Category: Suggested Reading

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Chicago Suggested Reading Syllabus

Chicago. Price and distribution theory. Metzler, 1952

 

 

 

Today’s reading lists for the core Chicago course in price and distribution theory as taught by Harvard’s man in Chicago, Lloyd A. Metzler, in 1952 is virtually identical to that of his reading lists for 1948-49 posted earlier. There were only a few additions and few deletions. More interesting are comparisons with the reading lists for the same course as taught by Milton Friedman in ca. 1947, Arnold Harberger in 1955, or Gary Becker in 1956.

 

____________________________

Economics 300A
Winter Quarter, 1952
Lloyd A. Metzler

  1. The Theory of Consumer’s Choice

A. Marshall, Principles of Economics, Book III.
J. R. Hicks, Value and Capital, Chapters I – V, and appendices to these chapters.
W. S. Jevons, Theory of Political Economy, Chapters I – IV.
P. A. Samuelson, Foundations of Economic Analysis, Chapters III, V, VII.
M. Friedman and L. J. Savage, “The Utility Analysis of Choices Involving Risk,” Journal of Political Economy, LVI (August, 1948) 279-304.
I. Fisher, “Measuring Marginal Utility,” in Economic Essays in Honor of John B. Clark (1927).
G. J. Stigler, “The Development of Utility Theory, I,” Journal of Political Economy, LVIII (August, 1950) pp. 307-327.
M. Friedman, “The Marshallian Demand Curve,” Journal of Political Economy, LVII (December, 1949), pp. 463-495.

  1. Production Functions and Cost Schedules

J. M. Cassels, “On the Law of Variable Proportions,” in Explorations in Economics (1936).
J. R. Hicks, Value and Capital, Chapter VI, VII, VIII, and appendices to those chapters.
J. Robinson, The Economics of Imperfect Competition, Chapter II.
P. A. Samuelson, Foundations, Chapter IV.
G. J. Stigler, The Theory of Price, Chapters VII, VIII.

  1. Market Price under Perfect Competition.

J. Robinson, Economics of Imperfect Competition, Book III.
A. Marshall, Principles, Book V.
G. J. Stigler, The Theory of Price, Chapters IX, X.

  1. Monopoly and Monopolistic Competition.

J. Robinson, Economics of Imperfect Competition, Books II, IV, V, and X.
E. Chamberlin, Theory of Monopolistic Competition, IV, V, VI, VII.

  1. Duopoly, Oligopoly, Bilateral Monopoly.

J. Marschak, “Neumann’s and Morgenstern’s New Approach to Static Economics,” Journal of Political Economy, LIV, (April 1946).
E. Chamberlin, Theory of Monopolistic Competition, Chapter III.
H. G. Lewis, “Some Observations on Duopoly Theory.” American Economic Review, XXXVIII (May 1948, supplement) 1-9.
O. Morgenstern, “Oligopoly, Monopolistic Competition, and the Theory of Games,” American Economic Review, XXXVIII (May 1948, supplement) 10-18.
W. Fellner, Competition Among the Few, New York, 1949.

  1. Modern Price Theory and Welfare Economics.

A. Burk (Bergson), “A Reformulation of Certain Aspects of Welfare Economics,” Quarterly Journal of Economics (1937-38).
A. C. Pigou, The Economics of Welfare (4th Edition), Part II, Chapters I – XI.
A. P. Lerner, The Economics of Control, Chapters I – XIX.
P. A. Samuelson, Foundations, Chapter VIII.
J. R. Hicks, “The Foundations of Welfare Economics,” Economic Journal XLIX (1939).
G. J. Stigler, “The New Welfare Economics,” American Economic Review, XXXIII (1943), 355-359.
T. de Scitovszky, “A Note of Welfare Propositions in Economics,” Review of Economic Studies, IX (1941-42) pp. 77-88.
P. A. Samuelson, “Evaluation of Real National Income,” Oxford Economic Papers, II, new series (January 1950) pp. 1-29.

 

Required purchases:

A. Marshall, Principles of Economics.
J. R. Hicks, Value and Capital.
E. Chamberlin, Theory of Monopolistic Competition.

 

Source: Duke University. David M. Rubenstein Rare Book, Manuscript and Special Collections Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder: “Reading Lists 300 A & B — 302”.

 

____________________________

Economics 300B
Major Topics and Selected Readings
Spring Quarter, 1952
Lloyd A. Metzler

The principal books to be used are as follows:

A. Marshall, Principles of Economics, eighth edition, reprinted 1947.
J. R. Hicks, Value and Capital, second edition, 1946.
B. Haley and W. Fellner, editors, Readings in the Theory of Income Distribution, reprinted 1947.
G. J. Stigler, Production and Distribution Theories, 1941.
J. R. Hicks, The Theory of Wages.

  1. Production Functions and the Doctrine of Marginal Productivity

B. Haley and W. Fellner, Readings, Chapters 5, 6, 7, 11.
Stigler, Production and Distribution Theories.
P. H. Douglas, “Are There Laws of Production?”, American Economic Review, XXXVIII (1948) 1-41.
E. Chamberlin, The Theory of Monopolistic Competition, Chapter 8.

  1. The Theory of Wages

B. Haley and W. Fellner, Readings, Chapters 13, 14, 16, 17, 19.
J. R. Hicks, The Theory of Wages, 1932.
R. A. Lester, “Shortcomings of Marginal Analysis for Wage-Employment Problems”, American Economic Review, 1946.
F. Machlup, “Marginal Analysis and Empirical Research”, American Economic Review, 1946.

  1. Capital and Interest

E. Böhm-Bawerk, The Positive Theory of Capital, 1891.
I. Fisher, The Theory of Interest, 1930.
W. Fellner and B. Haley, Readings, Chapters 20, 21, 22, 23,24, 26.
J. M. Keynes, General Theory of Employment, Interest and Money, Book IV.
A. Marshall, Principles, the relevant chapters in Books IV and VI.
J. R. Hicks, Value and Capital, Parts III and IV.

  1. Inter-relations of Wages, Interest, and Profits.

F. H. Knight, Risk, Uncertainty and Profit.
J. A. Schumpeter, The Theory of Economic Development.
K. Wicksell, Interest and Prices.
________, Lectures on Political Economy, Vol. I, Part 2.
J. S. Mill, Principles of Political Economy, Book IV.

 

Source: Duke University. David M. Rubenstein Rare Book, Manuscript and Special Collections Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder: “Reading Lists 300 A & B — 302”.

Source Image: “From family album, taken while Lloyd Metzler was a student at Harvard.”
“Lloyd A. Metzler” by Margiemetz – Own work. Licensed under CC BY-SA 3.0 via Commons.

 

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Harvard Suggested Reading Syllabus

Harvard. Undergraduate microeconomics reading list. Marglin, 1969-70

 

 

In the year after being granted tenure at Harvard, Stephen A. Marglin taught an undergraduate microeconomics course to which he invited Professors Galbraith, Arrow, Gintis and Dorfman for a discussion with his students. He included a copy of his reading list in his invitation to Galbraith which are both transcribed below. 

Marglin’s biography was featured in a few Harvard Crimson articles over the years (the common theme to these articles is “What’s a nice radical economist like you doing in a place like this?”): May 12, 1975; March 12, 1980 ; May 21, 1982 ; June 1, 2009.

 

____________________________________

Invitation from Marglin to Galbraith to participate in a discussion with his microeconomics students in January 1970

HARVARD UNIVERSITY

Stephen A. Marglin
Professor of Economics

1737 Cambridge Street, Room 410
Cambridge, Massachusetts 02138
(617) 868-7600 Ext. 3759

December 19, 1969

Professor J. Kenneth Galbraith
Littauer Center 207
Harvard University
Cambridge, Mass. 02138

Dear Ken:

The “confrontation” you kindly agreed to participate in for the benefit of Ec 20 and Ec 21 students has been fixed for Friday January 9, 1970 2-4 PM, in Emerson 105. In addition to yourself Ken Arrow and Herb Gintis have agreed to participate. Bob Dorfman, who teaches Ec 21, has agreed to help guide the discussion.

The meeting will rely heavily on students’ questions, but not completely. To get the ball rolling, I am working with my section-men to prepare questions that they will ask in the beginning. These will hopefully elicit from each of your short statements on the issues we believe to be most important. I expect these questions and your answers will occupy the first 45 minutes or so of the meeting, with the rest of the time for the students.

I am enclosing a copy of the reading list to give you an idea of the scope and depth of the course. I appreciate very much your willingness to participate in this meeting. I expect it will be extremely worthwhile for my students, the teaching fellows, and for me personally.

Yours sincerely,
[Signed: “Steve”]
Stephen A. Marglin

cc: Robert Dorfman
SM:lw
(enclosure)

____________________________________

Harvard University
Economics 20a
Microeconomic Theory

Fall 1969-70
Professor Marglin

Reading List I

  1. Consumption
    1. Scitovsky, Welfare and Competition, pp. 29-50
    2. Baumol, Economic Theory and Operations Analysis, (2nd edition), pp. 169-202
  2. Production
    1. Dorfman, The Price System, pp. 14-42
    2. Scitovsky, Welfare and Competition, pp. 109-147
    3. Dorfman, “Mathematical or ‘Linear’ Programing: A Nonmathematical Exposition,” reprinted in Kamerschen, Readings in Microeconomics, (abbreviated DRK henceforth), pp. 547-576
    4. Coase, “The Nature of the Firm,” reprinted in Boulding and Spivey, AEA Readings in Price Theory, (henceforth abbreviated AEA), pp. 331-351
  3. Competitive Markets
    1. Dorfman, The Price System, pp. 76-88
    2. Viner, “Cost Curves and Supply Curves,” reprinted in DRK, pp. 197-228, and in AEA, pp. 198-232
  4. Restricted Competition
    1. Sraffa, “The Laws of Returns Under Competitive Conditions,” reprinted in AEA, pp. 180-197
    2. Scitovsky, Welfare and Competition, pp. 319-337, 373-396
    3. Dorfman, The Price System, pp. 89-104
    4. Modigliani, “New Developments on the Oligopoly Front,” DRK, pp. 355-378
  5. Capital and Interest
    1. Fisher, The Theory of Interest, pp. 61-287
    2. Scitovsky, Welfare and Competition, pp. 189-216
    3. Duesenberry, Business Cycles and Economic Growth, pp. 49-133
  6. General Equilibrium
    1. Dorfman, The Price System, pp. 105-125
    2. Lange and Taylor, On the Economic Theory of Socialism, pp. 59-129
  7. Welfare
    1. Dorfman, The Price System, pp. 126-146
    2. Scitovsky, Welfare and Competition, pp. 338-370
    3. Bator, “The Simple Analytics of Welfare Economics,” reprinted in DRK, pp. 503-544
  8. Income Distribution
    1. Budd (editor), Inequality and Poverty, Introduction
    2. Locke, Second Treatise of Government, ch. 5 (“Of Property”)
    3. Clark, J.B., The Distribution of Wealth, ch. 1
    4. Budd (editor), Inequality and Poverty, Part 1, pp. 1-49
  9. Criticisms of Conventional Theory
    1. Veblen, The Theory of the Leisure Class, ch. 2, 4, and 5
    2. Galbraith, The Affluent Society, ch. 10 and 11.
    3. Berle and Means, The Modern Corporation and Private Property, Skim Book 1; read Book IV more carefully.
    4. Nordquist, “The Break up of the Maximization Principle,” reprinted in DRK pp. 278-295
    5. Veblen, “The Limitations of Marginal Utility,” reprinted in Mitchell (editor), What Veblen Taught, pp. 151-175
    6. Cohen and Cyert, Theory of the Firm, pp. 329-351
    7. Simon,” A Behavioral Model of Economic Choice,” Quarterly Journal of Economics, 1955 (omit appendix). Reprinted in Simon, Models of Man, pp. 241-256
    8. Friedman, Capitalism and Freedom, pp. 1-36, 108-160
    9. Schumpeter, Capitalism, Socialism, and Democracy, Part II, pp. 61-163
    10. Galbraith, The New Industrial State
    11. Baran and Sweezy, Monopoly Capital
    12. Rawls, “Distributive Justice”, pp. 58-72, 79-82

 

Source: John F. Kennedy Presidential Library. John Kenneth Galbraith Personal Papers. Series 5. Harvard University File, 1949-1990. Box 526, Folder “Harvard University Department of Economics: General Correspondence, 1967-1974 (2 of 3)”.

Image Source: Stephen A. Marglin from Harvard Crimson June 1, 2009.

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Princeton Suggested Reading Syllabus

Princeton. Microeconomic Theory. Lutz, 1949-50

 

This post includes: A typed page of course readings for Friedrich August Lutz’s Princeton economics theory course from 1949-50, transcribed from Martin Shubik‘s course notes, has been augmented with handwritten additions found scattered throughout the notes (identified in italics); several handwritten lists of readings from later during the course.

_____________________

Economics 501
Typed page of course readings, Parts I-III
[with inserts based on hand-written course notes]

THE THEORY OF VALUE
F.A. LUTZ

PART I                       THEORY OF DEMAND

Stigler: Theory of Price
Boulding: Economic Analysis
[Lerner: Ec. of control]

  1. a) Measurable Utility
    b) Indifference Curves
    c) The Controversy over Utility

a) [old theory]
Marshall Bks. 3 & 5 [+ appendix contract curve)
Wicksteed [ Ec. Vol. I ch 1&3 Vol II 1,2,3,4]
Böhm-Bawerk Bk 3 on Value
Wicksell: [Pol. Ec.] Vol 1 pt. 1
[Walras first chapters]

b) [new theory]
Hicks: Value and Capital Pt. I [1-50]
Schultz: Theory of Measurement of Demand Chap. I
[Pareto—Manuel]
Samuelson: Foundations of Ec. Analysis Ch. 5
Friedman: The Marshallian Demand Curve J.P.E. 1949
Morgenstern: Demand Theory Reconsidered Q.J.E. 1947-1948

c) Theory of Games: V. Neumann & Morgenstern
Friedman & Savage: Choices involving Risk J.P.E. 1948

 

Consumer’s Surplus:—

Knight: Realism & Relevance in the Theory of Demand J.P.E. 1944
Henderson: Consumer’s Surplus & Compensating Variation R.E.&S. 1941
Bishop: Prof. Knight & Theory of Demand J.P.E. 1946
Samuelson: Ch. 7

Duesenberry: Income, Saving & Consumer Behaviour

See: Lerner: Econ. of Control p. 30

 

PART II          THEORY OF PRODUCTION

Carlson: Pure Theory of Production
Robinson: Economics of Imperfect Competition
Viner: Cost curves & Supply curves
Sraffa: Laws of Returns under Competitive Conditions
Pigou: Analysis of Supply E. J. 1928
Harrod:         E. J. 1931
Knight: Risk, Uncertainty & Profit Ch. 4
Lerner: Economics of Control Ch. 13

 

PART III         THEORY OF DEMAND & THEORY OF COSTS

Joan Robinson
Chamberlin
Fellner [Comp. among the few.]
[Triffin]
[Hicks: theory of monop. Eca 35]
[Kaldor: Eca 35
Ec J 35]
[Eiteman Equ of firm Q.J.E. 44-45]
[Ralph Theory of Income Distribution]
[Chamberlin: Proportionality, Divisibility, Economices of scale Q.J.E. ‘48]

PART IV         THEORY OF DISTRIBUTION

[no references listed, or next page missing]

 

________________________________

Two topics in consumer’s choice left.
[handwritten notes]

1) Consumer Surplus

  1. Marshall
  2. Hicks value & capital appendix ch II
  3. Q.J.E. 42-43 C.S.< Utility
  4. Consumer surplus R.E. 1940-41
    Henderson
  5. Knight Realism Theory of Demand 1934
  6. Bishop Reply to Knight 1946
  7. Realism and Relev J.P.E. Aug 1946
  8. Samuelson Cons. surplus

2) Measurability of Utility

  1. Frisch J.P.E. ‘33
  2. Lange The det of the Ut fn. RES Jun 34
  3. Zeuthen R.E.S. June 37
    1936-37
  4. Knight J.P.E. 1944
  5. D 6 [sic]
  6. Theory Games Ch I part 3.
  7. Vickrey Eca 1945
  8. Friedman & Savage Ut…Risk J.P.E. 1948
  9. J. N. Morgan can we measure mar ut of money Economica ‘45
  10. Samuelson R.E.S. ’37 Feb Ec. Oct 38.

________________________________

Theory of Distribution
[handwritten notes]

F. Lutz

Part I Capital Theory
Part II Keynes via M.E. of capital

 

Reading: The Austrian Theory:

Böhm-Bawerk: Positive Theory of Capital book 2, 5,6,7 [The 3 reasons for time preference in book 5 received much later attention. Lutz says that the important part of the book is capital market [see: Stigler]
Wicksell: Lectures. Section on Capital Theory
Knight: “The Quantity of Capital, the Interest Rate” J.P.E. 1936          433, 612
“Capital, Time and the Interest Rate” Economica 1934
Lutz: The Criterion of Maximum Profits in the Theory of Investment Q.J.E. Nov. 1946
Keynes: General Theory ch. 6, app. on user cost
Lutz: Interest Rate and Investment in a Dynamic Econ. AER Dec 1945 pp. 811-830
Fisher: Theory of Interest

The Hayek-Kaldor Discussion

Hayek: The Ricardo Effect (See: Profits, Interest, Invest) Economica 1942 IX N.S. pp. 127-152
Kaldor: “Prof. Hayek and the Concertina? Effect” Economica 1942
Capital Intensity and the Trade Cycle, Economica 1934

Uncertainty and Risk

Pigou: Economics of Welfare app. I
Hart: “Anticipation, Uncertainty and Dynamic Planning” in Studies in Business Administration
Knight: Risk, Uncertainty and Profit
Steindl: On Risk, Oxford Ec Papers, 1941

[random paper mentioned (Mar 2 lecture:   Preipeich? Econometrica Jan 1940]

________________________________

 

Capital Theory of F. H. Knight (based on 16 articles)
[handwritten notes]

A.E.R. Mar 1950 Theory of Profit Weston
J.P.E. 1936 F. H. Knight
Economica 1934 Capital, Time and the Interest Rate Knight
[1933 Essay in honor of G. Cassel]

 

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library, Economists’ Papers Archive. Martin Shubik Papers. Folder: “Notes, Economic Theory; Prof. F. Lutz (Fall 1949-Spring 1950).”

Image Source: Princeton University Library from The Miriam and Ira D. Wallach Division of Art, Prints and Photographs: Photography Collection, The New York Public Library. “The Library, Princeton Univ., Princeton, N. J.” New York Public Library Digital Collections. Accessed December 8, 2017.

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Chicago Suggested Reading Syllabus

Chicago. Readings for Marschak’s course on statistical applications to economics, 1946

 

 

Another jewel in the Norman M. Kaplan papers at the University of Chicago Archives are his notes from Jacob Marschak’s course “Applications of Statistics to Economics”. In this posting I have only transcribed the reading lists for the course, there is of course much more course content in Kaplan’s notes. 

A Biographical Memoir was written by Kenneth Arrow and published by the National Academy of Sciences.

___________________________

Course Announcement

  1. Applications of Statistics to Economics. Statistical testing of economic theories. Numerical estimation of demand and cost functions and other functions occurring in the theory of the firm and household, the theory of markets and the theory of national income. Estimation of economic models. Statistical prediction under conditions of changing economic structure and policy. Prereq: Econ 211, 301 or equiv. Aut: TuTh 3-5; Marschak.

 

Source:   University of Chicago. Announcements (Vol. XLVI, Number 4: May 15, 1946). The College and the Divisions, Sessions of 1946-1947, p. 222.

___________________________

First Course Reading List

ECONOMICS 314. Autumn 1946.

Recommended Readings    (First Installment)

(The material is arranged in the order of the lectures during which it is mentioned for the first time)

I

M. Ezekiel. Methods of correlation analysis. 1941. [Useful for first orientation and for practice. Does not give adequate account of (a) fundamentals of statistical logic; (b) peculiarities of statistical economics.]

T.C. Schelling. Raise profits by raising wages? Econometrica 1946, pp. 227-234. [Good formulation of a policy problem, inserting plausible numerical values of economic parameters.]

Henry Schultz. Theory and measurement of demand. 1938 [See in particular (a) the historical parts concerning Gregory King, Jerome Marshall, Letfeldt, H. L. Moore; (b) shifts of demand and supply curves treated on pp. 72-83.]

A.C. Pigou. Economics of Welfare, Appendix II, §1 (and footnote on Moore).

Elmer Working. What do statistical demand curves show? Quarterly Journal of Economics. 1927.

Ragnar Frisch. Pitfalls in the Statistical Analysis of Demand and Supply Curves. 1933.

Ragnar Frisch and B. D. Mudgett. Statistical correlation and the theory of cluster types, Journal of American Stat. Ass. 1931. [read pp. 375-381 only.]

L. Klein. Pitfalls in the statistical determination of the investment schedule. Ecometrica 1943, pp. 240-258.

J. R. Hicks. Mr. Keynes and the Classics, Econometrica. 1937.

J. Tinbergen. Statistical Testing of Business Cycle Theories, Vol. II: Business fluctuations in U.S.A. 1919-1932. League of Nations. Geneva 1937.

Paul Douglas. The Theory of Wages. 1934.

J. Marschak and W. Andrews. Random simultaneous equations and the theory of production. Econometrica 1944. (Read also the articles of Reder and of Bronfenbrenner treated in appendix 2 of the article).

___________________________

Second Course Reading List

ECONOMICS 314     Fall 1946.

BIBLIOGRAPHY, Second Installment

Production and Cost Functions.

J. Tintner. A note on the derivation of production functions from farm records. Econometrica, 1944.

Joel Dean. The Relation of Cost to Output for a Leather Belt Shop. National Bureau of Economic Research, 1941.

Joel Dean. Statistical Cost Functions of a Hosiery Mill. Journal of Business, 1941. The University of Chicago. 1941.

Joel Dean. Articles on Cost Functions in the Journal of Business, 1936, 1941, 1942.

U.S. Steel Corporation. Pamphlets and Charts submitted to the Temporary National Economic Committee; esp. Volume I Pamphlets No. 5 and No. 7, 1940.

Ragnar Frisch. The Principle of Substitution. An example of its application in the chocolate industry. Nordisk Tidskrift for Tenisk Økonomi. September 1935.

R.G.D. Allen. Mathematical Analysis for Economists. 1930. Look up the index to locate numerous references and exercises to the problem of cost and production functions.

Family Budgets and Demand Functions.

National Resources Planning Board. Consumer Expenditures 1935-1936. Washington 1939.

Allen, R. G. D., and Bowley. Family Expenditure, A Study of its variation. 1935.

J. Marschak. Personal and Collective Budget Functions. Review of Economic Statistics. 1939.

J. Marschak. Money Illusion and Demand Analysis. Review of Economic Statistics. 1943.

H. Staehle. Relative Prices and Postwar Mariets for Annual Food Products. Quarterly. Journal of Economics. February 1945.

 

[Handwritten note on back: “Lange’s Price Flexibility & Haavelmo’s Probability Approach available for sale at Cowles Comm.?”]

___________________________

Marschak’s questionnaire for students taking course

By filling out this questionnaire, you will enable the instructor to adjust the course Economics 314 to the prevailing level of the students.

U. of C. Courses
(Dept. and No.)		 Other Courses Other Training
or Experience
Economics, theoretical
Economics, descriptive
Mathematics
Theory of Statistics

Further relevant information on previous training:

 

Name three problems to exemplify the application of Statistics to Economics

 

 

Source: University of Chicago Archives. Norman M. Kaplan Papers, Box 3, Folder 3.

Image Source:  Portrait of Jacob Marschak in the Biographical Memoir “Jacob Marschak, 1898-1977” written for the National Academy of Sciences by Kenneth Arrow (1991).

 

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Harvard Suggested Reading Syllabus

Harvard. Industrial organization. Reading List, Kaysen and Peck, 1955

 

I have had the enormous good fortune of having excellent mentors during the course of my own economics education. The first was Professor Merton J. Peck who taught the double credit course “Early Concentration Economics” during the fall semester of my freshman year at Yale (1969-70). He liked a paper I wrote enough to show it to his colleague James Tobin who thought it was good enough to be written by a graduate student, or at least so I was told. With such a boost to my self-esteem, how could I not have continued in economics?

Mr. Peck (at Yale professors are addressed without the honorific “Professor”) offered me a job to be his bursary boy, a 10 hour a week student assistantship, with a variety of tasks spanning photocopying articles and chapters to editing his rough drafts (what humility, allowing a sophomore/junior at Yale to improve his writing!) When I complained to Mr. Peck once that there was no course in the History of Economics at Yale at that time, he told me to give “Willy Fellner” a call. That led to my second Yale mentor and the beginning of my education in the history of economics (a two semester tutorial reading economic classics). There were two major projects that Mr. Peck was working on during my years working for him: on industrial/technological policy in Japan for a Brookings book Asia’s New Giant and Economic Aspects of Television Regulation (with Roger Noll and John McGowan). 

Incidentally, in Robert Litan’s book (Trillion Dollar Economists, p. 103) I discovered to my delight that my mentor had spotted the talent in the young Frank Fisher and forwarded Fisher’s undergraduate paper to his colleague Carl Kaysen. 

As I was looking at my collection of syllabi from Harvard this evening, I spotted the course below co-taught by Carl Kaysen and Merton J. Peck. This syllabus is my first tribute to the memory of my mentor Joe Peck. I have appended his official Yale obituary. He is also of interest for my project on graduate education, having received a Harvard Ph.D. (1954).

_______________________________

HARVARD UNIVERSITY
Department of Economics
Spring Term 1955

Economics 161
Professor Kaysen and Dr. Peck

 

  1. Markets of Large Numbers (2 Feb. – 28 Feb.)

General introduction
Agriculture
Crude oil
Women’s clothing

R. Schickele, Agricultural Policy, Ch. 9-11, 13-17.
J.K. Galbraith, Basic Factors in Farm Price Policy (mimeo.)
K. Brandt, Farm Price Supports, Rigid or Flexible?
N. Ely, “The Conservation of Oil,” Ch. 11 in Readings in the Social Control of Industry.
E.V. Rostow, A National Policy for the Oil Industry, Part II.
“Adam Smith on 7th Avenue,” Fortune, Jan. 1949.

 

  1. The Regulated Industries (2 March – 30 March)

Electric Power
Transportation

Twentieth Century Fund: Electric Power and Government Policy, Ch. I-IV, X
M.L. Fair and E.W. Williams, Jr., Economics of Transportation, Ch. 18-23, 25, 30, 32.

  1. Economic Mobilization (11 April – 18 April)

D.H. Wallace and L.V. Chandler, Economic Mobilization and Stabilization, Ch. 1-5, 23-26.

 

  1. Nationalization and Planning (20 April – 27 April)

J.E. Meade, Planning and the Price Mechanism.
R.W. Lewis, British Planning and Nationalization, Ch. 1-3.
H.A. Clegg and F.E. Chester, The Future of Nationalization, Ch. 1, 3.

 

Reading Period

A.A. Berle, 20th Century Capitalist Revolution.

 

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

_______________________________

In memoriam: Merton Joseph Peck

YaleNews, March 6, 2013

Merton Joseph Peck, the Thomas DeWitt Cuyler Professor Emeritus of Economics, died March 1, at age 87. He resided in Florida and had been ailing for quite some time, according to his family.

Peck was a specialist in industrial organization, and wrote on a variety of topics including the aluminum industry, transportation, the defense industries, and cable and television. He also wrote about the transition to a market economy in the Soviet Union, as well as technological change.

He served in the U.S. Defense Department under Robert McNamara 1961–1963 as director of systems analysis, and he was designated by Time Magazine as one of the “Pentagon Whiz Kids” in 1962. Peck returned to Washington in 1968 to serve on Lyndon Johnson’s Council of Economic Advisors.

At Yale he served as department chair in various years throughout the 1960s, 1970s and 1980s, setting a record for number of years in that post. He also served as director of graduate studies, director of undergraduate studies, and acting dean of the Yale School of Management. He was a fellow of Pierson College at Yale.

Peck was born in Cleveland, Ohio, in 1925. Much of his very early youth was spent in Germany and Strasbourg in Alsace France. His father, Kenneth Peck, was head of European production for American Rake and Hoe. Both his parents died before he was 12, and he was subsequently raised by his aunts and grandmother in various small towns in Ohio. During World War II, Peck served in the Army Signal Corp and participated in the occupation of Japan. After leaving the army, he attended Oberlin College and graduated in 1949. He received his Ph.D. in economics from Harvard University in 1954 under the tutelage of Edward Mason.

Peck taught at Michigan (1955-1956) and Harvard (1956-1962) before coming to Yale, where he served on the faculty 1963–2002. He was also associated with the Rand Corporation and Brookings Institution.

He is survived by his children Richard, Katherine, Sarah, and David; and four grandchildren. His wife of 55 years, Mary Bosworth Peck, predeceased him in 2004.

Source:  YaleNews, March 6, 2013.

Image Source:  ditto.

Categories
Exam Questions Suggested Reading Syllabus Tufts

Tufts/Fletcher. International Economics, Readings and Final Exam. Samuelson, 1944

 

 

During the mid-1940s Paul Samuelson regularly taught courses at Tufts University in international economics and policy. Transcribed below are two reading lists and a final exam from the second term of the 1943-44 academic year. All the material comes from a single folder but at least the sections of the reading lists match well the exam questions for international economics so we can be reasonably sure that they belong together for Samuelson’s course at the Fletcher School. Unlike international economics courses today that typically start with real trade theory and commercial policy and then move on to international monetary/macroeconomics, the sequence in this course was clearly reversed. Also interesting to note that the first reading list here is nearly identical to that from M.I.T. from February 1943.

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READING LIST
January, 1944
P. A. Samuelson

Asterisks indicate required reading, other items suggested reading.

  1. NATIONAL INCOME, EMPLOYMENT & PRODUCTION

M. Gilbert, “War Expenditures & National Production,” Survey of Current Business, March, 1942.
S. S. Kuznets, National Income & Its Composition, 1919-1938, Vol. I.
W. L. Crum, J. F. Fennelly, L. J. Seltzer, Fiscal Planning for Total War.
S. Fabricant, Productivity of American Manufacturing Industries.
Federal Reserve Board Bulletin, August & September, 1940.
R. A. Nixon & P. A. Samuelson, “Estimates of Unemployment in the U. S.,” Review of Economic Statistics, August, 1940.

  1. NATURE OF BUSINESS CYCLE

(*) A. H. Hansen, Fiscal Policy & Business Cycles, Ch. 1-4.
(*) Wesley C. Mitchell, Business Cycles, 1941 Reprint of 1913 Edition, Ch. V, Part I.
(*) J. P. Wernette, The Control of Business Cycles, pp. 3-23 and Conclusion.
(*) J. R. Meade & H. Hitch, Economic Analysis & Policy, Ch. I.
(*) G. Haberler, Prosperity & Depression, Ch. IX, I & II.
(*) S. H. Slichter, Towards Stability, Ch. I.
A. H. Hansen, Business Cycle Theory, Chs. I, II, IV, & VI.
S. H. Slichter, Towards Stability, Chs. II & IV.
G. Haberler, Prosperity & Depression, any part, especially Ch. 8.
S. Harris, Postwar Economic Problems, Chs. by Hansen, Samuelson, Bissell and Kindleberger.

  1. SAVING AND INVESMENT

(*) Joan Robinson, Introduction to the Theory of Employment.
(*) T.N.E.C. testimony of Hansen and Currie.
(*) A. H. Hansen, Fiscal Policy, Chs. 11, 12, 15 & 24.
(*) L. V. Chandler, Introduction to Monetary Theory, Chs. VI & VII.
O. Altman, T.N.E.C. Monograph #37, Saving & Investment.

  1. THE PROPENSITY TO IMPORT & THE FOREIGN TRADE MULTIPLIER

(*) R. F. Harrod, International Economics, (Rev. Ed.) Ch. 6, 7, (8 & 9 optional).
(*) W. A. Salant, “Foreign Trade Policy in the Business Cycle,” in Public Policy II (editor E. S. Mason).
(*) J. M. Keynes, General Theory, Preface, Chs. 23 & 24.
(*) F. Machlup, International Trade & the National Income Multiplier, Chs. I-IV, IX.
I. DeVegh, Review of Economic Statistics, 1940.
C. Clark & J. Crawford, National Income of Australia.
L. Metzler, Journal of Political Economy, 1942.

  1. INTERNATIONAL PROPAGATION OF BUSINESS CYCLES

(*) G. Haberler, Prosperity & Depression, Ch. XII, pp. 455-473.
(*) J. Viner, Studies, pp. 432-436.
(*) League of Nations, Annual Survey, 1939-40.
(*) Sir A. Salter, Recovery, pp. 27-66, (101-195 optional).
R. Bennett, National Bureau, manuscript.
P. Einzig, Bankers, Statesmen & Economists.
League of Nations, B. Ohlin, Course & Phases of the World Economic Depression, especially pp. 116-215.
O. Morgenstern, Journal of Political Economy, August, 1943, “On the International Spread of Business Cycles.”

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[Handwritten note: “Fletcher”]

INTERNATIONAL ECONOMICS
Reading List
March, 1944

  1. Mercantilism

Viner, Studies, Chs. I and II.
E. F. Heckscher, Mercantilism, Vol. I, Introduction, Vol. II, Chs. I and II of Part II.
A. Smith, Wealth of Nations, Book IV, Chs. I and II, Introduction, and glance through Ch. VIII.

  1. Tariffs and Import Quotas

G. Haberler, Theory of International Trade, pp. 169-174, and Chs. XV, XVI, XVII, XX, XXI.
F.W. Taussig, Some Aspects of the Tariff Question, Part I and one other part of your own choosing.
Sir W. Beveridge and others, Tariffs: The Case Examined, Chs. II-XI.
H. Heuser, Control of International Trade, Chs. I, II, V, VII, VIII, IX, X, XII, and pp. 150-151, 155-156, 158-159, 161-162.

  1. Exchange Control and Trade Agreements

P. Einzig, Exchange Control, Chs. I, II, VII, X, XI, XII, XIII, XVIII.
P. Einzig, Economic Warfare, Chs. VI, IX, X, XI.
H. S. Ellis, Exchange Control in Central Europe, Chs. I, IV, V.
Hearings before the Ways and Means Committee on Extension of Reciprocal Trade Agreements Act, 76th Congress, 3rd Session, H.J. Res. 407 (Washington: U.S. Government Printing Office, 1940), Vol. I. Go through testimony of Hull (4-15, 31-33), Wallace (116-122, 125, 142-143), Noble (169-171), Fox (491-503), Grady (713-750, 899-910) and anything else that interests you.

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ECONOMICS 1
Final Examination
May 18, 1944
Professor Samuelson

3 hours
Answer 3 out of 4 questions

  1. To what extent has the business cycle been international? Discuss the mechanisms whereby the cycle may be transmitted between countries.
  2. Analyze the pros and cons of one of the advantages claimed for the tariff, with specific reference to some American industry.
  3. Describe the successive steps by which a country extends exchange control. What problems is each designed to meet?
  4. Bring to bear the tools of analysis developed in this course upon some anticipated postwar problem of international economic relations.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Paul Samuelson Papers, 1930s-2009, Box 33, Folder “Fletcher School of Law and Diplomacy, 1944-1947”.

Image Source:  Paul Samuelson faculty photo in MIT Technique 1950.

Categories
Exam Questions M.I.T. Suggested Reading Syllabus

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

 

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

  1. The student should buy J. M. Keynes, General Theory of Employment, Money and Interest; and if possible, G. Haberler, Prosperity and Depression (3rd revised edition).
  2. 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, 3rd 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

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

 

15 minutes

  1. Define in a paragraph or less:

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

 

15 minutes

  1. 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 20th century (1900-27) 2. sunspots and weather
C. 19th 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

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

 

15 minutes

  1. 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.

 

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Exam Questions Harvard Suggested Reading Syllabus

Harvard. Graduate Core Economic Theory, Readings and Exams. Schumpeter, 1936-37

 

The reading lists and exams for Schumpeter’s graduate economic theory course in 1935-36 have been posted earlier (the year Paul Samuelson took the course). It is worth noting that Keynes and the General Theory (at least Chapters 11, 13-16) were added to the readings for the second term of 1936-37.

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Course Announcement, 1936-37

Economics 101 (formerly 11). Economic Theory

Mon., Wed., Fri., at 2. Professor Schumpeter.

Source:  Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1936-37 (first edition). Official Register of Harvard University, Vol. XXXIII, No. 5 (March 2, 1936), p. 142.

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Course Enrollment, 1936-37

Primarily for Graduates:

[Economics] 101. (formerly 11). Professor Schumpeter.–Economic Theory.

Total 36:  30 Graduates, 3 Seniors, 3 Radcliffe.

Source: Harvard University. Report of the President of Harvard College for 1936-1937, p. 93.

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Economics 101

Following is a list of some of the most important works in English dealing with problems outside the range of perfect competition. They are not all assigned, but assigned reading is taken altogether from this list.

Pigou, A. C., Economics of Welfare, 3rd Edition.
Chamberlin, E. H., The Theory of Monopolistic Competition.
Chamberlin, E. H., On Imperfect Competition, in the March, 1934 Supplement of The American Economic Review, pp. 23-27.
Robinson, Joan, Economics of Imperfect Competition.
Robinson, Joan, What is Perfect Competition, Q. J. E., Nov. 1934.
Zeuthen, F., Problems of Monopoly and Economic Warfare.
Cournot, A. A., Mathematical Principles of the Theory of Wealth.
Edgeworth, F. Y., The Pure Theory of Monopoly (Papers, Vol. I)
Hotelling, Harold, Stability in Competition, E. J., March 1929.
Shove, G. F., The Imperfection of the Market, E. J., March 1933.
Harrod, R. F., Doctrines of Imperfect Competition, Q. J. E., May 1934.
Hicks, J. R., The Theory of Monopoly, Econometrica, Jan. 1935.

The subjects, in the order in which they will be taken up, together with the assigned reading, are given below.

I.  The Technique and the Background.

Pigou, Part II, Ch. XIV.
Robinson, Chs. 1, 2.
Chamberlin, Chs. 1, 2.

  

V. Monopolistic Competition

Chamberlin, Chs. 4, 5, 6, 7.
Robinson, Ch. 7. Q.J.E., Nov. ‘34
Shove, E.J., March ’33.
Harrod, Q.J.E., May ’34.
II.  Simple Monopoly.

Pigou, Part II, Ch. XVI.
Robinson, Chs. 3, 4, 5.

 VI. Discrimination.

Pigou, Chs. XVII, XVIII (Part II).
Robinson, Chs. 15, 16.
III.  Duopoly and Oligopoly

Pigou, Part II, Ch. XV.
Chamberlin, Ch. 3.

  
IV. Bilateral Monopoly.

Hicks, Sect. 3.

  

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

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[Hand-written notes, neat, presumably to be typed]

  1. On Substitution

Marshall, V., Chs. 4, 8; VI, Ch.1.
Hicks, Theory of Wages, Ch. 6.
Robinson, Imperfect Competition, Ch. 22.
Machlup, “Commonsense of the Elast. of Subst.”, Rev. Econ. Stud., Vol II, No. 3. (on Econ. 1 shelf)

More Advanced

Hicks, Appendix.
Various notes on elast. of subs. In Vols I and II, Rev. Econ. Stud., by Hicks, Lerner, Kahn, Tarshis etc.
Hicks, Rev. Econ. Stud. Oct., 1936.
Pigou, Econ. Journal, June, 1934.

  1. On Period of Production

Böhm-Bawerk, E., Positive Theory of Capital, Bk II, Ch. 2, 3.
Knight, F. H., “Capital, Time + the Interest Rate,” Economica, August 1934 (on Econ. 151 shelf)
Hayek, F. A., Q. J. E., Feb., ‘36
Machlup, F. “Professor Knight + the Period of Production,” J. P. E., Oct. 1935.

More Advanced

Gifford, C.H.P., Econometrica, April 1935 (in Econ. 102 shelf).

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

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1936-37
HARVARD UNIVERSITY
ECONOMICS 101

(Answer any FIVE questions)

  1. What meaning can be attributed to
    1. Positively inclined demand curves?
    2. Negatively inclined long-run average cost curves?
  2. Define arc elasticity of demand and explain the usefulness or otherwise of the concept.
  3. From given demand curves for consumers’ goods we derive demand curves for the producers’ goods or factors of production. From these in turn we derive the prices of factors and hence incomes. And these incomes determine the demand curves for consumers’ goods. Does this involve circular reasoning?
  4. Why is the explanation of market price by means of the theory of marginal utility superior to the explanation of market price by means of the Ricardian theory of quantity of labor?
  5. Consider a commodity A which is the product of two factors of production B and C. Then “an increase in the supply of A raises the demand for B in terms of money if the elasticity of the demand for A is greater than the elasticity of substitution.” Prove.
  6. Show why and in what sense price is determinate in the case of bilateral monopoly.
  7. “Perfect competition exists to such a negligible extent in the modern economy that all theorizing based on this assumption must be regarded as sheer waste of time.” What have you to say to this?
  8. “The key to problems of imperfect competition lies in the conditions of demand. But it is precisely when we come to problems of imperfect competition that the ordinary demand curve apparatus ceases to have any clear meaning.” Comment.

Mid-Year. 1937.

 

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 9, Folder “Ec 11, Fall 1936”.

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ECONOMICS 101 [“37” is handwritten here]

The first month of the second term will be devoted to a study of the principles underlying the theory of distribution, with special emphasis on wages.

  1. Substitution and Relative Shares
    1. Hicks, J. R., The Theory of Wages, Ch. VI.
    2. Machlup, Fritz, “The Common Sense of the Elasticity of Substitution”, Review of Economic Studies, June, 1935.
    3. Hicks, J. R., “Distribution and Economic Progress: A Revised Version”, Review of Economic Studies, October, 1936.
    4. Also notes and articles on substitution and relative shares in Review of Economic Studies, Vol. I, Nos. 1 and 2, though not required reading, may be consulted.
  2. Theory of Wages and Marginal Productivity
    1. Marshall, Bk. VI, especially Ch. I.
    2. Hicks, J. R., Theory of Wages, Ch. I.
    3. ——-, Marginal Productivity and the Principle of Variation,” Economica, February, 1932.
    4. Schultz, Henry and Hicks, J. R., “Marginal Productivity and the Lausanne School: “A Reply” and “A Rejoinder”, Economica, August, 1932.
    5. Robertson, D. H., “Wage Grumbles” in the volume of essays entitled Economic Fragments.
    6. Chamberlin, E. H., On distribution under Imperfect Competition, pp. 23-27 of the Supplement to the American Economic Review, March, 1934.

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

__________________________

 ECONOMICS 101

            The next two or three weeks will be devoted to the discussion of capital and interest. A select bibliography and the assigned reading are listed below.

BIBLIOGRAPHY

  1. Böhm-Bawerk, E., Capital and Interest (a history of interest theories) [: and] The Positive Theory of Capital (the third edition, available only in German, containing the polemical Excursi, is to be preferred to the English translation)
  2. Marx, Karl, Capital (especially Vol. I, Parts III and VII; Vol. II, Part III; Vol. III, Parts II and III)
  3. Wicksell, Knut, Über Wert, Kapital und Rente [, and] Lectures on Political Economy, Vol. I
  4. Fisher, Irving, The Rate of Interest (1907) [; and] The Theory of Interest (1930) (a rewriting of the earlier work)
  5. Taussig, F.W., Wages and Capital
  6. Knight, F.H., “Interest”, article in The Encyc. of Soc. Science
  7. For a rather complete list of the numerous recent articles on capital, interest and the structure of production, Cf. Machlup, Fritz, “Professor Knight and the Period of Production”, Journal of Political Economy, 1935, first footnote.
  8. For an exposition of Böhm-Bawerk, Wicksell and the later work along the same lines done in Sweden, particularly by Gustav Akerman, Cf. Kirchmann, Hans, Studien zur Grenzproduktivitätstheorie des Kapitalzinses.
  9. Keynes, J. M., General Theory of Employment, Interest, and Money.

ASSIGNED READING

  1. Fisher, The Rate of Interest, Part I, Chs. 1,2,3; Part III, Ch. 10
  2. Böhm-Bawerk, Positive Theory, Book I, Ch. 2; Book II, Chs. 2,4,5; Book V, Chs. 1,2,3,4,5; Book VI, Chs. 5,6,7; Book VII, Chs. 1,2,3.
  3. Wicksell, Lectures, Vol. I, pp. 144-171; 185-195.
  4. Keynes, J. M., General Theory of Employment, Interest, and Money, 11, 13, 14, 15, 16.

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

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1936-37
HARVARD UNIVERSITY
ECONOMICS 101

Answer FIVE questions. Arrange your answers in the order of the questions.

  1. Saving, by increasing the quantity of capital, will tend to increase its absolute and relative share. At the same time saving will tend to reduce the rate of interest and thereby to decrease capital’s absolute and relative share. State the conditions on which the net effect of saving on the absolute and relative share will depend. What do you think the actual effect is in practice?
  2. Classical economists spoke of a net benefit accruing from free trade. Have we any means to measure that benefit and to determine how it is divided between the trading nations?
  3. Which of the theories of interest which you have studied seems to you most acceptable and why?
  4. What warrant is there for the statement that in perfect competition and perfect equilibrium every firm will produce that quantity which corresponds to the point of minimum average cost?
  5. Discuss the problem of inequality of incomes from the following points of view: (a) measurement, (b) economic effects, (c) relation to welfare.
  6. Could unemployment exist with perfect competition?
  7. What do you regard as the most desirable railroad rate policy? State clearly and justify your criteria of desirability, and show how the policy selected meets these criteria.

Final. 1937.

 

Source: Harvard University Archives. Joseph Schumpeter Papers. Lecture Notes. Box 10, Folder “Ec 11, Spring 1937”.

Image Source: Harvard University Archives. HUGBS 276.90p(43) Irving Fisher and J. A. Schumpeter (May 12, 1934).

Categories
M.I.T. Suggested Reading Syllabus

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

 

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).

See also INVESTMENT DECISIONS.

 

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 6th 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.

  1. [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]

  1. [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]
  2. [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.”
  3. [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.

  1. (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.

  1. “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.

  1. (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.

  1. (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)).

  1. 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?

  1. (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.

Categories
Exam Questions M.I.T. Suggested Reading Syllabus

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

 

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

  1. 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.)

  1. 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.

  1. 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

  1. 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.

  1. 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.

  1. 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]

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

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First Examination     14.452           April 13, 1966

  1. 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.)
  2. 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)?
  3. 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 .