In a previous posting I provided the reading lists for the two term graduate course “Economic Theory I” , Economics 201, taught by Edward Chamberlin in 1947-48. “Economic Theory II”, Economics 202a and 202b, was taught by Wassily Leontief. Presuming a student who took both courses would have done this in consecutive years, I provide the course outlines, reading lists and the exam questions (only for Economics 202a) for the year 1948-49.
Leontief apparently did not get around to covering Part IV of Economics 202a in the Fall Term, since the entire section can be seen repeated for the first topic of the Spring term.
Besides Chamberlin’s course Economics 201 just mentioned. It is interesting to compare Leontief’s course with that of Lloyd Metzler and that of Milton Friedman at Chicago also in the same year.
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Economics 202a
Fall Term 1948-49
Economics 202a will cover the Theory of a Firm, the Theory of Individual Demand, Theory of Market Relationships, and introduce the basic concepts of the General Equilibrium Theory. 202b, as given in the Spring Term, will cover the Theory of Distribution (wages, capital and interest), profits), the Theory of General Equilibrium (Keynes), and introduce the basic concept of Welfare Economics and Economic Dynamics.
I. Theory of a Firm
Costs; total, average, marginal.
Theory of the multiple plant firm.
Revenue; total, average, marginal.
Long and short run analysis
Supply under competitive and monopolistic conditions.
Production function, marginal productivity, increasing and decreasing returns.
Joint products.
Demand for factors of production.
Discontinuous relationships and non-marginal analysis.
Internal and external economies.
New invention and technological change.
Reading assignments:
Oscar Lange, “The Scope and Method of Economics,” Review of Economic Studies, Vol. XIII, (i), 1945-46, pp. 19-32.
E. A. G. Robinson, Structure of Competitive Industry, Chs. II, VII, VIII, pp. 14-35, 107-133.
Boulding, Economic Analysis, Part II, Chs. 18-26, pp. 375-595 (New edition: Chs. 20-26, pp. 419-552; Chs. 31, 32, pp. 669-733).
I. Fisher, “A Three-Dimensional Representation of the Factors of Production and Their Remuneration Marginally and Residually,” Econometrica, October, 1939.
George Stigler, “Production and Distribution in the Short Run,” Journal of Political Economy, 1939, pp. 305-327. Reprinted in Readings in the Theory of Income Distribution, pp. 119-142.
Joe S. Bain, The Economics of the Pacific Coast Petroleum Industry, Part I, Ch. V, pp. 84-114.
Lerner, Economics of Control, Chs. 15, 16, 17, pp. 174-211.
Chamberlin, “Proportionality, Divisibility, and Economies of Scale,” Quarterly Journal of Economics, February, 1948, pp. 229-262.
National Bureau of Economic Research, Cost Behavior and Price Policy, Ch. VII, pp. 142-169; Appendix C, pp. 321-329.
II. Theory of the Household:
Theory of utility and indifference lines analysis.
Individual demand, prices and income.
Dependent and independent, competing and complementary, superior and inferior goods.
Measurability of utility.
“Marginal utility of money.”
Consumer surplus.
Interpersonal interdependence in consumers’ behavior.
Economic theory of index numbers.
Reading assignments:
Hicks, Value and Capital, Part I, Chs. I-III, pp. 1-54.
Boulding, Economic Analysis, Chs. 29, 30; pp. 636-685. (New edition, Chs. 33, 34; pp. 734-759).
III. Theory of Market Relationships:
Pure competition; individual and market supply and demand curves.
Stability of market equilibrium, statics and dynamics.
Monopoly and price discrimination.
Monopolistic competition.
Duopoly, oligopoly, bilateral monopoly, etc.
“Theory of games.”
Reading assignments:
Marshall, Principles of Political Economy [sic], Book V, Chs. III, V.
Chamberlin, The Theory of Monopolistic Competition, Chs. II, III, IV, and V.
Joan Robinson, The Economics of Imperfect Competition, Chs. 15 and 16.
Robert Triffin, Monopolistic Competition and the General Equilibrium Theory, Chs. I and II.
W. H. Nicholls, Imperfect Competition within Agricultural Industries, Ch. 18.
One of the following three articles:
Leonid Hurwicz, “The Theory of Economic Behavior,” American Economic Review, December, 1945, pp. 909-925.
Carl Kaysen, “A Revolution in Economic Theory?” The Review of Economic Studies, Vol. XIV (I), 1946-47, p. 1-15.
Jakob Marschak, “Theory of Games,” Journal of Political Economy, April, 1946, pp. 97-115.
IV. Basic concepts of a general equilibrium theory:
Data and variables.
Price system and general interdependence.
Linear model of a general equilibrium system.
Reading assignments:
Lange, The Economic Theory of Socialism, pp. 65-72.
Cassel, The Theory of Social Economy, Vol. I, Ch. IV, pp. 134-155.
E. H. Phelps Brown, Framework of the Pricing System, in particular chapters dealing with general equilibrium theory.
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DEPARTMENT OF ECONOMICS
Reading Period Assignments
January 3—January 19, 1949
[…]
Economics 202: Howard S. Ellis, Editor, A Survey of Contemporary Economics, 1948, Ch. 1, Value and Distribution, by Bernard F. Haley; and Frank H. Knight, Risk, Uncertainty and Profit, Ch. III to X, incl.
[…]
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1948-49
HARVARD UNIVERSITY
ECONOMICS 202a
[Final Exam, first term]
Please write legibly
Answer four questions:
- Taking into account considerations suggested by Stigler in his article on “Production and Distribution in the Short Run,” describe the determination of the optimum investment in fixed equipment for a plant faced with a regular seasonal variation in output.
Give an illustrative example. - Given information about (a) changing factor prices, and (b) changing factor combinations used by an individual enterprise (operating under competitive conditions) over a certain period of time—
explain under what conditions this information might definitely indicate the presence of genuine technological change as contrasted with passive adjustment to variable market conditions. - Under what conditions could one measure the utility of alternative combinations of commodities consumed by an individual household?
Describe in detail the process of measurement in the case where these conditions are satisfied. - “A market characterized by duopolistic indeterminism can be stabilized through establishment of an official price ceiling enforced by some outside authority.” Comment.
- State what significant difference do you see between the theory of an individual firm as presented in Knight’s “Risk, Uncertainty and Profits” and the treatment of the same subject in the most recent literature as presented in Haley’s article on value and distribution in the “Survey of Contemporary Economics.”
Final. January, 1949.
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Economics 202b
Spring Term, 1949
Part I: General Equilibrium Theory and the Economics of Welfare
a. Basic Concepts of a General Equilibrium Theory:
Data and variables. Price System and general interdependence. Linear model of a general equilibrium system.
Reading:
Lange, The Economic Theory of Socialism, pp. 65-72.
Cassel, The Theory of Social Economy, Vol. I, Ch. IV, pp. 134-155.
E. H. Phelps Brown, Framework of the Pricing System, in particular chapters dealing with general equilibrium theory.
Schultz, T. W.: Agriculture in an Unstable Economy, Ch. I, pp. 24-43, Ch. IV, pp. 134-153.
b. Economics of Welfare
Individual maximum and social welfare. Efficiency and distributive justice. Efficiency of the purely competitive system. Monopoly and economic welfare. External economies. Pricing and allocation for public enterprise.
Reading:
Hicks, J. R. : “The Foundation of Welfare Economics,” Economic Journal, December 1939, pp. 696-712.
Meade and Hitch: An Introduction to Economic Analysis and Policy, Part II, Chs. VI-VII, pp. 159-220.
Meade, J. E., and Fleming, J. M.: Price and Output Policy of State Enterprise,” Economic Journal, Vol. LIV, December 1944, pp. 321-339.
Coase, R. H.: “Note on Price and Output Policy,” Economic Journal, Vol. LV, April 1945, pp. 112-113.
Part II: The Theory of Distribution
[a. The Theory of Wages. Omitted this year.]
Demands for labor and methods of remuneration. Short run supply of labor, money and real wages. Theory of noncompetitive labor markets. Technological unemployment. Long run supply of labor and the theory of optimum population.
Reading:
Douglas, P. M.: The Theory of Wages, Ch. I, pp. 3-17; Ch. III, pp. 68-96.
Robinson, G. B. H.: Economic Fragments, “Wage Grumbles,” pp. 42-57, also reprinted in Readings in the Theory of Income Distribution.
Marx, Karl: Capital, Vol. I, Part IV, Ch. XV, pp. 405-422, 466-488.
Robbins, L.: “On the Elasticity of Demand for Income in Terms of Effort,” Economica, Vol. X, 1930, pp. 123-129.
b. Theory of Interest
Productivity of Capital. Expectations, risk, and uncertainty. Inventory speculation. Interest as cost and the demand for capital. Saving and the supply of capital. Monetary theory of interest. Theory of assets.
Reading:
Irving Fisher: The Theory of Interest, Chs. VII, VIII, IX, X, XI, XVI, XVII, and XVIII. 1930.
Readings in the Theory of Income Distribution (Blakiston, 1946)
F. Knight: “Capital and Interest,” pp. 384-417.
Keynes: “The Theory of the Rate of Interest,” pp. 418-424.
D. H. Robertson: “Mr. Keynes and the Rate of Interest,” pp. 425-460.
[c. Theory of Profits and of Rent. Omitted this year.]
Theory of residual income. Entrepreneurial function. “Normal Profits.”
Reading:
Beddy, James: Profits, Ch. X, “An Explanation of Profits,” pp. 216-266.
Crum, W. L: “Corporate Earnings on Invested Capital,” Harvard Business Review, XVI, 1938, pp. 336-350.
Kaldor, N.: “The Equilibrium of the Firm,” The Economic Journal, March 1934, pp. 60-76.
Robinson, Joan: Economics of Imperfect Competition, Ch. 8.
Part III: Capital and Economic Development
a. Capital and Income
National wealth: Stock and flow concepts. Dollar measures and physical measures. Capital and income. Capital in production. Depreciation and obsolescence. Period of production and the speed of turnover. The time shape of production and consumption process.
Reading:
Kuznets: “On Measurement of National Wealth,” Studies in Income and Wealth, Vol. 2, National Bureau of Economic Research, 1936, pp. 3-61.
Rae, John: New Principles of Political Economy, 1834, Chs. I-V.
Irving Fisher: Nature of Capital and Income, Chs. I, IV, V, XIV, XVII, Macmillan, 1906.
Kaldor: “Annual Survey of Economic Theory: The Recent Controversy on The Theory of Capital,” Econometrica, July 1937, pp. 201-233.
b. Economic Development and Accumulation of Capital
Statics and Dynamics. The general problem of economic growth. Saving, Investment and the growth of income. Acceleration principle. Technical change. Accumulation and employment.
Reading:
Bresciani-Turoni: “The Theory of Saving,” Economica; Part I, February 1936, pp. 1-23; Part II, May 1936, pp. 162-181.
Domar: Expansion and Employment,” American Economic Review, March 1947, pp. 34-55.
Schelling: “Capital Growth and Equilibrium,” American Economic Review, December 1947, pp. 864-876.
Harrod: “An Essay in Dynamic Theory,” Economic Journal, March 1939, pp. 14-33.
Pigou: Economic Progress in a Stable Economy,” Economica, August 1947, pp. 180-188.
Stern: “Capital Requirements in Progressive Economies,” Economica, August 1945, pp. 163-171.
A. Sweezy: “Secular Stagnation?” in Harris, Postwar Economic Problems, McGraw-Hill, New York, 1943, pp. 67-82.
Hansen: “Economic Progress and Declining Population Growth,” American Economic Review, March 1939, pp. 1-15.
Part IV: Keynesian Theory and Problems
a. Over-all outlines of the General Theory. Wage and price “stickiness.” Demand for money. Saving and “oversaving.” Multiplier principle.
Reading:
Lerner, A. P.: The Economics of Control, Chs. 21, 22, and 25.
Keynes, J. M.: General Theory of Employment, Interest and Money, Chs. 1, 2, 8, and 18.
Haberler, G.: Prosperity and Depression, Ch. 8.
Reading Period:
Schumpeter: Theory of Economic Development, Harvard University Press, 1936.
OR
Harrod, R. F.: Towards a Dynamic Economics, Macmillan, 1948.
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Sources:
Harvard University Archives. HUC 8522.2.1 Box 4, Folder: “Syllabi, course outlines and reading lists in Economics, 1948-1949 (2 of 2)
Wassily Leontief Papers, Harvard University Archives. HUG 4517.45, Box 2, Folder “Fall to Winter—202a ‘48-‘49”.
Image Source: Harvard Album, 1949.