Category: M.I.T.

M.I.T. Reading assignments and final exam for Business Cycles. Samuelson, 1948

Post author By Irwin Collier
Post date 2017-11-09

The reading list and final exam questions for Paul Samuelson’s course on business cycles at M.I.T. that he taught during the second term of 1942-43 were posted earlier. In this posting I provide transcriptions for the reading list and final exam for the same course offered five years later. I have included a carbon copy of the first two questions that are different from the first two questions in the mimeographed copy. Maybe the carbon copy was preliminary, perhaps undergraduates and graduates received different questions. In any event the questions are different and clearly identified for the same examination date and same course. Note the tease in his illustration for Question 3 where he lists “in order of importance” “sunspots” and “anti-Keynesian” as Samuelson’s personal main theories.

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Reading Assignment, Economics 26
Spring Term 1948

The student should buy J. M. Keynes, General Theory of Employment, Money and Interest; and if possible, G. Haberler, Prosperity and Depression (3^rd revised edition).
As background reading, the student may wish to consult J. A. Estey or E. Bratt on Business Cycles [James Arthur Estey, Business Cycles, New York: Prentice-Hall, 1941; Elmer Clark Bratt, Business Cycles and Forecasting, 3^rd 1949] and Joan Robinson, Introduction to the Theory of Employment.

Reading Assignments
A

Wesley C. Mitchell, Business Cycles: The Problem and its Setting (1927), Chapters 1, 4.
A. H. Hansen, Fiscal Policy and Business Cycles, Chapters 1, 2
Wm. H. Beveridge, Full Employment in a Free Society, Appendix A.
J. A. Schumpeter, Business Cycles (1939), Chapters 4, 7C, 15G
S. Kuznets, National Income and its Composition, Vol. 1, Chapter 1
G. Haberler, Prosperity and Depression, Chapters 1, 9

Optional:

A. F. Burns and W. C. Mitchell, Measuring Business Cycles.

B

G. Haberler, op cit, Ch. 2, 3, 4, 5, 6, 7
A. H. Hansen, Business Cycle Theory, 1, 2, 4, 8
K. Wicksell, Interest and Prices, Introduction, Ch. 5, 7, 8, 11.

C

J. M. Keynes, General Theory
P. Samuelson, Ch. 13 on Savings and Investment in Economics
A. H. Hansen, Fiscal Policy, 6, 11, 12, 13, 14, 15
G. Haberler, Ch. 8, Part III
S. E. Harris, Postwar Economic Problems, Ch. 2, 5
S. E. Harris, Economic Reconstruction, Ch. 5
Selected Readings on Business Cycles, [Probably: American Economic Association. Gottfried Haberler, chairman of the selection committee. Readings in Business Cycle Theory. Philadelphia: Blakiston, 1944.] Lange, Clark, Tinbergen papers.

D

Financing American Prosperity. [Financing American prosperity : a symposium of economists. Editors: Paul T. Homan and Fritz Machlup. New York : The Twentieth Century Fund, 1945.] Read Ch. 1 and any other two
Federal Reserve Monograph No. 3. First Musgrave Article and Comments.

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Business Cycles
Ec 26 Examination
May 27, 1948
[from mimeographed copy]

20 minutes

What postwar public policies should be followed in connection with business cycles? (If none, justify your answer.)

15 minutes

Define in a paragraph or less:

acceleration principle
Say’s Law
marginal propensity to invest
“foreign trade multiplier”
Juglar cycle

15 minutes

Next to each of the following writers fill in the appropriate letter and number (or numbers if more than one is called for).

Thus the correct answer for Samuelson might be as indicated:

Samuelson A 2 9

if his principal contribution occurred in the last 20 years; and if the theories of the cycle for which he is best known were (in order of importance) “sunspots” and “anti-Keynesian.”

Time of Principal Contribution	Main Theory or Theories
A. Last 20 years	1. monetary
B. Early 20^th century (1900-27)	2. sunspots and weather
C. 19^th century or earlier	3. underconsumption
	4. self-generating, endogenous
	5. exogenous investment fluctuation
	6. Say’s Law of Markets
	7. eclectic (some truth in most theories)
	8. overinvestment
	9. anti-Keynesian

	Time of Principal Contribution	Main Theory or Theories
Cassel	_____	_____; _____
Catchings	_____	_____
Dewey and Dakin	_____	_____
Fisher (I.)	_____	_____
Foster	_____	_____
Haberler	_____	_____
Hawtrey	_____	_____
Hansen	_____	_____; _____
Hobson	_____	_____
Hayek	_____	_____; _____
Jevons	_____	_____
Anderson	_____	_____; _____
Keynes	_____	_____; _____
Pigou	_____	_____
Lauderdale	_____	_____
Mitchell	_____	_____; _____
Mises	_____	_____; _____
Malthus	_____	_____
Spiethoff	_____	_____
Ricardo	_____	_____
Tugan-Baranowsky	_____	_____; _____
Schumpeter	_____	_____

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Business Cycles
Ec 26 Examination
May 27, 1948
[from carbon copy]

20 minutes

In retrospect what public policies seemed called for in the period between the two world wars in connection with “business cycles”?

15 minutes

Define or describe in a paragraph:

natural rate of interest vs. real rate of interest
open market purchase
Kondratieff cycle
marginal efficiency of capital

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Paul A. Samuelson Papers: Box 33, Folder “14.451 Business Cycles, 1943-1955”.

Image Source: From the slideshow at the MIT Memorial Service for Paul A. Samuelson held on April 10, 2010.

Tags Samuelson

Exam Questions M.I.T.

M.I.T. Final exam for business cycles course taught by Paul Samuelson, 1943

Post author By Irwin Collier
Post date 2017-11-08

The following exam questions come from the carbon paper copy in Paul Samuelson’s papers. Transcribed below are the final exam questions for his course on business cycles taught during the second term of the 1942/43 academic year at M.I.T. The reading list for this course was transcribed and posted earlier. The next posting will provide the reading assignments and final examination for his course five years later.

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Business Cycles
Ec 26 Examination
Thursday, May 20, 1943

Answer two or three questions not all from the same section.

I

“The older economists regarded the trade cycle as a fluctuation around an undefined base. Modern economists have for the first time a theory of effective demand to determine that base.” Develop the last sentence, and weigh the accuracy of the whole quotation.
Must savings equal investment? Discuss this problem, giving as little weight as possible to terminological and definitional matters. Go to the heart of the matter, and show how hoarding enters the picture if at all.
What is the optimum amount of money in a system; the optimum marginal efficiency of capital; the optimum marginal propensity to consume? Explain.
How can those who have lost faith in monetary control have so much confidence in the efficacy of fiscal policy?

II

What is the effect on prices and wages of greatly increased effective demand? Illustrate with the policy problems raised during a war.
Weigh the chances for boom and depression in the half decade after the war.
Resolved: Secular stagnation is likely if not inevitable. Prepare a brief for the affirmative and for the negative.
Discuss the problems raised by the public debt.

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Paul A. Samuelson Papers: Box 33, Folder “14.451 Business Cycles, 1943-1955”.

Image Source: From the slideshow at the MIT Memorial Service for Paul A. Samuelson held on April 10, 2010.

Tags Samuelson

M.I.T. Suggested Reading Syllabus

M.I.T. First term core macro. National income and employment. Readings and Exams. Domar, 1965

Post author By Irwin Collier
Post date 2017-11-04

For the previous posting I transcribed Robert Solow’s reading list and mid-term exam for M.I.T.’s second term of graduate core macroeconomics. That course reading list was lean, short & sweet. Today we turn to my Doktorvater, Evsey D. Domar, who taught the first term of that graduate sequence. Both my obligation to friends of Economics in the Rear-view Mirror and my profound doctor-filial piety were needed to motivate me to transcribe Domar’s entire fourteen page course reading list. I am delighted to say I was able to find the midterm and final exams for the year and include them here.

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THEORY OF NATIONAL INCOME AND EMPLOYMENT

E. D. Domar 14.451 Fall Term 1965-66
READING LIST

The purpose of this list is to suggest to the student the sources in which the more important topics of the course are discussed from several points of view. His objectives should be the understanding of these topics and not the memorization of opinions and details.

There now exists a good textbook on macroeconomics—Gardner Ackley, Macroeconomic Theory (The Macmillan Company, New York, 1961). Its knowledge is necessary but not sufficient for passing the course. While several copies are on reserve at Dewey, the acquisition of private copies is recommended.

It is also convenient to acquire the two National Income volumes published by the U.S. Department of Commerce and listed in Section I.

I. NATIONAL INCOME AND RELATED ITEMS
(September 21 – October 14)

REQUIRED

Ackley, Chapters 1-4.
Kuznets, S., National Income and Its Composition, Vol. I (New York, 1941). [handwritten note: Chap. 1]
National Income 1954 Edition, A Supplement to the Survey of Current Business, U.S. Department of Commerce (Washington, D.C., 1954), pp. 27-60, 153-58.
U.S. Income and Output, A Supplement to the Survey of Current Business, U.S. Department of Commerce (Washington, D. C., 1958), pp. 50-105. Browse through the statistical tables of both volumes to know what is available where.
Leontief, W. W., “Output, Employment, Consumption and Investment,” Quarterly Journal of Economics, Vol. 58 (February, 1944), pp. 290-314.
Leontief, Studies in the Structure of the American Economy (New York, 1953), pp. 27-35.
Dorfman, R., “The Nature and Significance of Input-Output,” Review of Economics and Statistics, Vol. 36 (May, 1954), pp. 121-33.
Kendrick, J. W., Productivity Trends in the United States (Princeton, 1961), pp. xxxv-lii, 20-77.
Domar, E. D., “On Total Productivity and All That,” The Journal of Political Economy, Vol. 70 (December, 1962), pp. 597-608. [This is a review of Kendrick’s book; several reprints are available in Dewey.]
Domar, E. D., “On the Measurement of Technological Change,” The Economic Journal, Vol. 71 (December, 1961), pp. 709-29. [Read only pp. 709-14, 726-29.]
Board of Governors of the Federal Reserve System, Industrial Production 1959 Revision (Washington, 1960), pp. iii-41. [Look for the method, not for statistical details.]
Sigel, S. J., “A Comparison of the Structures of Three Social Accounting Systems,” National Bureau of Economic Research, Input-Output Analysis: An Appraisal, The Conference on Research in Income and Wealth, Studies in Income and Wealth, Vol. 18 (Princeton, 1955), pp. 253-89.

ADDITIONAL READINGS:

Jaszi, G., “The Statistical Foundations of the GNP,” Review of Economics and Statistics, Vol. 38 (May, 1956), pp. 205-14.
Domar, E. D., “An Index-Number Tournament,” mult., 1963. [Several copies are available in Dewey; your comments will be appreciated.]
Griliches, Zvi, “Notes on the Measurement of Price and Quality Changes,” and comments by Jaszi, Denison and Grove, in Conference on Research in Income and Wealth, Models of Income Determination (Princeton, 1964), Vol. 28, pp. 381-418.
Lewis, Wilfred, Jr., “The Federal Sector in National Income Models,” and comments by Hickman and Pechman, in Conference on Research in Income and Wealth, Models of Income Determination (Princeton, 1964), Vol. 28, pp. 233-78.
Bailey, M. J., National Income and the Price Level (New York, 1962), pp. 269-300.
Kuznets, S., National Income and Its Composition (New York, 1941).
Ruggles, R. and N., National Income Accounts and Income Analysis (New York, 1956).
Ruggles, “The U.S. National Accounts,” American Economic Review, Vol. 49, (March, 1959), pp. 85-95.
National Bureau of Economic Research, The National Economic Accounts of the United States, Review, Appraisal and Recommendations, General Series 64, (Washington, 1958).
Organization for European Economic Cooperation, A Standardised System of National Accounts, (Paris, 1952).
Gilbert, M. and I. B. Kravis, An International Comparison of National Products and the Purchasing Power of Currencies, A Study of the United States, the United Kingdom, France, Germany and Italy, Organization for European Economic Cooperation (Paris, 1954).
Gilbert, M., Comparative National Products and Price Levels, A Study of Western Europe and the United States, Organization of European Economic Cooperation, (Paris, 1958).
United Nations, Yearbook of National Accounts Statistics, the latest issue.
United Nations, National Income Statistics, the latest issue.
United Nations, World Economic Survey and other Economic Surveys.
Studenski, The Income of Nations. Theory, Measurement, and Analysis: Past and Present (New York, 1958). [A wealth of information, particularly of historical character.]
Nove, A., “The United States National Income A La Russe,” Economica, Vol. 23, 1956.
Bergson, A. The Real National Income of Soviet Russia Since 1928 (Cambridge, Massachusetts, 1961).
Kravis, I. B., “Relative Income Shares in Fact and Theory,” American Economic Review, Vol. 49 (December, 1959), pp. 917-49.
Samuelson, P. A., “Evaluation of Real National Income,” Oxford Economic Papers (New Series), 1950, pp. 1-29.
Samuelson, “The Evaluation of ‘Social Income’: Capital Formation and Wealth,” in F. A. Lutz and D. C. Hague, editors, The Theory of Capital (London, 1961).
Leontief, W. W., The Structure of American Economy (New York, 1941).
Leontief, Studies in the Structure of the American Economy (New York, 1953).
Taskier, C. E., Input-Output Bibliography 1955-1960, United Nations (New York, 1961).
Evans, W. D., and M. Hoffenberg, “The Interindustry Relations Study for 1947,” Review of Economics and Statistics, Vol. 34, (May, 1952), pp. 97-142.
Stewart, I. G., “The Practical Uses of Input-Output Analysis,” Scottish Journal of Political Economy, Vol. 5, (February, 1958).
Dosser, D. and A. T. Peacock, “Input-Output Analysis in an Under-Developed Country: A Case Study,” Review of Economic Studies, Vol. 25 (October, 1957).
Input-Output Analysis: An Appraisal, Studies in Income and Wealth by the Conference on research in Income and Wealth, Vol. 18 (Princeton, 1955).
Solow, R. M. “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics, Vol. 39 (August, 1957), pp. 312-20.
Abramovitz, M., “Resources and Output in the United States Since 1870,” American Economic Review, Papers and Proceedings, Vol. 46 (May, 1956), pp. 5-23, reprinted as National Bureau of Economic Research, Occasional Paper 52 (New York, 1956).
Kendrick, J. W., Productivity Trends in the United States (Princeton, 1961).
Denison, E. F., Sources of Economic Growth in the United States and the Alternatives Before Us (New York, 1962).
Abramovitz, M., “Economic Growth in the United States,” American Economic Review, Vol. 52 (September, 1962), pp. 762-82. [This is a review of Denison’s Book.]
Moorsteen, R. H., “On Measuring Productive Potential and Relative Efficiency,” Quarterly Journal of Economics, Vol. 75 (August, 1961), pp. 451-67.
Fabricant, S., The Output of Manufacturing Industries, 1899-1937 (New York, 1940), particularly Chapter 1.
United Nations, Statistical Office, Index Numbers of Industrial Production, St/Stat/ Ser/ F1 (New York, 1950).
Board of Governors of the Federal Reserve System, Flow of Funds in the United States 1939-53 (Washington, D. C., 1955).
Powelson, J. P., National Income and Flow-Of-Funds Analysis (New York, 1960).
Measuring the Nation’s Wealth, National Bureau of Economic Research, Studies in Income and Wealth, Vol. 29 (Washington, D. C., 1964).

II. GENERAL AGGREGATIVE SYSTEMS
(October 19 – October 28).

REQUIRED:

Ackley, Parts II and III.
Keynes, J. M., The General Theory of Employment, Interest and Money (London and New York, 1936). [Omit the appendixes to Chapters 6 and 19.]
Note: Neither book is arranged in the order of this reading list. Hence these two assignments apply to other sections of it as well.
Wells, P., “Keynes’ Aggregate Supply Function: A Suggested Interpretation,” The Economic Journal, Vol. 70 (September, 1960), pp. 536-42.
Johnson, H. G. and the discussants, “The General Theory After Twenty-five Years,” American Economic Review Papers and Proceedings, Vol. 60 (May, 1961), pp. 1-25.
Klein, L. R., “The Empirical Foundations of Keynesian Economics,” in K. K. Kurihara, ed., Post Keynesian Economics (New Brunswick, N. J., 1954), pp. 277-319.

ADDITIONAL READINGS:

Lekachman, Robert, Keynes’ General Theory: Reports of Three Decades, (New York and London, 1964).
Patinkin, D., Money, Interest, and Prices, Second Edition, (New York, 1965).
American Economic Association, Readings in Business Cycle Theory (Philadelphia, 1944), Essays 5, 7, 8.
American Economic Association, Readings in the Theory of Income Distribution (Philadelphia, 1946), Essay 24.
Metzler, “Three Lags in the Circular Flow of Income,” in Income, Employment and Public Policy, Essays in Honor of Alvin H. Hansen (New York, 1948), pp. 11-32.
Harris, S. E., The New Economics (New York, 1947), Essays 8-19, 31-33, 38-46.
Lerner, A. P., Economics of Control (New York, 1944), Chapters 21-23, 25.K
Kurihara, K. K., Post Keynesian Economics (New Brunswick, N. J., 1954).
Klein, L. R., The Keynesian Revolution, (New York, 1947), Chapters 3-5.
Ellis, H. S., A Survey of Contemporary Economics, Vol. 1, (Philadelphia, 1948), Chapter 2.
Burns, A. F., “Economic Research and the Keynesian Thinking of Our Times,” in his The Frontiers of Economic Knowledge, (Princeton, 1954), or in the Twenty-Sixth Annual Report of the National Bureau of Economic Research, Inc. (New York, 1946). See also the discussion by Hansen and Burns in the Review of Economic Statistics (November, 1947).
Dillard, D., “The Influence of Keynesian Economics on Contemporary Thought,” American Economic Review, Papers and Proceedings, 1957.
Hutt, W. H., Keynesianism: Retrospect and Prospect (Chicago, 1963).
Friedman, Milton, and G. S. Becker, “A Statistical Illusion on Judging Keynesian Models,” Journal of Political Economy, Vol. 55 (February, 1957), pp. 64-75.

III. PRICE FLEXIBILITY AND EMPLOYMENT
(November 2-11)

REQUIRED:

Patinkin, D., Money, Interest, and Prices, Second ed., (New York, 1965), Chapters 9-11.
Pigou, A. C., “The Classical Stationary State,” Economic Journal (December, 1943).
Power, J. H., “Price Expectations, Money Illusion and the Real Balance Effect,” Journal of Political Economy, Vol. 67 (April, 1959).
Mayer, T., “The Empirical Significance of the Real Balance Effect,” Quarterly Journal of Economics, Vol. 73 (May, 1959).

ADDITIONAL READINGS:

Readings in Monetary Theory, Essay 13.
Schelling, T. C., “The Dynamics of Price Flexibility,” American Economic Review (September, 1949).
Lange, O., Price Flexibility and Employment (Bloomington, Indiana, 1944). [Get the main idea and omit the details.]
Friedman, M., “Lange on Price Flexibility and Employment,” American Economic Review (September, 1946).
Patinkin, D., Money, Interest, and Prices (Evanston, Illinois, 1956).
Hicks, J. R., “A Rehabilitation of ‘Classical Economics’,” Economic Journal, Vol. 47, (June, 1957).

IV. THEORY OF INTEREST
(November 16-25)

REQUIRED:

Hicks, J. R., Value and Capital (Oxford, 1957), Chapters 11 & 12.
Lydall, H., “Income, Assets, and the Demand for Money,” Review of Economics and Statistics, Vol. 40 (February, 1958), pp. 1-14.
Gurley, J. G., and E. S. Shaw, “Financial Aspects of Economic Development,” American Economic Review, Vol. 65 (September, 1955), pp. 515-38.

ADDITIONAL READINGS:

Patinkin, the rest of his excellent book.
Gurley, J. G., and E. S. Shaw, Money in a Theory of Finance (Washington, 1960).
Tobin, J., “Liquidity Preference as Behavior Towards Risk,” The Review of Economic Studies, Vol. 25 (February, 1958), pp. 65-86.
Hart, A. G., and P. B. Kenen, Money, Debt and Economic Activity, Third Ed., (Englewood Cliffs, N. J., 1961).
American Economic Association, Readings in the Theory of Income Distribution (Philadelphia, 1946), Essays 22, 23, 26.
American Economic Association, Readings in Monetary Theory, (New York, 1951), Essays 6, 11, 15.
Patinkin, D., “Liquidity Preference and Loanable Funds: Stock and Flow Analysis,” Economica, Vol. 25 (November, 1958).
Lutz, F. A., “The Interest Rate and Investment in a Dynamic Economy,” American Economic Review, (December, 1945).
Wright, A. L., “The Rate of Interest in a Dynamic Model,” Quarterly Journal of Economics, Vol. 72 (August, 1958), pp. 327-50.
Matthews, R. C. O., “Liquidity Preference and the Multiplier,” Economica, Vol. 28 (February, 1961), pp. 37-52.
Supplement to the Review of Economics and Statistics, Vol. 45 (February, 1963) on “The State of Monetary Economics.”
Friedman, M. and A. J. Schwartz, A Monetary History of the United States 1867-1960 (Princeton, N. J., 1963).
Friedman, M., ed., Studies in the Quantity Theory of Money (Chicago, 1956).

V. CONSUMPTION AND SAVING
(November 30- December 9)

REQUIRED:

Crockett, Jean, “Income and Asset Effects on Consumption: Aggregate and Cross Section,” and comments by D. B. Suits, in Conference on Research in Income and Wealth, Models of Income Determination (Princeton, 1964), Vol. 23, pp. 97-136.
Duesenberry, J. S., Income, Saving, and the Theory of Consumer Behavior (Cambridge, Massachusetts, 1949). Omit the details and get the main points.
Friedman, M., A Theory of the Consumption Function (Princeton, 1957), Chapter 9.
Friend, I., and I. B. Kravis, “Entrepreneurial Income, Saving and Investment,” American Economic Review, Vol. 47 (June, 1957), pp. 269-301.
Tobin, J., “On the Predictive Value of Consumer Intentions and Attitudes,” The Review of Economics and Statistics, Vol. 41 (February, 1959), pp. 1-11.
Farrell, M. J., “The New Theories of the Consumption Function,” The Economic Journal, Vol. 69 (December, 1959), pp. 678-96.
Dobrovolsky, S. P., Corporate Income Retention 1915-43 (New York, 1951). [Omit the details.]
Lintner, J. and discussants, “Distribution of Income of Corporations Among Dividends, Retained Earnings, and Taxes,” American Economic Review Papers and Proceedings, Vol. 46 (May, 1956), pp. 97-118.
Gordon, M. J., “The Optimum Dividend Rate,” presented at the 6^th Annual International Meeting of the Institute of Management Sciences (Paris, September, 1959). [On library reserve.]
Domar, E. D., Essays in the Theory of Economic Growth (New York, 1957), pp. 154-67, 195-201.

ADDITIONAL READINGS:

Ferber, R., “The Accuracy of Aggregate Savings Functions in the Post-War Years,” Review of Economics and Statistics, Vol. 37 (May, 1955), pp. 134-48.
Friedman, the rest of his book.
Brown, E. C., Solow, R. M., Ando, A., and J. Karekan, “Lags in Fiscal and Monetary Policy,” in Commission on Money and Credit, Stabilization Policies (Englewood Cliffs, N. J., 1963), pp. 1-165.
Modigliani, F., and R. Brumberg, “Utility Analysis and the Consumption Function: An Interpretation of Cross-Section Data,” in Kurihara, K. K., ed., Post Keynesian Economics (New Brunswick, N. J., 1954), pp. 388-436.
See also its discussion by Brown, B., and F. M. Fisher, “Negro-White Savings Differentials and the Modigliani-Brumberg Hypothesis,” Review of Economics and Statistics, Vol. 40 (February, 1958), pp. 79-81.
Friend, I., and S. Schor, “Who Saves?,” The Review of Economics and Statistics, Vol. 41 (May, 1959), pp. 213-45.
Zellner, Arnold, “The Short-Run Consumption Function,” Econometrica, (October, 1957).
Dennison, E. F., “A Note on Private Saving,” Review of Economics and Statistics, (August, 1958).
Friedman, M., and G. Becker, “A Statistical Illusion in Judging Keynesian Models,” Journal of Political Economy, Vol. 65 (February, 1957).
Klein, L. R., “The Friedman-Becker Illusion,” Journal of Political Economy, Vol. 66 (December, 1958).
Morgan, J. N., Consumer Economics (New York, 1955).
Katona, G., and E. Mueller, Consumer Expectations 1953-56 (Ann Arbor, Michigan, 1956).
Bailey, M. J., “Saving and the Rate of Interest,” Journal of Political Economy, Vol. 45 (August, 1957), pp. 279-305. Reprinted in Landmarks in Political Economy, edited by E. J. Hamilton, A. Rees, and Johnson, H. G., (Chicago, 1962), pp. 583-622.
Klein, L. R., ed., Contributions of Survey Methods to Economics (New York, 1954).
Goldsmith, R. W., A Study of Saving in the United States, Three volumes (Princeton, 1952).
Heller, W. W., Boddy, F. M., and C. L. Nelson, Savings in the Modern Economy, a Symposium (Minneapolis, 1953).
Mincer, J., “Employment and Consumption,” The Review of Economics and Statistics, Vol. 42 (February, 1960), pp. 20-26.

VI. INVESTMENT DECISIONS
(December 14 – January 6)

REQUIRED:

Ackley, Chapter 17.
Solomon, E., ed., The Management of Corporate Capital (Glencoe, Ill., 1959), pp. 48-55, 67-73.
White, W. H., “Interest Inelasticity of Investment Demand—The Case from Business Attitude Surveys Re-examined,” American Economic Review, Vol. 46 (September, 1956), pp. 565-587.
Meyer, J. R., and E. Kuh, The Investment Decision (Cambridge, Massachusetts, 1957), Chapter 12.
Penrose, E., “Limits to the Growth and Size of Firms,” American Economic Review Papers and Proceedings, Vol. 45 (May, 1955), pp. 531-43.
Foss, M. F., and Natrella, V., “Ten Years’ Experience with Business Investment Anticipations,” Survey of Current Business (January, 1957).
Schultz, T. W., “Capital Formation by Education,” The Journal of Political Economy, Vol. 68 (December, 1960), pp. 571-83.

ADDITIONAL READINGS:

Lerner, A. P., “On the Marginal Product of Capital and the Marginal Efficiency of Investment,” Journal of Political Economy, Vol. 51 (February, 1953), pp. 1-14. Reprinted in Landmarks in Political Economy edited by E. J. Hamilton, Rees, A., and H. G. Johnson (Chicago, 1962), pp. 538-58.
Pitchford, J. D. and A. J. Hagger, “A Note on the Marginal Efficiency of Capital,” The Economic Journal, Vol. 48 (September, 1958), pp. 597-600.
Duesenberry, J., Business Cycles and Economic Growth (New York, 1958), Chapters 4-7.
Meyer and Kuh, the rest of the book.
Hirschleifer, J., “On the Theory of Optimal Investment Decision,” The Journal of Political Economy, Vol. 66 (August, 1958), pp. 329-352. [An excellent but difficult paper.]
James, E., A Reconsideration of the Theoretical Criteria for Optimum Investment Planning (M.I.T. doct. diss., 1961). [A good survey of the literature.]
Lovell, M. C., “Determinants of Inventory Investment,” in Conference on Research in Income and Wealth, Models of Income Determination (Princeton, 1964), Vol. 28, pp. 177-232.
Penrose, E. T., The Theory of the Growth of the Firm (Oxford, 1959).
The Quality and Economic Significance of Anticipations Data, A Conference of the Universities—National Bureau Committee for Economic Research (Princeton, 1960).
Foss, M. F., “Investment Plans and Realizations—Reasons for Differences in Individual Cases,” Survey of Current Business (June, 1957).
Foss, M. F., “Manufacturers’ Inventory and Sales Expectations—A Progress Report on a New Survey,” Survey of Current Business (August, 1961).
Robinson, J., The Accumulation of Capital (London, 1956). [Wish we had time for it.]
Lutz, F. A., and V., the Theory of Investment of the Firm (Princeton, 1951).
Heller, W. W., “The Anatomy of Investment Decisions,” Harvard Business Review, (March, 1951), pp. 95-103.
Meade, J. E., and P. W. S. Andrews, “Summary of Replies to Questions on Effects of Interest Rates,” and “Further Inquiry into the Effects of Rates of Interest,” Oxford Economic Papers, No. 1, 1938 and No. 3, 1940.
Ebersole, J. F., “The Influence of Interest Rates,” Harvard Business Review, Vol. 17, 1938, pp. 35-39.
Henderson, H. D., “The Significance of the Rate of Interest,” Oxford Economic Papers (October, 1938), pp. 1-13.
Andrews, P. W. S., “Further Inquiry into the Effects of Rates of Interest,” Oxford Economic Papers, (February, 1940), pp. 32-73.
Sayers, R. S., “Business Men and the Terms of Borrowing,” Oxford Economic Papers (February, 1940), pp. 23-31.
Brockie, M. D., and A. L. Grey, “The Marginal Efficiency of Capital and Investment Programming,” Economic Journal, Vol. 46 (December, 1956).
White, W. H., “The Rate of Interest, the Marginal Efficiency of Capital, and Investment Programming,” Economic Journal, Vol. 48 (March, 1958).
Grey, A. L., and M. D. Brockie, “The Rate of Interest, Marginal Efficiency of Captial and Net Investment Programming: A Rejoinder,” Economic Journal (June, 1959).
Spiro, A., “Empirical Research and the Rate of Interest,” Review of Economics and Statistics, Vol. 40 (February, 1958).
Cunningham, N. J., “Business Investment and the Marginal Cost of Funds,” Metroeconomica, Vol. 10 (August, 1958).
Cunningham, N. J., “Business Investment and the Marginal Cost of Funds,” Part II, Metroeconomica (December, 1958).
Wilson, T., “Cyclical and Autonomous Inducements to Invest,” Oxford Economic Papers, Vol. 5, 1953.
Lydall, H. F., “The Impact of the Credit Squeeze on Small and Medium Sized Manufacturing Firms,” Economic Journal, Vol. 47 (September, 1957).
Friend, I., and J. Bronfenbrenner, “Business Investment Programs and Their Realization,” Survey of Current Business (December, 1950).
Schultz, T. W., “Investment in Human Capital,” American Economic Review, Vol. 60 (March, 1961) pp. 1-17.
Houthakker, H. S., “Education and Income,” The Review of Economics and Statistics, Vol. 41 (February, 1959), pp. 24-28.
Eckhaus, R. S., “On the Comparison of Human Capital,” Center for International Studies, M.I.T., mult.
Becker, G. S., Human Capital: a Theoretical and Empirical Analysis, with Special Reference to Education (New York, 1964).

See also THEORY OF INTEREST and MULTIPLIER AND ACCELERATOR

VII. MULTIPLIER AND ACCELERATOR
(January 11 – 18)

REQUIRED:

Kahn, R. F., “The Relation of Home Investment to Unemployment,” Economic Journal, 1931. Republished in Hansen and Clemence, Readings in Business Cycles and National Income (New York, 1953), Essay 15.
Readings in Business Cycle Theory, Essays 9-12.
Haavelmo, T., “Multiplier Effects of a Balanced Budget,” Econometrica, 1945, reprinted in Readings in Fiscal Policy, pp. 335-343.
Salant, William A., “Taxes, Income Determination, and the Balanced Budget Theorem,” The Review of Economics and Statistics (May, 1957).
Tsiang, S. C., “Accelerator, Theory of the Firm, and the Business Cycle,” Quarterly Journal of Economics, Vol. 65, 1951.

ADDITIONAL READINGS:

Tinbergen, “Statistical Evidence on the Acceleration Principle,” Economica, Vol. 5, 1938.
Eisner, R., “Capital Expenditures, Profits, and the Acceleration Principle,” and comments by G. H. Hickman, in Conference on Research in Income and Wealth, Models of Income Determination, (Princeton, 1964), Vol. 28, pp. 137-176.
Peston, M. H., “Generalizing the Balanced Budget Multiplier,” and “Comment” by W. A. Salant, The Review of Economics and Statistics (August, 1958).
Bowen, W. G., “The Balanced-Budget Multiplier: A Suggestion for a More General Formulation,” The Review of Economics and Statistics, (May, 1957).
Goodwin, R. M., “The Multiplier” in Seymour E. Harris, ed., The New Economics (New York, 1947), pp. 482-99.
Chenery, H. B., “Overcapacity and the Acceleration Principle,” Econometrica, Vol. 20 (January, 1952), pp. 1-28.
Caff, J. T., “A Generalization of the Multiplier-Accelerator Model,” The Economic Journal, Vol. 69 (March, 1961), pp. 36-52.
Kuznets, S., “Relation Between Capital Goods and Finished Products in the Business Cycle,” in Economic Essays in Honor of Wesley Clair Mitchell, (New York, 1935).
Knox, A. D. “The Acceleration Principle and the Theory of Investment: A Survey,” Economica, Vol. 19, 1952.
Harrod, R. F., Towards a Dynamic Economics (London, 1948).
Hicks, J. R., A Contribution to the Theory of the Trade Cycle (Oxford, 1950).
Goodwin, R. M., “Problems of Trend and Cycle,” Yorkshire Bulletin, Vol. 5 (August, 1953).
Ott, A. E., “The Relation Between the Accelerator and the Capital Output Ratio,” Review of Economic Studies, Vol. 25, (June, 1958).
Minsky, H., “Monetary Systems and Accelerator Models,” American Economic Review, Vol. 47, 1957.
Friedman, M. and D. Meiselman, “The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897-1958,” Stabilization Policies, Commission on Money and Credit, (New Jersey, 1963), pp. 165-268.
Hester, D. D., “Keynes and the Quantity Theory: a Comment on the Friedman-Meiselman CMC Paper,” the reply by Friedman and Meiselman, and the rejoinder by Hester, The Review of Economics and Statistics, Vol. XLVI (November, 1964), pp. 364-377.

See also INVESTMENT DECISIONS.
This subject will also be discussed in Economics 14.452.

VIII. MISCELLANEOUS (If time permits)

Ackley, Chapters 16, 20.
Mincer, Jacob, “Investment in Human Capital and Personal Income Distribution,” The Journal of Political Economy, Vol. 66 (August, 1958), pp. 281-302.
Goldsmith, Selma F., “Size Distribution of Personal Income, 1956-59,” Survey of Current Business (April, 1960).
Liebenberg, M., and J. M. Fitzwilliams, “Size Distribution of Personal Income, 1957-60,” Survey of Current Business (May, 1961).

A few other sources may be added from time to time.

Source: Duke University, David M. Rubenstein Library. Economists’ Papers Archives. Papers of Evsey D. Domar, Box 15, Folder “Macroeconomics, Old Reading Lists”.

___________________

MIDTERM EXAMINATION
(One hour and twenty minutes)

THEORY OF INCOME AND EMPLOYMENT
E. D. Domar ….. 14.451 ….. December 9, 1965

Please answer all questions. Use a separate book for each question.

[25%] The economy consists of carrots, rabbits and dogs. Rabbits cultivate and eat carrots, while dogs breed and eat rabbits.
You are asked to compute the national income and product for this economy from the point of view of:

(a) The rabbits
(b) The dogs

Explain your methods carefully and indicate the basic philosophy underlying them. [handwritten note: Too easy]

[25%] “Existing methods of national product computations exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of underdeveloped countries.”
Comment fully and critically. [handwritten note: explain better in class]
[30%] Write a comprehensive essay on the subject of “Keynes and Patinkin on the Relation between the Quantity of Money on the one hand, and Interest Rate, Price Level and National Income on the other.”
[20%] Discuss the treatment of intermediate products in several indexes of industrial productions. Give examples.

Source: Duke University, David M. Rubenstein Library. Economists’ Papers Archives. Papers of Evsey D. Domar, Box 15, Folder “Examinations (1 of 3)”.

___________________

FINAL EXAMINATION
Three Hours

E. D. Domar ….. 14.451 ….. January 26, 1966

Please answer any FIVE questions out of six. Whenever you feel that the questions do not provide sufficient information for you to answer, add the necessary assumptions and state them clearly. Read each question through before answering any part of it.

(a) “The best cure against inflation is a balanced budget.”
(b) “The more each individual or corporation tries to save, the smaller will be the total savings for the economy as a whole.”

Comment on each statement separately.

“The best cure against inflation is increased production.”

Comment fully. Assume that there are unemployed resources to allow for increased production. (Hint: production of what?)
In the light of your answer, do you think a prolonged strike in some industry is inflationary or deflationary? Explain your position.

(a) Explain the several definitions of MONEY used in Price Flexibility and Employment discussions. In each case indicate the specific reasons for that particular definition.
(b) For each definition of money given by you in (a), examine the effects on the stock of money of central bank purchases of (i) government securities, (ii) private securities, (iii) gold from the public.

Comment on your results.

(a) Explain the meaning of PRODUCTIVITY from a private and from a social point of view.
(b) In the light of your explanation given in (a), comment on the productivity of the following persons and on the treatment of their incomes in the national income and product accounts:

(i) A public relations employee of a private corporation

(ii) A public relations employee of the U.S. Department of Defense

(iii) A recipient of interest from the General Electric Company. (You happen to know that he has inherited his bonds from his great uncle who was a great swindler.)

(iv) A recipient of interest on U.S bonds issued in order to finance aid to schools.

(v) A lawyer defending a bookmaker in court

(vi) A nasty professor whose course was a complete waste of time.

Look over your answers and try to generalize (unless you have already said all you want to say in part (a)).

Applying (a) such consumption theories as you know, and (b) your own common sense and empirical knowledge, discuss the effects on consumer spending of the following measures. Assume that the amounts of tax reduction in the first three cases and the amount of dividend in the fourth are all equal in a given year.

(i) A reduction in the Federal income tax (Specify the kind of reduction.)

(ii) A reduction in the Federal capital gains tax

(iii) A reduction in the Federal estate (inheritance) tax

(iv) A declaration of a national dividend (specify the kind) for a given year

(v) A redistribution of income from the rich to the poor

(vi) A redistribution of income from landlords to businessmen (in some underdeveloped country).

Any generalizations?

(a) “Technological progress raises the level of income and employment by making existing assets obsolete and thus shortening their economic life.”

Comment on this statement. Assume that the economy has unemployed resources.

(b) Alvin Hansen used to argue that one reason for the stagnation of the American economy in the nineteen-thirties and for the high level of UNEMPLOYMENT then existing consisted in the slow growth of population at the time.

Do you agree? Comment fully. Should an underemployed economy encourage immigration or emigration, or neither?

Source: Duke University, David M. Rubenstein Library. Economists’ Papers Archives. Papers of Evsey D. Domar, Box 16, Folder “Macroeconomics, Final Exams”.

Image Source: Evsey D. Domar at the MIT Museum.

Tags 14December 9, 1965, Domar

Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Economic Growth and Fluctuations. Readings and Midterm Exam. Solow, 1966

Post author By Irwin Collier
Post date 2017-11-03

The readings for the second term MIT graduate core course in macroeconomics “Economic Growth and Fluctuations” was taught by Robert Solow in 1966. The reading list and midterm questions transcribed for this posting come from his papers at the Duke Economists’ Papers Archive. Solow was indeed listed for this course in the internal report “Department of Economics, Teaching Responsibilities” dated March 4, 1966 in Box 3 of the Department of Economics Papers in the M.I.T. archives.

The first term course that academic year was taught by Evsey D. Domar. His 14-page reading list (!) together with the midterm and final examinations have been transcribed and posted as well.

________________________

Spring 1966

READING LIST 14.452

I. Economic Growth

Stylized Facts

Kendrick and Sato, “Factor Prices, Productivity and Growth”, AER, December 1963.
Bureau of the Census, Long-Term Economic Trends (This is a compendium of data. Spend an hour or two leafing through it.)

Aggregative Models

Hahn and Matthews, “The Theory of Economic Growth: A Survey”, Economic Journal, December 1964, Parts I, II, IV.
Modigliani, “Comment” in Behavior of Income Shares (NBER), pp. 39-50.
Tobin, “Money and Economic Growth”, Econometrica, October 1965.
Marty, “The Neoclassical Theorem”, AER, December 1964.
Diamond, “National Debt in a Neoclassical Growth Model”, AER, December 1965, pp. 1126-1135 only. Rest optional.
Findlay, “The Robinsonian Model…”, Economica, February 1963 and comments by Robinson and Findlay in Economica, November 1963.

Sources of Potential Output

Nelson, “Aggregate Production Functions” AER, September 1964
Denison, Sources of Economic Growth in the U.S. (Don’t read every word, but try to grasp content.)
Abramovitz, “Review of Denison”, AER, September 1962.
Phelps, “The New View of Investment”, QJE, November 1962.
David and van de Kliendert, “Biased Efficiency Growth in the U.S.”, AER, June 1965.

II. Short-Run Macrodynamics

Short-Run Movements in Productivity

Brechling: “The Relationship between Output and Employment…”, Review of Economic Studies, July 1965
Kuh, “Cyclical and Secular Labor Productivity…”, Review of Economics and Statistics, February 1965
Wilson and Eckstein, “Short-Run Productivity Behavior…”, Review of Economics and Statistics, February 1964.

Measuring Potential Output and the Gap

Thurow & Taylor, “The Interaction between Actual and Potential Rates of Growth in the U.S. Economy”, Mimeo.
Kuh, “The Measurement of Potential Output”, mimeo.

Cycles and Fluctuations

Samuelson, “Interaction between Multiplier Analysis and the Principle of Acceleration”, Review of Economics and Statistics, 1939, reprinted in AEA, Readings in Business Cycle Theory.
Metzler, “The Nature and Stability of Inventory Cycles”, Review of Economics and Statistics, 1941.
Kaldor, “A Model of the Trade Cycle”, EJ 1940, reprinted in Hansen and Clemence, Readings in Business Cycles and National Income.
DeLeeuw, “The Demand for Capital Goods by Manufacturers”, Econometrica, July 1962.
Eckstein, “Manufacturing Investment and Business Expectations”, Econometrica, April 1965.
Jorgenson, “Anticipations and Investment Behavior”, Ch. 2 in The Brookings Quarterly Econometric Model of the U.S., (optional).
Darling and Lovell, “Factors Influencing Investment in Inventories”, Ch. 4 in The Brookings Quarterly Econometric Model of the U.S.
Okun, Effects of the Tax Cut of 1964. To appear or else mimeo. [handwritten addition]

Integration of Growth & Effective Demand [handwritten addition, no items listed]

________________________

First Examination 14.452 April 13, 1966

Imagine a one-sector economy, satisfying all the standard simplifying assumptions, in a steady state with constant saving ratio, constant rate of population growth, and no technological change. Now let there be a sudden once-and-for-all shift in technology, with the property that output per man increases by 10% at each and every capital-per-man. There is no change in saving ratio or population growth.
1. What happens along the full-employment path?
2. In the new steady state, has capital per man increased by more or less than 10%? Has output per man increase by more or less than 10%?
3. Describe roughly how the competitively imputed real wage, rate of interest, and relative distribution of income might differ between the new steady-state and the old. (You will not always be able to settle the direction of change.)
In the same sort of economy, suppose that investment demand is such that businesses will quickly snap up all investment opportunities yielding at least some “target rate of return”, like 20%, but none yielding less. Discuss in terms of diagram or otherwise, whether the economy is likely to experience inadequate or excessive aggregate demand near the steady state. What effect would a sudden increase in the rate of population growth have (assuming that the saving ratio was not affected)?
Denison has been described as a pessimist with respect to the possibility of raising the U.S. rate of growth through deliberate policy. Is that a fair description? If so, what are the main sources of his pessimism? What do you gather from Nelson, Abramovitz and Phelps on this subject?

Source: Duke University, David M. Rubenstein Library. Economists’ Papers Archives. Papers of Robert M. Solow, Box 67, Folder “Exams”.

Image Source: Robert M. Solow (undated). MIT Museum .

Tags Solow

Economists M.I.T.

MIT. Three Kindleberger quips à la Solow, 1990

Post author By Irwin Collier
Post date 2017-09-08
2 Comments on MIT. Three Kindleberger quips à la Solow, 1990

In an earlier post we encountered a second-order quote from the Columbia economic historian Vladimir G. Simkhovitch–Frank Fisher quoting Charles Kindleberger quoting Simkhovitch. Today we have some first-order hearsay of Charles Kindleberger from witness Robert M. Solow, his MIT colleague. Kindleberger wit with a Solow twist! In the court of history hearsay evidence is of course admissible after being critically received. On behalf of former, present, and future graduate students of the world, I call the reader’s attention to the second of the three Kindlebergian remarks.

____________________

TRAVELS WITH CHARLIE

That was actually the name of a book that John Steinbeck wrote, all about driving around the country with his dog. The P in CPK does not stand for Poodle. But I like the title, and so will Charlie. I just want to rummage around in my memory.

There should be some permanent record of the time that Charlie and I were part of a panel discussion before an audience. Some question about exchange rates came up, and I spoke my piece. I must have said something wrong, because Charlie broke in to say: “The audience should keep in mind that MIT does not pay Professor Solow to think about international economics.” Bad dog!

Here is another unforgettable shaft. I can not remember the occasion; I think that some of our graduate students were expressing discontent with their lot and suggesting improvements. Charlie summed up the situation by pointing out that fundamentally a graduate student was someone with a boy’s income and a man’s appetite. Of course they felt better immediately. (By the way, the gender-specificness of that remark was just the empirical truth of the time.)

Finally I want to preserve a conversation that took place about 10 years ago when the Kindlebergers, the Samuelsons, the Solows, and Ingo and Barbara Vogelsang were dinner guests of the McFaddens. German economists were mentioned and Ingo Vogelsang asked if anyone remembered George Halm. Ingo thought that must now be very old. Oh no, said Charlie, mature maybe but certainly not what you would describe as old. You’re right, said Paul. What’s old about 80? It seemed funnier to me then than it does now. Now it’s just a home truth: what’s so old about 80? Not a thing, not if you have been, as Charlie has been, devoted to his colleagues and his students, and full of ideas, always full of ideas.

Robert M. Solow

Source: Letter from Robert M. Solow included in Reminiscences of Charles P. Kindleberger on his Eightieth Birthday, October 12, 1990 in the Charles P. Kindleberger Papers, Box 24, MIT Libraries, Institute Archives and Special Collections.

Image Source: Charles Kindleberger in MIT Technique, 1950.

Tags Kindleberger, McFadden, Samuelson, Solow, Vogelsang

Economists Funny Business M.I.T.

M.I.T. Analysis in Wonderland. Graduate Student Skit, 1975

Post author By Irwin Collier
Post date 2017-09-02

The annual skit party was a huge social event in the economics department at MIT in the 1970s and presumably before and after. Each of the cohorts was expected to write and perform its own skit in which economics and economics professors were the principal targets. Faculty written skits were often a part of the festivities. Here in this posting for the historical record, a parody of Alice in Wonderland set in the Wonderland Institute of Technology in 1975 written by the first-year class of 1974-75. But first I provide a list of my classmates with links to some biographical information where I was able to find something…whatever happened to Paul Krugman? Not everybody participated in the preparation and performance so there remains a presumption of comic innocence for the majority of the following.

In 1978 many of this cohort were involved in Casablank, a parody of the movie Casablanca. That script has been transcribed and posted at the highlighted link.

__________________

First Year Economics Graduate Students, 1974-75
M.I.T. (Spring 1975)

Abel, Andrew B.
Aspe, Pedro A.
Begg, David K. H.
Beleza, Luis Miguel C. P.
Bookstaber, Richard M.
Collier, Irwin L., Jr.
Datcher, Linda P.
Daula, Thomas V.
Desormeaux, Jorge J.
Donnelly, John F.
Duarte, Virgulino
Klorza, Santiago C.
Feiger, Margaret C.
Frankel, Jeffrey A.
Geehan, Randall R.
Giavazzi, Francesco
Halpern, Janice D.[sic, H.?]
Helms, L. Jay
Hill, Raymond D.
Krasker, William S.
Krugman, Paul R.
Malveaux, Julianne M.
Mincy, Ronald B.
Mooney, Patricia D.
Mork, Knut A.
Nagatani, Hiroaki
Neuer, Margaret R.
Smith, David A. [Alton]
Startz, Richard
Winicker, Mary K.

Source: M.I.T. Archives. MIT Department of Economics Records, Box 1, Folder “Women & Minorities”.

__________________

While transcribing this skit from my own days as a graduate student, I discovered how much I had indeed forgotten. The mapping of many a character to the corresponding faculty member was no longer obvious to me. I have added a listing of Dramatis Personae with annotations based on the combined incomplete memories of myself, Jeff Frankel, Dick Startz, Andy Abel, Ray Hill and Jay Helms. Perhaps some long-lost member of the troupe will stumble across this page and help me fill in the blanks, especially with respect to casting (20 characters!).

______________________

ANALYSIS IN WONDERLAND

Composed and performed by the first-year economics graduate students at M.I.T.
Second term, 1974-75

DRAMATIS PERSONAE

Narrator: played by Richard Bookstaber
Alice (Representative Graduate Student): played by Margaret (née Agnew) Feiger
Advisor (presumably the actual first-year advisor, Peter Diamond): actor unknown
Cheshire Cat (Jagdish Bhagwati): actor unknown
Micro: (Hal Varian?): actor unknown
Macro: (Stanley Fischer?): actor unknown
Quick & Dirty (Martin Weitzman): actor unknown
Palmer (Palmer, an actual Sloan School graduate student): actor unknown
Dormouse (Evsey Domar?): actor unknown
Mad Hatter (Charles Kindleberger): played by Jeffrey Frankel
March Hare (Robert Engle?): actor unknown
Tweedledee (Jerry Hausman): possibly played by Jay Helms
Tweedledum (Robert Hall): possibly played by Bud Collier
Knave of Hearts (Franco Modigliani): actor unknown
Knave of Clubs (Arthur Burns): actor unknown
Knave of Spades (William McChesney Martin): actor unknown
Knave Alan (Allan Greenspan): actor unknown
King (President Gerald Ford): actor unknown
Joker (Paul Samuelson): possibly played by Ray Hill
White Rabbit (Robert Bishop?): actor unknown

ACT I

Narrator:	The first year class presents… Analysis in Wonderland, a tragicomedy in four unnatural acts. Any resemblance to faculty members living or otherwise should be inferred from the initials worn by the characters. Act I, Alice enters Wonderland and meets the Cheshire cat.
(Alice is sitting at a table reading Samuelson’s Economics.)
Narrator:	One day Alice was reading a book, but she was getting very bored, for the book had no conversations or jokes in it.
Alice:	And what is the use of a book without conversations or jokes?
Narrator:	And so she began to drift off. And eventually she noticed that there was someone on the other side of the desk…
Advisor:	Hi! Welcome to the Wonderland Institute of Technology. You must be a first year graduate student. I’m your first year advisor, and it’s my job to talk to you and give you a feeling that someone cares about you personally. Now, let me see your schedule (grabs book). Well, uh, (looks at book then says with emphasis) Paul, this schedule looks fine to me (signs it) and remember to turn in your roll cards on the first day of each class. (Through all this Alice keeps going “uh” and “but”…but can’t manage to say anything) Remember that if you have any questions or problems, just come in and talk to me, I have plenty of time. Excuse me! (The advisor gets up and runs out. Alice runs after, then comes back)
Alice:	What a strange place! But where should I go from here? Why there’s a Cheshire Cat. (Enter Cheshire cat) Excuse me, sir, but can you tell me where I ought to go from here?
Cheshire Cat:	Why, I’m wery [sic] glad you asked me that. You should go to the optimal point, of course.
Alice:	But how long will that take me?
Cheshire Cat:	I can’t tell you that, listen to this. (Turns on radio, which produces static. Turns it off.) You see! Our economic theories are all static.
Alice:	I would like to see some faculty.
Cheshire Cat:	Well, you could go to Harward [sic], but it’s wery rare that anyone sees any faculty there. Or you could stay here, but everyone here has completely lost their faculties. They’re all mad, you know.
Alice:	But I don’t want to go among mad people.
Cheshire Cat:	Oh, you can’t help that; we’re all mad here. I’m mad. You’re mad.
Alice:	How do you know I’m mad?
Cheshire Cat:	Well, a physicist’s not mad, you grant that? Now, a physicist starts with facts and tries to find theories that fit them. I start with theories and don’t bother with facts. Therefore I’m mad. Yes?
Alice:	But what are your theories about?
Cheshire Cat:	Do they have to be about anything?
Alice:	Well, I’ve often seen a subject without a theory, but a theory without a subject? It’s the most curious thing I ever saw in all my life! (Alice suddenly starts)
Cheshire Cat:	Don’t worry, it’s just the inwisible hand.
(Enter two characters with paper hats (?) on which are cross diagrams. One has a potato chip taped to his shoulder.)
Cheshire Cat:	They’re Mike and Mac Ro
Micro:	Someone must stop him! It’s shameful! Look at that silly diagram he’s wearing! It’s a disgrace to the profession.
Macro:	It’s a perfectly good diagram. Not like that ridiculous diagram you’re wearing!
Alice:	But the diagrams look just the same.
Cheshire Cat:	Shhh! You’ll only get them more upset.
Alice:	Why don’t you try to talk your differences over?
Micro:	Well, we microeconomists believe in logic, so I’m willing to reason it out.
Macro:	You can’t expect me to be reasonable. Can’t you see I’ve got a chip on my shoulder?
Alice:	Why, yes—it’s a potato chip in fact.
Macro:	I wear it in honor of our founder, Cain’s. So prepare to defend yourself.
Micro:	I warn you, I’m a master of the Marshallian arts.
Macro:	But I’m armed with the most deadly tool of macroeconomics: (pulls out several pairs of pliers)…Multi-pliers!
Micro:	And I have the most dangerous concept of microeconomics. (pulls out a slingshot) Elasticity!
Alice:	Oh no, they’re going to have a duel and micro is a semi-strict under dog! (Mike and Mac turn back to back) (enter panting, the Quick and Dirty banker, carrying a money bag and a calculator)
Q&D:	Wait! You can’t have a duel without a primal.
Alice:	Who are you?
Q&D:	I’m duh quick and doity bankuh. And by my quick and doity bankuh’s calculation, I find dat what you need is more liquidity which I will now provide. (out of the moneybag he pulls a waterpistol, shoots everyone, then runs)
Macro:	Now we’re all wet. What are we going to do?
Alice:	It’s all right, I know just what to do. Here’s the driest thing I know. (begins reading from Bishop [notes])
Micro:	This isn’t getting me dry at all.
Macro:	Now there’s only one way to get dry, and this will prove to you that macroeconomics is good for something.
Alice:	What are you going to do?
Macro:	I’m going to do some hand-waving! Macroeconomists are always drying things out by waving their hands.
Alice:	They are?
Macro:	Of course! That’s why none of their theories will hold water. Now, watch this! (He begins to draw a diagram)
Alice:	What do those lines mean?
Macro:	Oh, I don’t know. But they’re pretty good lines, and Lord knows I have the right to a few good lines in this ridiculous skit.
Palmer:	Haven’t you got the A line drawn wrong?
Macro:	(Going very fast) Well, that line doesn’t really matter. (erases it)
Palmer:	But then shouldn’t you erase the k line, too?
Macro:	Well, all right (erases).
Palmer:	What do X and Y stand for?
Macro:	Oh, don’t worry about the axes (erases them). Actually, these are not quite like this anyway. (erases remaining lines) And, as you can see, equilibrium is at the intersection.
Alice:	Well, I’ve often seen lines without an intersection, but an intersection without lines? It’s the most curious thing I ever saw in my whole life.
Narrator:	You’re repeating yourself, Alice.
Alice:	What do you expect, Mel Brooks?
Micro:	You think that’s hand-waving! Why, I have seen hand-waving, compared with which that is no better than eternal bliss.
Alice:	But what is better than eternal bliss?
Micro:	Well, a ham sandwich, for instance.
Alice:	But nothing’s better than eternal bliss.
Micro:	And a ham sandwich is better than nothing. So, by transitivity, there you are!
Alice:	(ignoring Micro as she turns to the Cheshire Cat) Isn’t there anyone here who isn’t mad?
Cheshire Cat:	You might try an assistant professor.
Alice:	Which one should I try?
Cheshire Cat:	It doesn’t matter—pick one at random.
Alice:	How do I do that?
Cheshire Cat:	Just draw one from an assistant professor urn.
Alice:	What’s an assistant professor urn?
Micro, Macro, Cheshire Cat, Narrator (in unison)	About eleven thousand a year!
(pause)
Narrator:	…and a copy of Bishop’s notes.
Alice:	Curiouser and curiouser.
(exeunt all)

ACT II

Narrator:

Act II. The Mad Boston Tea Party

(Dormouse sleeps throughout. Mad Hatter stuttering throughout; price keeps going up on hat.)

Mad Hatter:

What’s your liquidity preference my dear?

Alice:

It looks like you have nothing but tea.

Mad Hatter:

That is all we have.

Alice:

Then why did you ask?

Mad Hatter:

Consumer sovereignty. (gives Alice tea) I would like to suggest to you that that will be eight pence (takes shilling from Alice.)

Alice:

No cover charge?

Mad Hatter:

A gentleman never takes cover, as we say in the old country.

Alice:

Hey, I gave you a shilling and you only gave me two pence change back!

Mad Hatter:

A gentleman never counts his change.

Hare:

Gentleperson!

Alice:

This sounds like a liquidity trap to me.

Mad Hatter:

Alright, I’ll put it down on the T-account…(gets book)

Alice:

There is something floating in my tea.

March Hare:

(looking) Exchange rates.

Mad Hatter:

… two pence… (fiddling with T-accounts)

Alice:

No it’s ice.

Mad Hatter:

…under frozen assets.

Hare:

Gary Becker! (general laughter)

Mad Hatter:

Why is the Poisson distribution like a temperature of 102?

Alice:

Well, let’s see… I suppose you would have to integrate e to the…

Mad Hatter:

Integration! They only do that in South Boston.

March Hare:

No, that’s disintegration.

Alice:

I suppose you have to differentiate between…

Mad Hatter:

Differentiate? The first derivative is the last refuge of a scoundrel.

Alice:

I give up, why is the Poisson distribution like a temperature of 102?

Mad Hatter:

I haven’t the slightest idea.

Alice:

That’s not very funny.

Mad Hatter:

Funny?

March Hare:

She wants to hear a joke.

Mad Hatter:

A joke, a joke!

March Hare:

…Fogel and Engerman! (general laughter)

Alice:

I’m afraid I don’t get it.

Mad Hatter:

Well, you see, certain names are standing jokes around here, like…Walt Whitman Rostow! (laughter)

Alice:

Can I try one?

Mad Hatter:

Go right ahead.

Alice:

Milton Friedman! (silence among the actors who look sour a moment after the audience’s laughter dies down.)

Mad Hatter:

Try another one.

Alice:

Jay Forrester….(more silence).

Alice:

I don’t understand. What’s wrong?

Mad Hatter:

Well, some people just can’t tell a joke.

March Hare:

Perhaps you’d like to see a proof?

Mad Hatter:

A proof! A proof!

March Hare:

This is a proof I recited before the Queen of Hearts. (goes to board)

Twiddle Twiddle lambda star
Alpha hat, beta hat times X bar.
Alpha hat, beta hat sigma X_i

One over n, equals mean of Y.

[writes on board:]:
$\begin{array}{l}\mathop{{\tilde{\tilde{\lambda }}}}^{*}=\hat{\alpha }+\hat{\beta }\cdot \bar{X}\\=\hat{\alpha }+\hat{\beta }\cdot \sum{{{X}_{i}}}\left( \frac{1}{n} \right)=\bar{Y}\end{array}$

Mad Hatter:

Time to move on to the next place.
(everybody gets up to move)

Alice:

What?! You mean you just move on to the next place without erasing?

March Hare:

We don’t have to erase; we just relabel the axes.

Mad Hatter:

I always erase twice, once before the period and once afterward. (erases)

(everyone moves down one, and relabels axes and curve)

Alice:

And I suppose when you use up all the places you just start again at the beginning of the circle?

Mad Hatter:

Yes. It’s called recycling.

March Hare:

You better wake up the Dormouse.

(Mad Hatter and March Hare exit)

Alice:

(To Dormouse) Wake up, wake up. (shakes him)

Dormouse:

(waking) Whaaaaat?

Alice:

Wake up. It’s over.

Dormouse:

(Pause…) Can I Xerox your notes?

Alice:

(starts to leave. turns and says) Why is a Poisson distribution like a temperature of 102? (Pause. Alice exits)

Dormouse:

(alone) Because it’s not normal.

ACT III

Narrator:	Act III. Alice meets Tweedledum and Tweedledee, who have a battle.
(Alice enters and sits down. Dum and Dee enter, arm-in-arm, prancing. Dee sits down; Dum goes to the board and begins. Throughout, Dee is frantic, pacing, and talking very fast. Dum is red-faced, slow-talking, constantly looking at the floor; arms folded, with noticeably short pants and a turtleneck.)
Dum:	So, to conclude yesterday’s talk, we can see that it’s entirely possible that for the two sub-groups, say, men and women, you could have different parameters in the regression…
Dee:	(jumping up to interrupt) I think I can draw a picture that will make that all clear. Wish I had my colored chalk… [draws pictures].

	…so you see that while the slope in the pooled regression is zero, contrariwise; it’s actually negative for men and positive for women.
Dum:	…Sort of, different slopes for different folks, which tells us…
Dee:	[interrupting] …and contrariwise, I can clear this up by drawing a picture that would show…[draws picture]

Dum:	[interrupting]…that there could be kinky behavior in some subgroups….
Dee:	Right. (sits down)
Dum:	But, as I was going to say, this illustrates the 287^th “Iron Law” of econometrics, which states that….
Dee:	(again jumping up to interrupt)…Contrariwise,…I think I can make that clear with a picture in four dimensions. Damn, I just wish I had my colored chalk…(draws pictures)

	…which shows that…
Dum:	(getting very irritated, interrupting) Nohow! The time has come, the Walras said to talk of many things, of matrices and error terms of cabbages and kings, and keeping out your pictures that keep complicating things.
Dee:	Contrariwise! In my way of showing things I’m better far than you, Your talk is like an old dead horse– It’s slow, not unlike glue.
Dum:	Now wait a second…
(Dum and Dee break into a general dispute, yelling at one another.)
Dum:	….you’re not consistent…
Dee:	…you’re almost surely driving me to the p-limit…
Dum:	…you’re a homoscedastic deviate…
(While Tweeledum and Tweedledee continue arguing, the Narrator breaks in…)
Narrator:	So Tweedledum and Tweedledee Agreed to have a fight For Tweedledum said Tweedledee Couldn’t prove Gauss-Markov right.
Dum:	Of course we must have a fight. What time is it?
Dee:	10:40—We’re late getting started, so we better hurry up.
Dum:	Let’s fight ‘till noon, then have lunch.
Narrator:	So they agreed to fight and, as Alice watched, they began to see who could prove the theorem better.
(Dum and Dee give lectures simultaneously, beginning and ending at the same time with the same words.)
Dee:	[simultaneously with Dum] I CLAIM THAT OLS IS BLUE. Basically, we want to prove that ${{\sum{\left( \mathbf{{X}'Y} \right)}}^{-1}}\mathbf{{Z}'}\beta \le {{\sum{\left( \mathbf{{X}'\tilde{Y}} \right)}}^{-1}}\mathbf{{Z}'}\gamma$ Now just take the inverse of the antilog of the Jacobian and delete the fourth row. Let little x be the square root of big X, and let medium-sized x be measured from its mean; substitute back in and we have ${{\sum{\left( \mathbf{{X}'}\left[ \begin{matrix} \mathbf{Y} \\ \mathbf{Z} \\ \end{matrix} \right] \right)}}^{-1}}{\left\| J \right\|\cdot \Pi \cdot {{R}^{2}}}/{\text{hat size}}\;$ which you will recall from 14.381. Then, as I promised, you can use this by transposing Z and x, deleting R and reversing the inequality…..OH SHIT…I’ve screwed up…Well, just change every medium-sized x in your notes to big X, delete all sigmas, and reverse the third and fourth steps of the proof I gave last week which was right here on the board. Or look in Tahl’s [Theil with an West Virginian accent] book. Everyone should understand this perfectly—and of course the notation is clear. Then, adding the obvious steps we learned in 14.381 to this proof completes the argument. SO OLS IS BLUE, as promised.
Dum:	[simultaneously with Dum] I CLAIM THAT OLS IS BLUE. Well….a lot of people go around proving the Gauss-Markov….Theorem….but the literature is full of cases….where what’s done is wrong….Take matrix addition for example….Some people just add element-by-element….while often the more interesting thing to do…..is to use the Choleski factorization of one of the matrices….And recalling that Tweedledum and I are the final arbiters of econometrics at W.I.T. (at least until Fisher gets back off leave) you’d better do it this way, or consider dropping the course. SO OLS IS BLUE, as promised.
Palmer:	Shouldn’t you invert that Jacobian before proceeding to expansion in Lambert spaces….
Dee:	[interrupting] If it was so, it might be; If it WERE so, it could be; But as it isn’t, it ain’t. That’s logic.
Narrator:	Alice couldn’t figure out just who had won the fight, although Tweedledee HAD used a lot more words….
[exeunt]

ACT IV

Tweedledee:	Act Four, “The trahl”.
Narrator:	Within a few moments Alice will witness the trial of the Knave of Hearts who is in deep trouble now because the King of Hearts is flying all the way from the Capital of Wonderland to preside at the trial. You are undoubtedly familiar with the Knave of Hearts most important contribution to economic analysis, “A Life-Cycle Built for Two”. But now he has been accused of starting the latest Wonderland inflation and depression—or as they say in the seminar rooms down by the River Chuck—“inflession”. The economic experts of the King—Knave Arthur of Clubs, Knave William of Spades, and Knave Alan of Diamonds—have all convinced him that economic voodoo has been practiced on models on the Wonderland economy in the hallowed halls of W.I.T. Since the King of Hearts has never played with a full-deck in his life, he was easily deceived by these rascals. Fortunately for the Knave of Hearts the Queen was unable to come to the trial due to a prior speaking engagement before the Veterans of Foreign Business Cycles.
	(Enter Knaves of C.S. &D. They play “Hail to the Chief” on kazoos for a few bars and end with “Pop goes the weasel.” Then the King enters wearing a helmet and carrying a football. A WIN button is conspicuous. King bends over, hikes the ball to Knave of Clubs. King sits down on throne in middle of stage.)
Knave of Clubs.	Where’s the jury?
King of Hearts.	(points at the Knaves) You. (Knaves turn around but no one is behind them. King continues…) Yes, you. You are his peers. And for a proper trial before we cut off his grant, we must have a jury of his peers.
Knight of Diamonds.	(tossing a coin à la [George] Rath) We know what to do.
	(Enter all the other characters from Wonderland, except Joker and reporters)
King:	What are the charges?
Knave of Clubs:	Eleven dollars a barrel.
White Rabbit:	The King of Hearts, he has no smartz But Unemployment yes. The Knave of Hearts has played his part To make inflation worse.
Knaves in the jury-box:	Boo, Hiss, Boo!
King:	It is a pretty despicable offense isn’t it?
Knave of Spades:	Are you kidding? The charges don’t even rhyme.
King:	Will the defendant rise?
Knave of Hearts:	If I had known you were going to ask me that question I would have built it into my model.
King:	I’ll hold you in contempt!
Knave of Hearts:	I don’t suppose I’ll become overly fond of you either.
King:	Let the jury note the defendant’s behavior.
Knave of Hearts:	Which reminds me of my 1944 paper, but that is of course a secondary issue given the gravity of the problems which we now face. While I can’t formally defend the following equation to my own satisfaction, I think that it does make some economic sense. But first I should say that things will be getting much worse before they will get better, I can give you the latest predictions…..
King:	(fuming through all of the above) Bind the bearer of bad tidings or he’ll talk us to death…
Knave of Clubs:	But what shall we bind him with?
King:	Bearer bonds, naturally!
	(The Knaves come out of the jury box and use first-aid gauze to tie the knave of Hearts by body and legs & gag him—leaving only one arm free. Knave of Hearts has been talking with his hands throughout his testimony, and he continues gesturing with his free hand while occasional grunts can be heard under his gag.)
King:	May it be noted that in the tradition of Wonderland jurisprudence we have left the defendant with one degree of freedom in spite of his lack of respect for this court. Are there any witnesses?
Mad Hatter:	I am.
King:	Take the stand.
Knave of Clubs (to Mad Hatter):	Did the defendant do it?
Mad Hatter:	Certainly not.
Knave of Spades:	And you witnessed this with your own eyes?
Mad Hatter:	And I didn’t hear or smell him do it either.
Knave of Diamonds:	But how strong was your prior?
Mad Hatter:	Well, I don’t like to boast but when I was a young man working for the OSS during the War, I once spent a week in bed with a….
Knave of Clubs:	No, no, no. How much could new data affect your prior beliefs, and if considerably, what was your posterior judgment?
Mad Hatter:	I don’t now, that’s a good one. But I’ve got one for you. What weighs 12,000 pounds and has a twice differentiable indifference map over hay and peanuts?
King:	That’s irrelevant!
Mad Hatter:	That’s right.
King:	Give your evidence, or I’ll cut your grant off on the spot!
Mad Hatter:	(stutters) I’m a poor man your majesty.
King:	You’re a very poor speaker. (knaves laugh) I thought that was a pretty good one too. I’m in the mood for a few laughs (to White Rabbit) Call in the Joker.
White Rabbit:	The Joker.
(Enter Joker, attended by secretary, fans seeking autographs, and reporters taking pictures)
Joker:	It’s great to be back in Wonderland folks. A funny thing happened on my way…
King:	(interrupting) You have been called here to testify. What is the Keynesian viewpoint?
Joker:	As Uncle Miltie Friedman would say, only blindmen use Keynes. Hey, that’s a pretty good one. (To secretary) Write that down for my textbook—Better yet, put out a new edition. But, seriously folks just the other day I was leafing through a volume of Ricardo’s letters in the Sraffa collection when I came across a letter from Ricardo to James Mill describing the following encounter between Thomas Malthus and David Ricardo. Ricardo was walking down the street one day when he ran into the good Reverend who was, much to Ricardo’s surprise, sporting a banana in his left ear. Ricardo was surprised because Malthus was always the last of the political economists to adopt a new fashion. Finally Ricardo’s curiosity got the better of him and he asked, “I say Tom, why is that banana in your ear?” Malthus didn’t seem to understand—but that was hardly unusual as Malthus, more often than not, couldn’t understand what his friend was saying. In fact, old Malthus personally thought that Ricardo couldn’t optimize his way out of a paper sack, much less a Lambert space. Finally Malthus said, “I’m sorry Dave, but I can’t hear you, you see, I have this banana in my ear.” (everyone in the courtroom is sleeping) And now….ahem…ahem (everyone wakes up). A few of your favorite impressions: Francois Quesnay! (He covers his face with his hands; removes hands; expression unchanged) Böhm-Bawerk! (same routine)
King:	Enough!
Joker:	Nassau Senior! (same routine)
King:	Take him away. (White rabbit and knaves carry Joker off, still doing impressions. e.g. Stanley Jevons, Joseph Schumpeter, Vilfredo Pareto….)
King:	Who is the next witness?
Rabbit:	Alice!
Alice:	Here! (she goes to the witness stand)
King:	What do you know about this business?
Alice:	Nothing.
King:	If you say anything, I’ll give you part credit. Otherwise….
Alice:	But I don’t need part credit!
King:	Young lady, I’m growing impatient. Either tell us something about this business or I’ll cut off your grant.
Alice:	(crying) But I don’t have a grant.
King:	Then why are you so upset, indeed.
Alice:	What sort of….(alarm clock goes off in the jury box and the knaves wake up).
Knaves:	(in unison) Verdict time!!
Knave of Spades:	(To Knave of Diamonds) Do you have the coin?
Knave of Diamonds:	Yes I do. (to Spades). You’re innocence, (to Clubs) you’re guilt. Call it innocence. (he tosses the coin high in air)
Alice:	What kind of trial is this?
King:	Don’t be a stupid child. It’s a Bernoulli trial.
Knave of Spades:	Tails.
Knave of Diamonds:	Sorry it’s heads. He’s guilty!
Alice:	May I see the coin? (it’s tossed to her) This coin has two heads.
King:	Did anyone say p equaled one half?
	(Lights out. Everyone leaves but Alice. Lights on she has book and wakes up.)
Alice:	I’m glad I woke up before I had to take generals. (She leaves)
Audience:	(Deafening applause) Bravo. Cheers. Whoopee.

Source: Transcribed by Irwin Collier from personal copy.

Tags Abel, Aspe, Begg, Beleza, Bhagwati, Bishop, Bookstaber, Collier, Datcher, Daula, Desormeaux, Diamond, Domar, Donnelly, Duarte, Feiger, Frankel, Giavazzi, Hall, Halpern, Hausman, Helms, Hill, Kindleberger, Klorza, Krasker, Krugman, Malveaux, Meehan, Mincy, Modigliani, Mooney, Mork, Nagatani, Neuer, Samuelson, SmithDA, Stanley Fischer, Startz, Weitzman, Winicker

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Size distribution of graduate and undergraduate programs in economics. U.S., 1963-65

Post author By Irwin Collier
Post date 2017-05-20

These are the last two statistical tables from the so-called “Cartel” summary report from December 1965 of leading economics departments in the U.S. intended to provide orientation for departmental chairpersons in salary negotiations. Today’s posting gives the numbers of undergraduate and graduate majors reported by 29 departments.

Earlier postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors across departments. Two previous postings have the actual distributions for entering salaries for new Ph.D.’s for 1964-65 and 1965-66 and the anticipated range of salary offers for new Ph.D.’s for 1966-67. Those first five reports from The Cartel provide distributions of median or average incomes or ranges of salary offers by ranks across departments. Table 6c from the summary report that gives the salary distributions by rank for 335 professors, 143 associate professors and 185 assistant professors from all 27 departments.

Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

____________________

TABLE 7c
Graduate majors in Economics – 29 institutions:

	1963-64	1964-65	1965-66 (Estimate)
300 and over	2	2	1
200-299	0	0	2
150-199	3	4	5
100-149	6	5	6
80-99	4	4	3
60-79	5	7	5
40-59	6	4	4
20-39	2	1	0
1-19	1	1	1
Number of departments reporting:	29	28	27
Total number of students:	2,963	3,057	3,118

____________________

TABLE 8C
Undergraduate majors in Economics – 29 institutions

	1963-64	1964-65
300 and over	4	4
250-299	1	1
200-249	3	2
150-199	4	6
100-149	8	5
80-99	1	1
60-79	2	1
40-59	2	3
20-39	1	1
1-19	1	1
Number of departments reporting:	27	25
Total number of students:	4,550	4,312

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source: quick meme website.

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Economics Professors’ Salaries by Rank (6), 1965-66

Post author By Irwin Collier
Post date 2017-05-16

This is the sixth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. In the previous five tables The Cartel reports median or average incomes or ranges of salary offers by ranks across departments. In this posting we have Table 6c from the summary report that gives the salary distributions by rank for 335 professors, 143 associate professors and 185 assistant professors from all 27 departments.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

____________________

TABLE 6c

Salaries of Economists (9-10 month, academic year, 1965-66) in 27 of the 29 Departments of Economics (The Cartel):
N = Number of Persons

MID POINT OF RANGE	PROFESSORS	ASSOCIATE PROFESSORS	ASSISTANT PROFESSORS
26,750/and over	2
26,500	0
26,000	2
25,500	1
25,000	8
24,500	0
24,000	4
23,500	2
23,000	7
22,500	2
22,000	12
21,500	7
21,000	10
20,500	5
2,0000	22
19,500	10
19,000	13
18,500	11
18,000	24
17,500	8
17,000	19
16,500	23
16,000	27
15,500	20	1	0
15,000	21	2	1
14,500	14	2	0
14,000	22	10	0
13,500	10	12	0
13,000	10	13	1
12,500	7	18	2
12,000	6	20	1
11,500	3	21	7
11,000	3	13	9
10,500	0	18	18
10,000	0	9	35
9,750		1	9
9,500		2	28
9,250		1	11
9,000		0	24
8,750		0	8
8,500		0	13
8,250			2
8,000			15
7,750			1
	N=335	N=143	N=185

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Image Source: “Me and my partner” by C. J. Taylor on cover of Punch, December 25, 1889. Library of Congress Prints and Photographs Division Washington, D.C.

Expected New PhD Starting Salaries in U.S. Economics Departments (5), 1966/67

Post author By Irwin Collier
Post date 2017-05-15

This is the fifth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Table 5c give figures for the anticipated range of salaries for “freshly completed PhD’s” for the coming academic year (1966-67) across the departments reporting. Earlier postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors. The previous posting has the actual distributions for entering salaries for new Ph.D.’s for 1964-65 and 1965-66. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

The copy of this table in the Johns Hopkins University archives has a useful handwritten addition. It is noted that the median lower bound of the range is $9,250 and the median higher bound of the range is $10,000. Thus one might say a measure of the range of the anticipated, as of December 1965), 9-10 month salary offers for “freshly completed PhDs” for 1966-67 was ($9,250 — $10,000), though such a range was not necessarily anticipated by any one of the 27 departments responding to that question.

Compared to Table 4c, this table tells us that the range of offers for “freshly completed PhDs” was anticipated to move up $250 about a 2.67% nominal increase from 1965-66 to 1966-67.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

____________________

TABLE 5c
Departments Expect to Have to Offer to Get
“Freshly Completed PhD’s for Next Year, 1966-67

MID-POINT OF RANGE	FROM	TO
13,000	0	0
12,500	0	0
12,000	0	1
11,500	0	0
11,000	0	6
10,500	0	7
10,000	5	6
9,750	0	0
9,500	8	4
9,250	1	0
9,000	8	2
8,750	1	0
8,500	1	1
8,250	0	0
8,000	3	0
N=	27	27

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

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New PhD Starting Salaries in U.S. Economics Departments (4), 1964/5-1965/66

Post author By Irwin Collier
Post date 2017-05-14

This is the fourth table from the so-called “Cartel” summary report from December 1965 of 9-10 month salaries paid in U.S. economics departments. Table 4c give figures for the distribution of salaries for “freshly completed PhD’s” across the departments reporting. Previous postings gave the distribution for full-professors, the distribution for associate professors, and the distribution for assistant professors. The next posting has the anticipated (as of December 1965) range of salaries to hire freshly completed PhD’s for the coming academic year, 1966-67. Refer to the first posting in this series of tables for information about the compiler Professor Francis Boddy of the University of Minnesota and a list of the 30 departments belonging to the Chairmen’s Group.

Using the BLS web CPI Inflation calculator, one can inflate nominal levels (say for December 1965, the date of the report) to April 2017 using a factor of 7.69.

______________________

TABLE 4c
Entering Salaries of “Freshly Completed PhD’s” of New Staff Members
in the Fall of 1965-66 1964-65

	MINIMUM		MEDIAN		MAXIMUM
MID-POINT OF RANGE	1965-66	1964-65	1965-66	1964-65	1965-66	1964-65
Over 10,999	0	0	0	0	1	0
10,500	0	0	0	0	2	1
10,000	2	0	4	3	7	0
9,750	2	0	4	0	1	0
9,500	4	1	2	0	2	4
9,250	1	2	3	3	1	3
9,000	3	6	0	5	3	6
8,750	1	1	3	5	0	1
8,500	4	5	3	5	2	5
8,250	1	1	0	2	0	1
8,000	2	3	1	0	1	0
7,750	0	0	0	0	0	1
7,500	0	1	1	2	0	1
7,250	1	1	0	0	0	0
N=	21	21	21	25	20	23
Median	$9,000	$8,500	$9,250	$8,750	$9,750	$9,000
Mean	$8,952	$8,583	$9,190	$8,820	$9,600	$8,913

Source: Johns Hopkins University. The Ferdinand Hamburger, Jr. Archives. Department of Political Economy, Series 5, Box 6, Folder 2 “Statistical Information”.

Reading Assignment, Economics 26 Spring Term 1948

Reading Assignments A

B

C

D

Business Cycles Ec 26 Examination May 27, 1948 [from mimeographed copy]

20 minutes

15 minutes

15 minutes

Business Cycles Ec 26 Examination May 27, 1948 [from carbon copy]

20 minutes

15 minutes

Business Cycles Ec 26 Examination Thursday, May 20, 1943

I

II

THEORY OF NATIONAL INCOME AND EMPLOYMENT

E. D. Domar 14.451 Fall Term 1965-66 READING LIST

I. NATIONAL INCOME AND RELATED ITEMS (September 21 – October 14)

II. GENERAL AGGREGATIVE SYSTEMS (October 19 – October 28).

III. PRICE FLEXIBILITY AND EMPLOYMENT (November 2-11)

IV. THEORY OF INTEREST (November 16-25)

V. CONSUMPTION AND SAVING (November 30- December 9)

VI. INVESTMENT DECISIONS (December 14 – January 6)

VII. MULTIPLIER AND ACCELERATOR (January 11 – 18)

VIII. MISCELLANEOUS (If time permits)

MIDTERM EXAMINATION (One hour and twenty minutes)

THEORY OF INCOME AND EMPLOYMENT E. D. Domar ….. 14.451 ….. December 9, 1965

FINAL EXAMINATION Three Hours

E. D. Domar ….. 14.451 ….. January 26, 1966

READING LIST 14.452

I. Economic Growth

II. Short-Run Macrodynamics

First Examination 14.452 April 13, 1966

TRAVELS WITH CHARLIE

First Year Economics Graduate Students, 1974-75 M.I.T. (Spring 1975)

ANALYSIS IN WONDERLAND

Composed and performed by the first-year economics graduate students at M.I.T. Second term, 1974-75

DRAMATIS PERSONAE

ACT I

ACT II

ACT III

ACT IV

TABLE 7c Graduate majors in Economics – 29 institutions:

TABLE 8C Undergraduate majors in Economics – 29 institutions

TABLE 6c

Salaries of Economists (9-10 month, academic year, 1965-66) in 27 of the 29 Departments of Economics (The Cartel): N = Number of Persons

TABLE 5c Departments Expect to Have to Offer to Get “Freshly Completed PhD’s for Next Year, 1966-67

TABLE 4c Entering Salaries of “Freshly Completed PhD’s” of New Staff Members in the Fall of 1965-66 1964-65

Reading Assignment, Economics 26
Spring Term 1948

Reading Assignments
A

Business Cycles
Ec 26 Examination
May 27, 1948
[from mimeographed copy]

Business Cycles
Ec 26 Examination
May 27, 1948
[from carbon copy]

Business Cycles
Ec 26 Examination
Thursday, May 20, 1943

E. D. Domar 14.451 Fall Term 1965-66
READING LIST

I. NATIONAL INCOME AND RELATED ITEMS
(September 21 – October 14)

II. GENERAL AGGREGATIVE SYSTEMS
(October 19 – October 28).

III. PRICE FLEXIBILITY AND EMPLOYMENT
(November 2-11)

IV. THEORY OF INTEREST
(November 16-25)

V. CONSUMPTION AND SAVING
(November 30- December 9)

VI. INVESTMENT DECISIONS
(December 14 – January 6)

VII. MULTIPLIER AND ACCELERATOR
(January 11 – 18)

MIDTERM EXAMINATION
(One hour and twenty minutes)

THEORY OF INCOME AND EMPLOYMENT
E. D. Domar ….. 14.451 ….. December 9, 1965

FINAL EXAMINATION
Three Hours

First Year Economics Graduate Students, 1974-75
M.I.T. (Spring 1975)

Composed and performed by the first-year economics graduate students at M.I.T.
Second term, 1974-75

TABLE 7c
Graduate majors in Economics – 29 institutions:

TABLE 8C
Undergraduate majors in Economics – 29 institutions

Salaries of Economists (9-10 month, academic year, 1965-66) in 27 of the 29 Departments of Economics (The Cartel):
N = Number of Persons

TABLE 5c
Departments Expect to Have to Offer to Get
“Freshly Completed PhD’s for Next Year, 1966-67

TABLE 4c
Entering Salaries of “Freshly Completed PhD’s” of New Staff Members
in the Fall of 1965-66 1964-65