,” Journal of Political Economy, March 1917, pр. 217-235. — also in Readings in Business Cycle Theory.

I. Friend and J. Bronfenbrenner, “Business Investment Programs and Their Realization,” Survey of Current Business, December 1950, pр. 11-22.

W. Heller, “The Anatomy of Investment Decisions,” Harvard Business Review, March 1951.

L. Klein, “Studies in Investment Behavior,” Conference on Business Cycles, NBER, New York 1951, pp. 23-303.

S. Kuznets, “Relation Between Capital Goods and Finished Products in the Business Cycle,” Economic Essays in Honour of Wesley Clair Mitchell, New York, 1935, pp. 248-267.

R. Mack, The Flow of Business Funds and Consumer Purchasing Power, New York 1941, Chapter VIII, pp., 237-305.

J. Meyer and E. Kuh, “The Accelerator and Related Theories of Investment,” Review of Economics and Statistics, August 1955.

J. Tinbergen, “Statistical Evidence on the Acceleration Principle,” Economica, 1938; and Statistical Testing of Business Cycle Theories, League of Nations, Geneva 1938, Vol. I, Chaps. 3 and 5, and Vol. II, Chap. 2.

B. Recommended

J.S. Bain, “The Relation of Economic Life of Equipment to Reinvestment Cycles,” Review of Economics and Statistics, May 1939.

D.H. Brill, “Financing of Capital Formation,” Paper presented at NBER Conference on Research in Income and Wealth of October, 1953.

J. Ebersole, “The Influence of Interest Rates Upon Entrepreneurial Decisions in Business — A Case Study,” Harvard Business Review, Autumn, 1938.

J. Einarsen, Reinvestment Cycles und Their Manifestation in the Norwegian Shipping Industry, Oslo, 1938.

M. Ezekiel, “Statistical Determination of Savings, Consumption and Investment,” American Economic Review, March 1942, pp. 22-50 and June 1942, pp. 272-308.

G.H. Fisher, “A Survey of the Theory of Induced Investment, 1900-1940,” Southern Economic Journal, April 1952, pp. 474-494.

M. Gort, “The Planning of Investment: A Study of Capital Budgeting in the Electric Power Industry,” Journal of Business of the University of Chicago, 1951.

H.D, Henderson, “The Significance of the Rate of Interest,” Oxford Economic Papers, October 1938, pp. 1-13.

Factors Affecting Volume and Stability of Private Investment, Materials on the Investment Problem Assembled by the Staff of the Subcommittee on Investment, Joint Committee on the Economic Report, Washington, 1949.

L. Klein, Economic Fluctuations in the United States, 1921-1941, New York, 1950.

L. Klein, “Pitfalls in the Statistical Determination of the Investment Schedule,” Econometrica, July-October 1943, pp. 246-258 and “The Statistical Determination of the Investment Schedule; A Reply,” Econometrica, January 1944, pp. 91,92.

A.D. Knox, “The Acceleration Principle in the Theory of Investment; A Survey,” Economica, August 1952, pp. 269-297.

W. Leontief, “A Comment on Klein’s Studies in Investment Behavior,” Conference on Business Cycles, 1951, pр. 310-313.

T.C. Liu and C.G. Chang, “U.S, Consumption and Investment Propensities,” American Economic Review, September 1950, pp. 565-582.

C.D. Long, Building Cycles and the Theory of Investment, Princeton, 1940.

A.S. Manne, “Some Notes on the Acceleration Principle,” Review of Economics and Statistics, 1945.

J. Meyer and E. Kuh, “On the Interpretation of Regression and Correlation Coefficients When the Data Are Ratios,” Econometrica, October, 1955.

Roos, “The Demand for Investment Goods,” American Economic Review Supplement, May 1948, pp. 311-320.

G. Terbourgh, A Dynamic Equipment Policy, New York, 1949.

Tinbergen, “Critical Remarks on Some Business Cycle Theories,” Econometrica,1942, p. 139.

III. Corporation Finance, Dividends, and Savings Policies
A. Required

L. Bridge, “The Financing of Investment by New Firms,” Conference on Research in Business Finance, New York 1952, pp. 65-74.

N.S. Buchanan, “Theory and Practice in Dividend Distribution,” Quarterly Journal of Economics, November 1938.

J.K. Butters and J. Lintner, Effect of Federal Taxes on Growing Enterprises, Boston, 1945, pp. 1-134.

G.H. Evans, “Comment on Historical Series on Sources and Uses,” Conference on Research in Business Finance, New York 1952, pp. 28-34.

N.H. Jacoby and R.J. Saulnier, Term Lending to Business, New York, NBER, 1942, pp. 1-8.

A.R. Koch, The Financing of Large Corporations, 1920-1939, NBER, New York, 1943, pp. 1-8, 91-109.

J. Lintner, “The Determinants of Corporate Savings,” Savings in the Modern Economy (A Symposium), U. of Minnesota Press, Minneapolis, 1953, pp. 230-255.

F.A. Lutz, Corporate Cash Balances, 1914-43, NBER, New York, 1945, pp. 1-8, 17-29.

C.L. Merwin, Financing Small Corporations in Five Manufacturing Industries, 1926-1936, NBER, New York, 1942, pp. 1-6, 57-89.

D.T. Smith, Effects of Taxation; Corporate Financial Policy, Boston, 1952, pp. 1-140.

B. Recommended

E.C. Brown, Effects of Taxation: Depreciation Adjustments for Price Changes, Boston, 1952, pp. 1-18.

A. Cowles and Associates, Common Stock Indexes, Bloomington, 1939, pp. 43-44.

O.J. Curry, Utilization of Coporate Profits in Prosperity and Depression, Ann Arbor, U. of Michigan Business Studies, 1941

C.O. Hardy and Jacob Viner, Report on the Availability of Bank Credit in the Seventh Federal Reserve District, Washington, Government Printing Office, 1935.

L.H. Kimmel, The Availability of Bank Credit, 1933-1938, New York, NICB, 1939.

A.R. Koch and C.H. Schmidt, “Financial Position of Manufacturing and Trade in Relation to Size and Profitability, 1946,” Federal Reserve Bulletin, September, 1947, pp. 1091-1102.

L.F. McHugh, “Financing Small Business in the Postwar Period,” Survey of Current Business, November 1951, pp. 17-24.

L.F. McHugh and L.G. Rosenberg, “Financial Experience of Large and und Medium Size Manufacturing Firms, 1927-51,” Survey of Current Business, November 1952, pp. 7-13.

D.C. Miller, “Corporate Taxation and Methods of Corporate Financing,” American Economic Review, December, 1952, pp. 839-854.

J.L. Nicholson, “The Fallacy of Easy Money for the Small Business,” Harvard Business Review, Autumn, 1938, pp. 31-34.

R.S. Sayres, “Business Men and the Terms of Borrowing,” Oxford Economic Papers, February, 1940, pp. 21-31.

Securities and Exchange Commission, Sales Record of Unseasoned Registered Securities, 1933-39, Washington, The Commission, June 1941, p. 10.

Securities and Exchange Commission, Cost of Flotation of Registered Securities, 1938-39, Washington, The Commission, 1941.

IV. Inventory Investment
A. Required

M. Abramovitz, Inventories and Business Cycles, NBER, New York, 1950.

R.P. Mack, “The Process of Capital Formation in Inventories and the Vertical Propagation of Business Cycles,” Review of Economics and Statistics, August, 1953.

T.M. Whitin, The Theory of Inventory Management, Princeton, 1953, pp. 3-161.

B. Recommended

M. Abramovitz, “Influence of Inventory Investment on Business Cycles,” Conference on Business Cycles, NBER, New York, 1951, pp. 319-324.

M. Abramovitz, The Role of Inventories in Business Cycles, NBER, Occasional Paper No. 26, New York, 1948.

R.H. Blodgett, Cyclical Fluctuations in Commodity Stocks, U. of Pennsylvania Press, Philadelphia, 1935.

J. Tinbergen, “An Accelerator Principle for Commodity Stockholding and a Short Cycle Resulting from It,” Studies in Mathematical Economics and Econometrics, U. of Chicago Press, 1942, pp. 255-267.

Source: Harvard University. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 6, Folder “Economics, 1955-1956 (2 of 2)”.

Image Source: Portrait John R. Meyer, 1958 Fellow of the John Simon Guggenheim Memorial Foundation.

Categories
Econometrics Exam Questions Harvard Suggested Reading Syllabus

Harvard. Introduction to Econometrics, Syllabus and Final Exam. Sims, 1967-68

Christopher A. Sims, portrait from his senior year

 

Christopher Sims was awarded a Ph.D. in economics from Harvard in February 1968 and in the Spring term of 1967-68 he still taught at the rank of “Instructor in Economics” (Note: he was promoted to assistant professor of economics beginning with the Fall term of 1968-69). We see from the official course announcement for the 1967-68 academic year that the staffing of the undergraduate introduction to econometrics course had not been determined until some time after the printing of the course announcements. 

An earlier post provides the course syllabus and partial reading list for Sims’ graduate course on time series econometrics.

_______________________________

Course Announcement

Economics 195. Introduction to Econometrics.

Half course (spring term). Tu., Th., S., at 11. Dr. ——

Statistics applied to testing of economic hypotheses and estimation of economic parameters. Will center on multiple regression and analysis of variance techniques and their application to tests on time series and cross-section data and to estimation of simultaneous equation models.

Prerequisite: Statistics 123 [Statistics in the Social Sciences] or equivalent.

Source: Harvard University, Faculty of Arts and Sciences. Courses of Instruction, Harvard and Radcliffe, 1967-1968. Pp. 127-128.

_______________________________

Course Outline and Reading List

Dr. Sims
Spring 1968

Economics 195
Reading List and Outline

Alternative texts

Carl F. Christ, Econometric Models and Methods, Wiley, 1967
or
J. Johnston, Econometric Methods, McGraw-Hill, 1963

Other references not required for purchase:

Arthur S. Goldberger, Econometric Theory, Wiley, 1964

E. Malinvaud, Statistical Methods of Econometrics, Rand-McNally, 1966

Other required purchases:

National Income and Product of the U.S., 1929-65, U.S. G.P.O.

Economic Report of the President, 1968, U.S. G.P.O. (This may not be available until a few weeks after the semester begins.)

Some source of statistical tables — the F, t, normal and chi-squared distributions — will be necessary. Christ includes such tables. If you buy Johnston instead and you own no other source of tables, adequate sources are:

Tables for Statisticians, Barnes and Noble, or

Standard Mathematical Tables, Chemical Rubber Publishing Co.

Course Outline

Unstarred readings are passages which should parallel part of what is covered in class.

(*) Readings which are required and which may not be covered in class.
(**) optional readings.

  1. Least squares in econometrics.
    1. Abstract models which justify LS.
    2. How such Models arise in economics: structural models and conditional forecasts.

Johnston, p. 13-29, 106-112

Goldberger, p. 156-165, 179-80, 266-74, 278-80, 288-304.

Christ, Ch. VIII, IX.1-4, IV.4-6

  1. Tests of linear hypotheses in regression models

Johnston, p. 112-138

Goldberger, p. 172-180

Christ, p. 495-514

  1. Constructing models: Principles, gimmicks, and pitfalls.
    1. Models in general: Data transformations; altering specifications in the light of results.
    2. Time series forecasting models: Multicollinearity; distributed lags; lagged endogenous variables.

Christ, Ch. V

Johnston, p. 201-207, p. 212-221

Goldberger, p. 192-4

(*) Christ, p. 579-606

(*) Friend, Irwin and Robert C. Jones, “Short-Run Forecasting Models” in Models of Income Determination.

(*) Orcutt, G.H., and S.F. James, “Testing the Significance of Correlations between Time Series”, Biometrika 12/48

(**) National Bureau of Economic Research, The Quality and Significance of Economic Anticipations Data, 1960.

(**) National Bureau of Economic Research, Short Term Economic Forecasting (Studies in Income and Wealth, v. 27)

(**) National Bureau of Economic Research, Models of Income Determination (Studies in Income and Wealth, v. 28)

  1. Refinements of multiple regression
    1. Nonspherical disturbances and generalized least squares.

Christ, IX.5, IX.13

Goldberger, p. 201-212, 231-243

Johnston, Ch. 7

Zellner, A. “An Efficient Method for Estimating Seemingly Unrelated Regressions”, J. Amer. Stat. Assoc., 6/62

(**) Balestra, P. and M. Nerlove, “Pooling Cross-Section and Time Series Data in the Estimation of a Dynamic Model”, Econometrica, 7/66

    1. Errors in variables and instrumental variable estimation.

Goldberger, p. 282-287

    1. Dummy variables and analysis of variance

Goldberger, p. 218-231

Johnston, p.221-228

    1. Distributed lag estimation

Johnston, Ch.8.3

Goldberger, p. 274-8

Almon, S. “The Distributed Lag between Capital Appropriations and Expenditures”, Econometrica, 1/65

(**) Mundlak, Y., “Aggregation over Time in Distributed Leg Models”, Int. Econ. Rev. 5/61

(**) Jorgenson, D., “Rational Distributed Lag Functions”, Econometrica, 1/66

  1. Testing Revisited
    1. Serial correlation; the Durbin-Watson Statistic

Johnston, Ch.7.4

Christ, Ch.X.4

Goldberger, p. 243-244

Nerlove, M., and Wallis, K., “Use of the Durbin-Watson Statistic in inappropriate situations”, Econometrica, 1/66

    1. Tests of structural stability and forecast accuracy

Johnston, Ch.4.4

Christ, Ch. X.6, 7, 9

Goldberger, p. 169-70, 210-11

(**) Theil, H., Applied Economic Forecasting.

(**) Sims, C. “Evaluating Short-term Macro-economic Forecasts: The Dutch Experience”, Rev. Econ. and Stat. 5/67

  1. Estimation and testing in simultaneous equations models
    (Reading assignments for this section will be made when it is reached in class).
  1. Possible Additional. Topics
    (Readings for topics in this section will be assigned when and if they are reached in class.)

    1. Bayesian regression
    2. Nonlinear regression
    3. Principal components and discriminant analysis
    4. Spectral analysis

Source: Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 9. Folder “Economics, 1967-68”.

_______________________________

Final Examination
Economics 195

Spring 1968
Dr. C. Sims

Do all questions on the exam. Do not spend more than the suggested amount of time on any one question, unless you have time left over at the end. Most questions include at least some quite difficult parts, so you need not finish every question to get a good grade. Formulas and a table appear on the last page.

  1. (Time: 25 minutes)
    1. Define the terms “consistent estimator” and “unbiased estimator”.
    2. We wish to estimate a scalar parameter β, and we have available four estimators, bi(n), 1=1, … 4, where n is sample size.
      Suppose we know that these estimators have the forms

b1(n) = β + (1 + ν) / n

b2(n) = β + 2 ν /n

b3(n) = β + ν /200

b4(n) = β (1 + (ν / n)),

where ν ∼ N(0,1). For each of the four estimators, tell whether it is consistent or inconsistent, biased or unbiased.

    1. Among the three estimators b1(n), b2(n) and b3(n), which is the minimum variance unbiased estimator for a sample of size 10? Would your answer change if b4(n) were included in the comparison?
  1. (Time: 40 minutes)
    We are interested in measuring the relationship between I.Q. and income using the relationship:

yi(t) = α + β xi(t) + νi(t)

where yi(t) is the income and xi(t) the I.Q. of the i’th individual at time t. The variable νi(t) is an unobserved random term assumed to satisfy E [νi(t) | xi(t)] = 0.

    1. Suppose we have observations on yi(t0) and xi(t0) for a large cross-section of individuals at a single time (t=t0). What additional assumptions are necessary to guarantee that least squares regression of y on x in this sample will yield unbiased estimates of α and β? Comment briefly on the reasonableness of these assumptions in this context.
    2. Suppose we have observations on y0(t) and x0(t) for a single individual (i=0) for a large number of time periods. What additional assumptions are necessary to guarantee that least squares regression of y on x in this sample will yield unbiased estimates of α and β? Comment briefly on the reasonableness of these assumptions in this context.
    3. For a given sample size, which would you expect to yield more reliable estimates for this model — a cross-section as in part (a) or a time series on an individual as in part (b)? Why?
    4. Give sufficient conditions for the regression in part (b) to yield consistent estimates of α and β. Comment briefly on the reasonableness of these assumptions in this context.
  1. (Time: 35 minutes)

Economist A believes an individual’s savings in a given year depend only on his mean income over the current year and the preceding year, i.e.,

\bar{y}_{i} =\left( 1/2 \right) \left( y_{i}+y_{i}\left( -1 \right) \right).

Economist B believes savings depend only on the change in income between the current and the preceding year, i.e.,

\Delta y_{i}=y_{i}-y_{i}\left( -1 \right) .

They take a sample of 20 randomly selected individuals and regress savings (si) on current and lagged income
(yi and yi (-1)) with no constant term to obtain

1)      si = .08 yi – .02 yi(-1) + residual

as an estimated equation. Their computer printout contains in addition the following information:

\sum y_{i}^{2}=5;     \sum y_{i}\left( -1 \right)^{2} =5;     \sum y_{i}y_{i}\left( -1 \right) =4;

\sum s_{i}y_{i}=.32;     \sum s_{i}y_{i}\left( -1 \right) =.22;     \sum s_{i}^{2}=.0374;

\hat{\sigma}^{2} =\ .0009

(\hat{\sigma}^{2} =\ \text{equation residual variance, unbiased estimate).}

Formulate A’s and B’s theories as hypotheses about the coefficients in (1) and compute a test of each theory at the 5% level of significance in a two-tail test. Can either hypothesis be rejected at this significance level? State the assumptions about the distribution of the residuals in the model which are necessary to justify the test you use here.

(See table on last page)

  1. (Time: 40 minutes)
    1. Two of the following cannot be covariance matrices. Which two? (Point out what’s wrong with each of the two). (7 minutes)
      1. \left[ \begin{matrix}4&1\\ 1&2\end{matrix} \right]
      2. \left[ \begin{matrix}4&-1\\ -1&4\end{matrix} \right]
      3. \left[ \begin{matrix}4&1\\ -1&4\end{matrix} \right]
      4. \left[ \begin{matrix}1&-3\\ -3&3\end{matrix} \right]
      5. \left[ \begin{matrix}1&0\\ 0&1\end{matrix} \right]
    1. What is multicollinearity? (7 minutes)
    2. What is a Koyck distributed lag relationship? (7 minutes)
    3. What is an Almon polynomial distributed lag relationship? (7 minutes)
    4. What are some advantages and disadvantages of the Koyck as compared to the Almon distributed lag relationship for purposes of econometric model-building? (12 minutes)
  1. (Time: 45 minutes)

Consider the following model of income and employment determination in New England:

[demand for output] (A) Y = a1 + b1 Yus + c1W + ν1

[demand for labor] (B) E = a2 + b2 Y + ν2

[wage determination] (C) W = a3 + b3 (L – E) + ν3

[labor supply] (D) L = a4 + b4 t + c4 W + d4 E + ν4

where Y is aggregate income in New England

L is labor force (number at work or looking for work in New England)

E is employment (number actually at work in New England)

W is the ratio of New England wages to the national average.

Yus is aggregate U.S. income.

t is the current year.

νi, i = 1, . . ., 4 are random disturbances.

    1. Which variables are most reasonably treated as endogenous, which as exogenous in this model?
    2. Would any of the variables you specify as exogenous possibly be better treated as endogenous in a larger model? Why?
    3. Using the order criterion, which equations in the model are under-identified? over-identified?
    4. Describe briefly in words the simplest way to obtain consistent estimates of equation (A) (under the usual assumptions about distribution of residuals).
    5. Suppose you discovered that the residuals from equation (A) were highly correlated with federal defense expenditures. How would you modify the model? How would this modify your answer to part (c)?
Table and Formulae t-statistic
P[ |t| > x]
Degrees of Freedom .1 .05 .01
2 2.920 4.303 6.965
8 1.860 2.306 2.896
14 1.761 2.145 2.624
15 1.753 2.131 2.602
16 1.746 2.120 2.583
17 1.740 2.110 2.567
18 1.734 2.101 2.552
19 1.729 2.093 2.539
20 1.725 2.086 2.528

Ordinary least squares

\hat{b} =\left( X^{\prime}X \right)^{-1} X^{\prime}Y

V\left( \hat{b} \right) =\sigma^{2} \left( X^{\prime}X \right)^{-1}

\hat{\sigma}^{2} =\left( Y^{\prime}Y-\hat{b}^{\prime} X^{\prime}Y \right) /\left( n-k \right)

t-test on H_{0}:\ c^{\prime}b = M


t=\frac{c^{\prime}b-M}{\sqrt{\hat{\sigma}^{2} \left( X^{\prime}X \right)^{-1}}}

Source: Harvard University, Faculty of Arts and Sciences. Papers Printed for Final Examinations [for] History, History of Religions, Government, Economics, … (June 1968).

Image Source: Christopher A. Sims ’63 in Harvard Class Album 1963. From the Harvard Crimson article “Harvard and the Atomic Bomb,” by Matt B. Hoisch and Luke W. Xu (March 22, 2018). Sims was a member of the Harvard/Radcliffe group “Tocsin” that advocated nuclear disarmament.