Tag: Diamond

M.I.T. Graduate Program in Economics Brochure, 1974-1975

Post author By Irwin Collier
Post date 2024-08-06

It was fifty years ago this September that I entered the graduate program in economics at M.I.T. This is why the brochure outlining the graduate program as of the academic year 1974-75 is something I am particularly delighted to add as the newest digitized artifact to Economics in the Rear-view Mirror.

In other news, I just realized that I am now older than everyone seen on the faculty portrait taken in 1976.

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Most of the faculty members of the MIT department of economics on the steps of the Sloan Building (E52) in 1976.

Names of the assembled have been provided in an earlier post.

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MIT’s 1961 graduate economics brochure has been transcribed and posted earlier.

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MASSACHUSETTS INSTITUTE OF TECHNOLOGY
The Graduate Program in Economics
1974 – 1975

General Information
The Ph.D. Program in Detail

Schematic Schedule of Typical Entering Student

1. Dissertation
Graduate Subjects in Economics
The Faculty in Economics

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
The Graduate Program in Economics
1974–75

1. General Information
  [Table of Contents]

Graduate study in economics began at M.I.T. in 1941 and has since developed to its present size of some 110 full-time students and 33 faculty members. Its major emphasis is on the training of doctoral candidates in a broad program of advanced study and research for professional careers in universities or colleges, in governmental and private research organizations, or in business or financial concerns. At the present time the demands on a professional economist are such that the depth and breadth of the doctoral program have become indispensable training for a successful career. The Department, therefore, ordinarily admits to full-time graduate study only candidates for the Ph.D. In order to maintain a close and continuing contact between students and faculty, the entering class is normally held to 30.

1. Program of Studies
  [Table of Contents]
  1. Ph.D. in Economics
    [Table of Contents]

The doctorate normally requires the full-time concentration of the student for three or four years. Formal requirements are limited in number. The candidate must (1) demonstrate a mastery in five fields of study in economics, one of which is economic theory, both micro and macro; (2) achieve a specified level of competence in economic history, econometrics, and statistics; (3) submit and defend a dissertation that represents a contribution to knowledge; and (4) be in residence for a minimum of two years.

These requirements are met not merely by passing some appropriate set of subjects, but through an over-all preparation of subject matter and techniques that goes beyond course work. Candidates may differ in their rate of progress toward the satisfaction of these requirements, depending on their background, preparation, and interests. Normally, however, the satisfaction of requirements, other than the dissertation, is completed by the end of the second year.

The dissertation is a test of the candidate’s ability to conduct independent research — to formulate a significant topic and to bring to bear on it the analytic and quantitative tools of economics. The dissertation is prepared under the direction of departmental committee. Upon submission of the completed thesis, the candidate is examined orally by the thesis committee.

The Department has no general foreign language requirements. When a foreign language is essential for full access to the literature in the field of the student’s major interest (for example, European Economic History, Communist Economies) or to his thesis research, a language requirement will be imposed by the Department upon the recommendation of the Thesis Supervisor or the Graduate Registration Officer. Such a requirement will be administered by the Department of Foreign Literatures and Linguistics, and can be met by satisfactory course work at other schools, at M.I.T., or by examination.

1. 1. Interdepartmental Ph.D. Program
    [Table of Contents]

Occasionally students may desire a program that overlaps more than one department, but which in content and depth meets doctoral standards. At the initiative of the student, and with the approval of faculty members of each department, arrangements can be made to have the Dean of the Graduate School appoint a committee to guide the entire Ph.D. program. For details see the Graduate Student Manual. One such program, for instance, has been worked out with the Department of Urban Studies and Planning.

1. 1. Master’s Program
    [Table of Contents]

In very special and rare cases, students are admitted for study programs leading to the M.S. in Economics. This is awarded upon the satisfactory completion of a program, approved by the Graduate Registration Officer, of a year’s full-time study, including the presentation of a satisfactory thesis. The master’s program usually involves completion of the Department’s core requirements (see below), a semester of econometrics, and two semesters of a special field, in addition to the thesis.

1. Admission to the Graduate School
  [Table of Contents]

To be admitted into the program, a student must hold a Bachelor’s degree or its equivalent from an accredited college or university. It is not essential that the undergraduate degree be in economics. Graduate students entering the Department have had a wide variety of major background preparation varying from literature to physics. Some preparation in undergraduate economics, especially in economic analysis, is almost a necessity. Candidates who, upon admission, are deficient in mathematics are strongly urged to take mathematics in the summer before entering the program or work on a recommended self-study program in calculus to prepare for 14.102 Mathematics for Economists.

Completed application forms for admission must be submitted to the Admissions Office at M.I.T. by January 15 of the calendar year in which the applicant wishes to enter. In addition to the Institute application forms, the Department expects each applicant to submit a statement (one or two pages) explaining his interest in economics. An informal questionnaire is provided for his general guidance. Entrance is normally in September. February entrance is granted only under exceptional circumstances, since many subjects given in the spring are continuations of work given in the fall.

All applicants are urged to take the Graduate Record Examinations no later than the January preceding the September in which they wish to enter. They should take the quantitative and verbal aptitude tests as well as the test in economics. (Information can be obtained by writing to Graduate Record Examinations, Educational Testing Service, Box 955, Princeton, New Jersey 08540. Students in western states or in eastern Asia or the Pacific should write to 1947 Center Street, Berkeley, California 94704.)

Decisions regarding admission are the responsibility of the Departmental Graduate Admissions Committee, which bases its judgment on the undergraduate academic record of the applicant, both in general and with respect to particular subjects, on the letters of recommendation, and on the Graduate Record Examinations. Further information may be secured by writing to the chairman of the committee. Notices of acceptance are sent out by April 1, and candidates have until April 15 to notify the Department of their choice.

1. Fellowships, Scholarships, and Financial Assistance
  [Table of Contents]

While in the past virtually all graduate students received financial aid through scholarships, fellowships, or assistantships, the financial situation has changed to such an extent that complete support can no longer be assured. Moreover, the outlook is so uncertain that no definite statement is possible, even about minimum aid. Every effort will be made within the limits of our financial resources to support students who perform effectively. In view of this uncertainty, the Department is making efforts to expand the number of research assistantships, but students should expect to earn or borrow a larger proportion of their support than has been true in the past.

The sources of financial support are varied. (1) Many students are assisted by fellowships for which there is a national competition, such as those given by the National Science Foundation (NSF), the Ford Foundation, the Danforth Foundation, the Canada Council, and by foreign governmental agencies. Applications for such fellowships must be made directly to the appropriate foundation or agency, and an application for admission must also be made to M.I.T. (2) Awards of scholarships or fellowships are also made from M.I.T. funds or endowments. These include the Hicks Fellowship in Industrial Relations, the Graduate Economics Alumni Fellowships, endowed Institute fellowships, and a limited number of departmental awards. (3) A third group of students is supported by part time teaching and research assistantships and instructorships. In the past, research and teaching assistantships have been limited to candidates who have passed their general examination and are engaged in thesis research. However, in the light of the present financial stringency, these rules may be relaxed somewhat with respect to limited research assistantships for second year students. (4) Finally, students in good standing can avail themselves of loans through the Office of Financial Aid. U.S. citizens who are planning to be teachers may avail themselves of an NDEA loan, a substantial portion of which is forgiven upon entry into and continuance in teaching. They are also eligible for government-insured loans that are partially subsidized. Foreign students. however, may borrow only through the Graduate Loan Fund at the prime interest rate.

Entering students should apply for financial aid not later than January 15 of the calendar year in which they plan to enter. First-year awards are made on April 1, and applicants are given until April 15 to accept. Departmental awards for second and subsequent years are made in June. It is entirely appropriate for students to apply both for national awards and to M.I.T., since the outcome of national competitions is known before our awards are announced. Fellowships normally will include some cash payment toward living expenses, up to $2,000 for a single or married person without dependents, made in two equal installments at the beginning of each term. In offering scholarships and fellowships, the Department takes into account need as well as professional promise.

Remuneration for research assistantships varies, but in 1974-75 is normally at the rate of $6,585 per academic year for half-time work, out of which tuition of $3,350 must be paid. A half-time teaching assistantship in 1974-75 covers the tuition and pays $3,510 for the academic year — a total of $6,860. A very few half-time instructorships, for students who have demonstrated conspicuously effective teaching as an assistant, cover tuition plus $4,345 for living expenses — a total of $7,695 for the academic year.

As a supplement to academic-year appointments, both interdepartmental and departmental research groups are possible sources of full-time summer employment.

The academic performance of the student body is periodically reviewed to determine whether or not normal academic progress is being made. Failure to maintain normal progress may result in reduction or withdrawal of financial support. Students are invited at all times to discuss academic problems with their graduate registration officer, and the Department makes every effort to accommodate the needs of individual students.

1. Foreign Students
  [Table of Contents]

The Department has always welcomed foreign graduate students. They have typically constituted a significant portion of the student body. Some M.I.T. fellowships are available to entering foreign students, though the number is limited and the competition severe. Foreign students have an additional burden of transportation expense to cover and for this reason it is highly desirable to try to obtain at least partial support from other sources as well.

General information on scholarships, grants and travel can be obtained from the Institute of International Education, 809 United Nations Plaza, New York, New York, 10017, or from the Cultural Affairs Officer or the United States Information Service Office nearest the student’s place of residence.

Foreign applicants are required to submit evidence of their ability to carry on studies in English. Applicants whose native language is not English are required to take the test of English as a Foreign Language (TOEFL). Students whose schooling has been in English may request a waiver from the Advisor to Foreign Students at M.I.T. TOEFL is administered by the Educational Testing Service, Princeton, New Jersey, 08540; registration material and information about the test may be obtained by writing to the above address.

1. Living Arrangements
  [Table of Contents]

The Department is located in the Sloan Building, which, along with the adjoining Hermann Building, contains contiguous faculty offices, classrooms and seminar rooms, and student and faculty lounges. This complex also houses the Sloan School of Management, the Department of Political Science, and the Center for International Studies. The Dewey Library occupies two floors of the Hermann Building and contains the social science collection at M.I.T., reading rooms, and carrels to which thesis writers are assigned individually.

On-campus housing for graduate students is limited. Applications should be sent to the On Campus Housing Office, Room E18-307, M.I.T. Help in securing off-campus housing is given by the Community Housing Service, E18-306, M.I.T. Students should be alerted to the fact that Cambridge rental units are limited and in heavy demand. Transportation is convenient; the Sloan Building is located one block from the Kendall Square subway station.

1. Graduate Economics Associations
  [Table of Contents]

The Graduate Economics Association, composed of all graduate students, is a lively organization that sponsors monthly seminars and social events, and is one of the channels through which mutual student-faculty problems are discussed. The seminars permit discussions of current research by distinguished economists and occasional dialogues between faculty members. They are often followed by small dinners to which graduate students and faculty are invited, permitting more discussion among visitors, students and faculty. The Association annually elects nine student representatives to participate as voting members in Department meetings and other Department committees. Student representatives are full participants in all matters except those involving specific, identifiable individuals, or undergraduate matters. This policy at present excludes the discussion of details, but not the general policy, of tenure decisions, review of non-tenure faculty, new appointments, review of student performance, admissions and financial support.

The Black Graduate Economics Association provides a forum for the development and utilization of economic tools for solving the problems faced by Black people, encourages policies and programs which help increase the supply of highly qualified Black economists, opens lines of communication with other Black graduate students, Black economists, and the Black community, stimulates academic excellence, and provides outlets for various social activities. The BGEA has helped develop audio-visual aids now in use in many Black colleges’ economics departments, engaged in Institute recruiting projects, and participated in conferences of Black economists and administrators of Black colleges and universities. An econometric model of income and expenditures in Black communities is in its initial stage of development as a research project.

The Ph.D. Program in Detail
[Table of Contents]
1. General Plan of the Program
  [Table of Contents]

Students who complete the Ph.D. program should have a thorough understanding of the existing principles of economic theory and of the economic structure; an ability to think systematically about, and apply quantitative methods to, economic problems. The program gives roughly equal emphasis to these two goals, with formal courses and examinations to meet the first, and seminars, workshops, papers and the dissertation to meet the second. The student spends most of his first two years attempting to understand the existing ideas of economics. A basic principle of the program is that these ideas are sufficiently worthwhile so that their study is a necessary prelude to their use or criticism.

Throughout the program, there are formal provisions for students to engage in original work. During the first two years, term papers are often required. During the second year each student prepares a research paper as part of the requirement in econometrics. Second-year students are also encouraged to take part in workshops in their fields of primary interest. After passing the general examination, at the end of the second year or earlier, students spend full time in their own independent, original work. Their only formal obligation is to participate actively in the weekly meetings of the workshops in their fields of research.

1. The Core of the Graduate Curriculum
  [Table of Contents]

The Department offers an integrated set of subjects in economic theory, mathematics, econometrics and economic history.

1. 1. Economic Theory
    [Table of Contents]

The core in economic theory consists of two subject-years equally divided between microeconomics (14.121-14.124) and macroeconomics (14.451-14.454). These subjects are described in Section III of this report. The material is divided into half-semester subjects. The microtheory sequence starts in the fall term and runs through the first year, while the macrotheory sequence starts in the spring term and continues through the fall term of the second year. A qualifying examination on these subjects is offered three times a year — in September, December-January, and May — that must be passed in order to satisfy this part of the core requirement. The examination will cover each of the eight portions of the theory core, and a syllabus is available for each.

When a student feels sufficiently well qualified in the subject matter of any of the theory core subjects, he may take the qualifying examination, either before or after a particular set of lectures is offered. Only a passing grade is recorded when the examination is taken in advance of the lectures. If he fails to pass, he can then enroll for that particular section of theory and take the examination again at the end of that term. Should he pass some portion of theory by the preliminary examination, he could substitute a subject in advanced economic theory in the half-term in which he would have taken the basic theory subject. In principle, it is possible to pass all eight units of the theory core in this way and to proceed directly to more advanced work.

The Schedule for the Qualifying Examination in Theory is as follows:

Subject matter covered in:	Preliminary	Regular	Make-up
14.121-122	Sept.-Year I	Dec.-Year I	Sept.-Year II
14.123-124, 14.451-452	Jan.-Year I	May-Year I	Jan. Year II
14.453-454	Sept.-Year II	Dec.-Year II	Sept.-Year III

1. 1. Mathematics
    [Table of Contents]

The minimal core requirement in mathematics is calculus and linear algebra. Calculus is required for Statistics (14.381). While not stated as a formal prerequisite for the core theory subjects, it is virtually a necessity for mastering them.

If a student’s preparation in calculus were inadequate to satisfy the prerequisite for 14.102 Mathematics for Economists, the completion of the statistics and economics core requirements would be postponed a year. Econometrics (14.382 and 14.383 and most advanced theory subjects (14.141-14.149) require linear algebra. Students who have had a year of calculus and who want more mathematical training normally would take Mathematics for Economists (14.102) in the first term.

1. 1. Econometrics
    [Table of Contents]

The econometrics and statistics core requirement can be satisfied by (1) Statistics (14.381); (2) either Econometrics (14.382 and 14.383) or Applied Econometrics (14.388); and the completion of a piece of empirical research the equivalent of a term paper. This paper is due by the end of the fall term of the second year.

Entering students who lack calculus, and cannot take 14.102 in the first term, have two choices: either to postpone the three-term sequence: 14.381, 14.382, and 14.383 — to their third through fifth terms, or to take the two-term sequence, 14.381 and 14.388, in their third and fifth terms.

1. 1. Economic History
    [Table of Contents]

The core requirement in economic history is the satisfactory completion of one subject in American Economic History (14.731), European Economic History (14.733), or Russian Economic History (14.781).

1. Special Fields
  [Table of Contents]

In addition to the satisfactory completion of the core requirements, competence in four special fields must be demonstrated, two by passing a general examination and two by either satisfactory course work or a general examination. Preparation for a field examination normally consists of a year’s course work. Satisfaction of a field by course work alone requires the achievement of a grade of B or better in each of the two terms of subject matter. (The econometrics and history requirements can be satisfied with a grade of B-.) The areas in which the Department offers specialization are: advanced economic theory, international economics, labor economics, economic development, urban economics, monetary economics, fiscal economics, statistics and econometrics, economic history, industrial organization, comparative economic systems, Russian economics, human resources and income distribution, and, outside the Department, finance, production, transportation, and operations research. It is possible to use econometrics as a field without preparation beyond the core requirements. Economic history can be offered as a field by adding a second subject to the one satisfying the core requirement.

Students normally demonstrate competence in all four fields by the end of their second year. That is, they normally finish their required course work and general examinations by that time. In the event that scheduling or other difficulties interfere with this timing, one field other than theory or econometrics (including the paper — see II.B.3 above), or one subject in a field and in history, may be postponed until the third year. Before making such a deferment, students should consult with their Graduate Registration Officer.

Students planning to take the general examination before the end of the second year — the usual time — should consult in advance with their Graduate Registration Officer. In any case, such students would still be held to the above schedule.

Schematic Schedule of Typical Entering Student
[Table of Contents]

	[First year]		[Second year]
	1^st [term]	2^nd [term]	3^rd [term]	4^th [term]
Theory: Micro	14.121-2	14:123-4
Theory: Macro		14.451-2	14-453-4
Statistics and Econometrics	14.381 or 14.381	14.382	14.383 14.388
Mathematics	14.102
Special Fields and History	1 subject	1-2 subjects	2 subjects	4 subjects
Total Number of Subjects	4	4	4	4

*The minimal number of subjects to satisfy the special field and history requirements depends on whether history or econometrics is offered as a special field. If neither are offered, 9 subjects are required; if history, 8 subjects; if econometrics, 7 subjects; if both, 6 subjects.

1. Dissertation
  [Table of Contents]

Upon satisfaction of the core and field requirements, the Ph.D. candidate embarks on original research culminating in a completed dissertation that is defended orally. Thesis writers are required to participate in the workshop most germane to the subject of their thesis over the period of time they are working on it. Upon agreement on a topic with a primary thesis supervisor, a secondary thesis supervisor will be chosen by the student, subject to the approval of the Graduate Committee. A third faculty reader will be appointed by the Graduate Committee in consultation with the candidate when a final draft of the thesis will reasonably be expected to be completed within six months. The third faculty reader will have as his main function the unitary reading of the complete final draft of the thesis. These three faculty members will be the candidate’s thesis committee and are responsible for its acceptance and final defense.

In order to give adequate time for the final thesis review and revision, the completed draft must be submitted for final review a month before the Institute dates for submission of the dissertation. In 1975 the formal Institute dates are January 5, May 2, and August 11.

Graduate Subject in Economics
[Table of Contents]
1. General Economics and Theory
  [Table of Contents]

14.101	Mathematics for Economists Prereq.:—————	Units
14.101	Year: G(1)	3-0-6
Elementary calculus. Applications in economics. (Not offered 1974-75)

14.102	Mathematics for Economists Prereq.: 14.101	Units
14.102	Year: G(1)	3-0-6
Vector spaces and matrices; multivariate calculus and maximization with equality constraints; elementary differential equations.		H. A. Freeman

14.121	Microeconomic Theory I (A) Prereq.: 14.04	Units
14.121	Year: G(1) (1^st half of term)	2-0-4
Monopoly, oligopoly, product differentiation, monopsony. Comparison with pure competition. Comparative statics. Partial equilibrium welfare analysis.		R. L. Bishop

14.122	Microeconomic Theory II (A) Prereq.: 14.121	Units
14.122	Year: G(1) (2nd half of term)	2-0-4
Introduction to the theory of resource allocation and the price system. Emphasis on the use of efficiency prices as a guide to decentralized decision making.		M. L. Weitzman

14.123	Microeconomic Theory III (A) Prereq.: 14.122	Units
14.123	Year: G(2) (1^st half of term)	2-0-4
Theory of the producer and consumer. Cost functions, expenditure functions. Theory of distribution. Introduction to general equilibrium.		H. R. Varian

14.124	Microeconomic Theory IV (A) Prereq.: 14.123	Units
14.124	Year: G(2) (2nd half of term)	2-0-4
Capital theory and welfare economics.		P. A. Samuelson

14.132	Schools of Economic Thought (A) Prereq.:14.122	Units
14.132	Year: G(2)	3-0-6
Economic ideas developed by different groups of economists in recent times.		R. L. Bishop, P. A. Samuelson

14.141	General Equilibrium Theory Prereq.:14.124	Units
14.141	Year: G(1) (2^nd half of term)	2-0-4
General equilibrium. Existence and stability of competitive equilibrium. The core of an economy. (Not offered in 1974-75)		F. M. Fisher

14.142	Mathematical Programming and Economic Theory (A) Prereq.:14.122	Units
14.142	Year: G(2) (1^st half of term)	2-0-4
A rigorous treatment of linear and non-linear programming with applications to economic model building, including activity analysis and input-output.		M. L. Weitzman

14.143	Advanced Theory of the Market III (A) Prereq.: 14.122	Units
14.143	Year: G(2) (2^nd half of term)	2-0-4
Oligopoly and product differentiation, advertising, equilibria with seasonal or cyclical demand shifts.		R. L. Bishop

14.144	Applied Price Theory Prereq.:14.122	Units
14.144	Year: G(1) (1^st half of term)	2-0-4
Applications of price theory treated topically. Selected topics in price theory, with focus changing from year to year. Current emphasis is on the economics of exhaustible and renewable natural resources.		R. M. Solow

14.145	Economics of Uncertainty Prereq.:14.124	Units
14.145	Year: G(2)	3-0-9
Individual behavior under uncertainty. Equilibrium and welfare under uncertainty. Search and information.		J. A. Hausman, P. A. Diamond

14.148	Advanced Topics in Microeconomic Theory (A) Prereq.:14.124	Units
14.148	Year: G(2)	Arr.
14.149	Advanced Topics in Microeconomic Theory (A) Prereq.:14.124
14.149	Year: G(2)	Arr.
Advanced topics in microeconomic theory of current interest.		Staff

14.151	Mathematical Approach to Economics (A) Prereq.:14.122	Units
14.151	Year: G(2)	3-0-6
The use of mathematical methods in all the fields of economics.		P. A. Samuelson

14.191	Economics Seminar (A) Prereq.:14.121, 14.122	Units
14.191	Year: G(1)	3-0-6
14.192	Economics Seminar (A) Prereq.:14.121, 14.122
14.192	Year: G(2)	3-0-6
Special economic problems. In 1974-75, 14.192 — Economics of Public Sector.		J. Rothenberg

14.193	Seminar: Topics in Economics (A) Prereq.:14.121, 14.451	Units
14.193	Year: G(1)	3-0-6
14.194	Seminar: Topics in Economics (A) Prereq.:14.122, 14.452
14.194	Year: G(2)	3-0-6
Topics in economics of current interest.		Staff

14.195	Reading Seminar in Economics (A) Prereq.:14.122	Units
14.195	Year: G(1)	Arr.
14.196	Reading Seminar in Economics (A) Prereq.:14.122
14.196	Year: G(2)	Arr.
Reading and discussion of special topics in economics. (Open to advanced graduate students by arrangement with individual numbers of the staff.)		Staff

14.197	First-Year Graduate Seminar (A) Prereq.: 14.04	Units
14.197	Year: G(1)	2-0-6
Seminar limited to first-year graduate students. Discussion of projects of students, professional literature, methodology, economic policy, extending beyond regular curriculum.		J. N. Bhagwati

1. Industrial Economics
  [Table of Contents]

14.271	Problems in Industrial Economics (A) Prereq.: 14.04	Units
14.271	Year: G(1)	3-0-6
Small and large enterprises in the American economy; market structures; degrees of monopoly and competition; requisites of public policy.		M. A. Adelman

14.272	Government Regulation of Industry (A) Prereq.: 14.271	Units
14.272	Year: G(2)	3-0-6
Follows 14.271. Development of anti-trust policy, generally and in specific cases. “Public utility” price fixing, government ownership as alternative.		P. L. Joskow

14.291	Industrial Economics Seminar (A) Prereq.:14.271	Units
14.291	Year: G(1)	3-0-6
14.292	Industrial Economics Seminar (A) Prereq.:14.271
14.292	Year: G(2)	3-0-6
Readings, discussions, reports on such topics as industrial price policies, government regulation of industry, competitive practices, and similar problems in industrial economics.		Staff

1. Statistics and Econometrics
  [Table of Contents]

14.371

Statistical Inference (A)
Prereq.: 18.02

Units

Year: G(1)

3-0-9

A compact one-term course in elementary probability and statistical Inference. Axiomatic probability, random variables, distribution functions, mathematical expectation, generating functions, transformations of random variables, simple correlation and regression models, the normal distribution, sampling theory, point and interval estimation, maximum likelihood, least squares, testing statistical hypotheses. The exposition is somewhat more mathematical than

14.381.

H. A. Freeman

14.373	Time-Dependent Probability (A) Prereq.: 14.371 or 18.303	Units
14.373	Year: G(2)	3-0-6
Markov chains and Markov processes, the relevant ergodic theorem, Kolmogorov equations, time series theory; spectral density functions, harmonic representation, autoregressive models.		H. A. Freeman

14.374	Design and Analysis of Scientific Experiments (A) Prereq.: 14.381	Units
14.374	Year: G(2)	3-0-6
Application of statistical theory to the design and analysis of scientific experiments. Factorial and fractional factorial designs. Applications to experimentation in the physical, chemical, biological, medical, and social sciences.		H. A. Freeman

14.381	Statistical Method in Economics (A) Prereq.: 14.101 or 18.02	Units
14.381	Year: G(1)	4-0-8
Self-contained introduction to probability and statistics which serves as a background for advanced econometrics. Elements of probability theory, sampling theory, asymptotic approximations, decision theory approach to statistical estimation focusing on regression, hypothesis testing and maximum likelihood methods. Illustrations from economics and application of these concepts to economic problems.		J. A. Hausman

14.382	Econometrics I (A) Prereq.:14.102, 14.381	Units
14.382	Year: G(2)	4-0-8
14.383	Econometrics II (A) Prereq.:14.382
14.383	Year: G(1)	4-0-8
Theory and economic application of the linear multiple regression model. Identification and structural estimation in simultaneous models. Analysis of economic policy and forecasting in macroeconomic models. A term paper involving substantive original empirical research is required in 14.383.		R. F. Engle, R. E. Hall, J. A. Hausman

14.386	Advanced Topics in Econometrics (A) Prereq.: 14.383	Units
14.386	Year: G(2)	3-0-6
Selected topics including specification error, non-linear estimation, simulation, aggregation, and the derivation of economic policy models. (Not offered in 1974-5)		R. F. Engle, R. E. Hall, J. A. Hausman

14.388	Applied Econometrics (A) Prereq.: 14.102, 14.381	Units
14.388	Year: G(1)	3-0-9
Theory and practice of econometrics. The linear regression model, tests of hypotheses, generalized least squares, distributed lags, and simultaneous equations. Emphasis on applications. A term paper required.		R. F. Engle

14.391	Workshop in Economic Research (A) Prereq.:14.124, 14.454	Units
14.391	Year: G(1)	2-0-10
14.392	Workshop in Economic Research (A) Prereq.:14.124, 14.454
14.392	Year: G(2)	2-0-10
Designed to develop research ability of students through intensive discussion of dissertation research as it proceeds, carrying out of individual or group. research projects, and critical appraisal of current reported research. Workshops divided into various fields, depending on interest and size.		Staff

1. National Income and Finance
  [Table of Contents]

14.451	Macroeconomic Theory I (A) Prereq.: 14.06	Units
14.451	Year: G(1) (1^st half of term)	2-0-4
Macroeconomic analysis of general equilibrium. Financial markets and investment. Intertemporal equilibrium and growth models.		S. Fischer

14.452	Macroeconomic Theory II (A) Prereq.: 14.451	Units
14.452	Year: G(2) (2^nd half of term)	2-0-4
Determination of aggregate output, employment, and prices under static conditions. Keynes and alternate theories. The Phillips Curve. Inflation in the short and long run.		R. E. Hall

14.453	Macroeconomic Theory III (A) Prereq.: 14.452	Units
14.453	Year: G(1) (1^st half of term)	2-0-4
Quantitative macroeconomics. Consumption, investment, and other components of aggregate demand. Structure of complete econometric models of the U.S. economy		R. E. Hall

14.454	Macroeconomic Theory IV (A) Prereq.: 14.453	Units
14.454	Year: G(1) (2^nd half of term)	2-0-4
Growth models. Capital theory.		R. M. Solow

14.458	Advanced Topics in Macroeconomic Theory (A) Prereq.: 14.454	Units
14.458	Year: G(1)	Arr.
14.459	Advanced Topics in Macroeconomic Theory (A) Prereq.: 14.454
14.459	Year: G(2)	Arr.
Advanced topics in macroeconomic theory of current interest.		Staff

14.462	Monetary Economics I (A) Prereq.: 14.122, 14.452	Units
14.462	Year: G(2)	3-0-6
Examination of sources and determinants of supply of money with special attention to roles of commercial banks, Federal Reserve System, and Treasury. Discussion of nature of demand for money. Role of monetary policy in determination of level of economic activity. (Not offered in 1974-5; substitute 15.432 Capital Markets and Financial Institutions)		F. Modigliani

14.463	Monetary Economics II (A) Prereq.: 14.122, 14.452	Units
14.463	Year: G(1)	3-0-6
General equilibrium theory of money, interest, prices, and output; portfolio problems, cost of capital, and the effects of monetary phenomena on investment and accumulation of wealth with special reference to problems arising from uncertainty.		S. Fischer

14.471	Fiscal Economics I (A) Prereq.:14.122, 14.452	Units
14.471	Year: G(1)	3-0-6
14.472	Fiscal Economics II (A) Prereq.:14.122, 14.452
14.472	Year: G(2)	3-0-6
Examination, both theoretic and quantitative, of governmental fiscal institutions and behavior: the budget process, taxation, expenditure, pricing, and debt activities.		P. A. Diamond, A. F. Friedlaender

14.482	Income Distribution Economics (A) Prereq.: 14.124	Units
14.482	Year: G(1)	3-0-9
Modern theories and empirical studies of the determinants of the distribution of income and wealth.		L. C. Thurow

1. International, Interregional, and Urban Economics
  [Table of Contents]

14.572J	Regional Economic Analysis (A) Prereq.: 14.03 or 14.05	Units
14.572J	Year: G(2)	3-0-6
Analysis of regional economies with emphasis on the sources, characteristics, and implications of spatial concentrations of economic activities. Urban development in its regional setting is examined and the special problems of lagging areas in both developing and developed countries. Methods of integrating national and regional planning.		J. R. Harris

14.573J	Urban Economic Analysis I (A) Prereq.: 14.03 or 14.05	Units
14.573J	Year: G(1)	3-0-6
Patterns and processes of growth and structural change within metropolitan areas. The land use market and the spatial structure of the metropolitan community. The housing market: demand and supply, growth, aging, and renewal. The urban transportation system and its problems. Models of the metropolis. In each of these topics, emphasis on the resource allocation process, its efficiency and implications for income distribution.		W. C. Wheaton

14.574J	Urban Economic Analysis II (A) Prereq.: 14.573J	Units
14.574J	Year: G(2)	3-0-6
Continuation of 14.573J. The nature and problems of government decision-making in metropolitan areas. The economies of segregation, congestion, and pollution in the metropolitan area. Urban-suburban relations; market and government. Welfare economics and the normative theory of local public policy. Applied normative analysis: criteria for public expenditures; cost benefit analysis. Examination of public policy issues in current urban problems; poverty, race, the spatial form of the city, optimal land use patterns, growth and renewal, development and new communities.		J. Rothenberg

14.581	International Economics I (A) Prereq.: 14.04, 14.06	Units
14.581	Year: G(1)	4-0-8
Theory of international trade and applications in commercial policy.		J. N. Bhagwati

14.582	International Economics II (A) Prereq.: 14.581	Units
14.582	Year: G(2)	4-0-8
Adjustment in international economic relations with attention to foreign exchange markets, balance of payments, and the international monetary system.		C. P. Kindleberger

1. Labor Economics and Industrial Relations
  [Table of Contents]

14.671J	Labor Economics (A) Prereq.: 14.64 or 15.663	Units
14.671J	Year: G(1)	3-0-6
Primary emphasis on the structure of labor markets and the determinants of wage levels, unemployment, the distribution of income and employment opportunity. Special attention will also be given to the impact of unions on both wage and non-wage elements of collective bargaining in the light of the characteristics and objectives of particular unions. Other special topics growing out of recent research in labor economics.		M. J. Piore, C. A. Myers

14.672J	Public Policy on Labor Relations (A) Prereq.: 14.64, 15.663	Units
14.672J	Year: G(1)	3-0-6
Major trends in legislation and other government activities affecting the work place. Topics include wage and price controls, equal opportunity employment, and government regulation of union organization, collective bargaining, industrial disputes, wages and hours of work, and work-place health and safety. The broad economic and social questions raised by these trends also explored.		M. J. Piore D. Q. Mills

14.674J	Comparative Systems of Industrial Relations and Human Resource Development (A) Prereq.: 14.64, 15.663	Units
14.674J	Year: G(2)	3-0-6
International and comparative analysis of industrial relations systems and systems of human resource development. Concentration on an examination of selected issues involving interest groups and the strategies of economic development, including discussion of the nature and functions of labor and management organization in different contexts; the role of the state in establishing procedures and in shaping the substance of industrial relations; the participation of interest groups in the formulation of economic and social policy: manpower and economic growth in the context of comparative systems of human resource development; worker participation in management, and other topics.		C. A. Myers E. Tarantelli

14.691J	Research Seminar in Industrial Relations (A) Prereq.:14.671J or 14.672J	Units
14.691J	Year: G(1)	3-0-6
14.692J	Research Seminar in Industrial Relations (A) Prereq.:14.14.691J
14.692J	Year: G(2)	3-0-6
Discussion of important areas for research in industrial relations, frameworks for research, research techniques, and methodological problems. Centered mainly on staff research and the thesis research of advanced graduate students		C. A. Myers

14.672J	Public Policy on Labor Relations (A) Prereq.: 14.64, 15.663	Units
14.672J	Year: G(1)	3-0-6
Major trends in legislation and other government activities affecting the work place. Topics include wage and price controls, equal opportunity employment, and government regulation of union organization, collective bargaining, industrial disputes, wages and hours of work, and work-place health and safety. The broad economic and social questions raised by these trends also explored.		M. J. Piore D. Q. Mills

1. Economic History
  [Table of Contents]

14.731	American Economic History (A) Prereq.: 14.121	Units
14.731	Year: G(1)	3-0-6
Survey of the beginnings of American industrialization, emphasizing a quantitative approach and the nineteenth century. Topics include effects of government economic policies, such as land distribution and tariffs, the importance of railroads, profitability of slavery.		P. Temin

14.732	Russian Economic History (A) Prereq.: 14.122	Units
14.732	Year: G(2)	3-0-9
A comparative study of the major problems in Russian economic history prior to 1917 both for their own sake and as a background for understanding of the events of 1917 and of the Soviet policies since. The topics covered vary yearly depending on the interests of the participants, but the land and peasant problems and industrialization methods emphasized.		E. D. Domar

14.733	European Economic History (A) Prereq.: 14.121	Units
14.733	Year: G(1)	3-0-6
Development of the European economy since 1750 and, especially since 1850, with emphasis on growth and slowdown, the transition from local to national and European-wide institutions, and extra-European relations.		C. P. Kindleberger

14.734	Problems in Economic History (A) Prereq.: 14.731, 14.732, or 14.733	Units
14.734	Year: G(2)	3-0-6
Analysis of problems of industrial society, concentrating on the century after 1860 and on the American experience. Topics vary yearly and include effects of wars on welfare and growth, the nature of the long deflation of the late nineteenth century, the contrast in international relations before and after 1914, the depression of the 1930’s.		P. Temin

1. Economic Development
  [Table of Contents]

14.771	Problems of Economic Development (A) Prereq.: 14.122, 14.452	Units
14.771	Year: G(1)	3-0-6
Analysis of problems of the rural sector in developing countries, urban-rural migration, unemployment, sectoral balance and efficiency of private resource allocation.		R. S. Eckaus

14.772	Theory of Economic Development (A) Prereq.: 14.122, 14.452	Units
14.772	Year: G(2)	3-0-6
Analysis of problems of international trade and development; study of structure and use of planning models for development policy and use of cost benefit analysis.		J. N. Bhagwati

14.773	Optimal Growth Theory (A) Prereq.: 14.124, 14.454	Units
14.773	Year: G(2)	3-0-9
The optimal growth problem, duality theory, development and application of the maximum principle. The behavior of optimal trajectories for a variety of situations. (Alternate years. Offered 1974-75.)		M. L. Weitzman

14.774J	Transfer and Adaptation of Technology in Developing Countries (A) Prereq.: Permission of Instructor	Units
14.774J	Year: G(2)	3-0-6
Consideration of the problems of transferring and adapting technologies originating and used in the richer countries of the world to the developing nations. Specific topics include: political, institutional, economic, and engineering issues involved in the transfer of technology.		R. S. Eckaus, F. Moavenzadeh, N. Choucri

14.782	Capitalism, Socialism and Growth (A) Prereq.: 14.122, 14.452	Units
14.782	Year: G(1)	3-0-6
A comparative study of capitalist and socialist economies mainly from the point of view of development and growth, and with major emphasis on the economy of the Soviet Union.		E. D. Domar

14.783	Theory of Central Planning (A) Prereq.: 14.124	Units
14.783	Year: G(2)	3-0-9
Multilevel planning. Decomposition principles and their application. Planning with prices and with quantities. Materials balancing and input-output. Applications of inventory theory. The problems posed by non-convexities. (Alternate years. Not offered 1974-75.)		M. L. Weitzman

The Faculty in Economics
[Table of Contents]

Morris A. Adelman, Ph.D., Harvard; Professor of Economics.

Sidney S. Alexander, Ph.D., Harvard; Professor of Economics.

Jagdish N. Bhagwati, Ph.D., M.I.T.; Professor of Economics.

Robert L. Bishop, Ph.D., Harvard; Professor of Economics; Chairman, Graduate Admissions Committee.

E. Cary Brown, Ph.D., Harvard; Professor of Economics; Head of Department.

Peter A. Diamond, Ph.D., M.I.T.; Professor of Economics; Graduate Registration Officer; Chairman, Department Graduate Committee.

Evsey D. Domar, Ph.D., Harvard; Professor of Economics; Graduate Placement Officer.

Richard S. Eckaus, Ph.D., M.I.T.; Professor of Economics; Graduate Registration Officer; Chairman, Committee on Economic Research.

Robert F. Engle, III, Ph.D., Cornell; Associate Professor of Economics.

Stanley Fischer, Ph.D., M.I.T.; Associate Professor of Economics.

Franklin M. Fisher, Ph.D., Harvard; Professor of Economics (on leave).

Harold A. Freeman, S.B., M.I.T.; Professor of Statistics.

Ann F. Friedlaender, Ph.D., M.I.T.; Professor of Economics.

Robert E. Hall, Ph.D., M.I.T.; Professor of Economics; Graduate Registration Officer.

John R. Harris, Ph.D., Northwestern; Associate Professor of Economics.

Jerry A. Hausman, Ph.D., Oxford; Assistant Professor of Economics.

Karl G. Jugenfeldt, Ph.D., Visiting Professor of Economics (Spring Term).

Paul L. Joskow, Ph.D., Yale; Assistant Professor of Economics.

Charles P. Kindleberger, Ph.D., Columbia; Professor of Economics.

Edwin Kuh, Ph.D., Harvard; Professor of Economics.

Franco Modigliani, D.Jur., Rome, and D.Soc.Sci., New School of Social Research; Institute Professor; Professor of Economics.

Charles A. Myers, Ph.D., Chicago; Professor of Industrial Relations.

Michael J. Piore, Ph.D., Harvard; Associate Professor of Economics (on leave, Spring Term).

Jerome Rothenberg, Ph.D., Columbia; Professor of Economics.

Paul A. Samuelson, Ph.D., Harvard; Institute Professor; Professor of Economics.

Abraham J. Siegel, Ph.D., California (Berkeley); Professor of Industrial Relations; Associate Dean of Management.

Robert M. Solow, Ph.D., Harvard; Institute Professor; Professor of Economics.

Lance J. Taylor, Ph.D., Harvard; Professor of Nutritional Economics.

Peter Temin, Ph.D., M.I.T.; Professor of Economics.

Lester C. Thurow, Ph.D., Harvard; Professor of Economics (on leave, Spring Term).

Hal R. Varian, Ph.D., California (Berkeley); Assistant Professor of Economics.

Martin L. Weitzman, Ph.D., M.I.T.; Professor of Economics.

William C. Wheaton, Ph.D., Penn.; Assistant Professor of Economics.

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

Tags Adelman, Alexander, Bhagwati, Bishop, BrownEC, Diamond, Domar, Eckaus, Engle, Fischer, FisherFM, FreemanHA, Friedlaender, HallR, HarrisJR, Hausman, Joskow, Kindleberger, Kuh, MillsDQ, Modigliani, Myers, Piore, Rothenberg, Samuelson, Siegel, Solow, Tarantelli, TaylorLJ, Temin, Thurow, Varian, Weitzman, Wheaton

Economics Programs Economists M.I.T.

M.I.T. Department of Economics Annual Report by E. Cary Brown, 1975-1976

Post author By Irwin Collier
Post date 2024-04-20

The following annual report of the M.I.T. department of economics was most likely written for the care and feeding of administrators and the members of the department’s visiting committee. This report covers what was my second year of graduate school, so for folks from that time it reads like an annual Holiday newsletter to the family.

_______________________

Department of Economics
1975 – 76

Undergraduate Program

The long-run impact of the past year’s changes in the Institute Requirement in the Humanities, Arts, and Social Sciences is not yet clear. Unquestionably they have increased the Department’s enrollment, but the precise amount is uncertain because simultaneously a major revision was made in the two introductory economics subjects. In the past year enrollments were larger than previously, but smaller than in the transition of the previous year. Nearly 200 of the Class of 1976 concentrated in economics for their Humanities, Arts, and Social Sciences Requirement. Of all students presently enrolled, 327 (primarily juniors and seniors) have elected to concentrate in economics.

Undergraduate majors remain steady in numbers. As in 1974-75, 20 degrees were awarded. In the spring term the Undergraduate Economics Association was reactivated. Its weekly meetings with faculty led to several proposals for revision of the undergraduate program, and several student-faculty socials were organized.

Graduate Program

Enrollment has been remarkably steady in the graduate program. The number of applications for admission was virtually identical to the average of the previous six years. Next year’s entering class of 32 will be slightly larger than average, and will have fewer foreign students and more women, reflecting a shift in the percentage of applications from these groups. Four students from minority groups are expected to be in this class.

Financial support for the graduate student has changed very little over the last several years. We are still fortunate in having from one-third to one-half of the entering students on National Science Foundation Fellowships. For the whole student body, there has been an increase in the support by US foundations (other than NSF) and a decrease in support provided by M.I.T.

The number receiving the Doctor of Philosophy increased somewhat in the past year to 21. For the first time, two American blacks received degrees.* The class fared well in placement, their median salary offer totaling 24 percent above that of 1971. Like the past average, 86 percent went into teaching and 14 percent into non-teaching positions.

*Samuel Myers, Jr. Ph.D. thesis: “A Portfolio Model of Illegal Transfers”, supervised by Robert Solow.
Glenn Loury. Ph.D. thesis: “Essays in the Theory of the Distribution of Income”, supervised by Robert Solow.
See: William Darity Jr. and Arden Kreeger, “The Desegregation of an Elite Economics Department’s PhD Program: Black Americans at MIT“, History of Political Economy 46 (annual suppl.)

The Graduate Economics Association awarded the outstanding teacher in the Department prize to Professor Stanley Fischer.

PUBLIC SERVICE ACTIVITIES

The faculty has always been involved in public service activities tying research to the public interest. In connection with M.I.T.’s participation in the Bicentennial Celebration, Professor Jagdish N. Bhagwati set up a recent conference on the New International Economic Order: Professor Ann F. Friedlaender is planning one for this fall on Air Pollution and Administrative Control. Through the German Marshall Fund, Professor Richard S. Eckaus is organizing a fall conference on economic problems of Portugal. Professor Franco Modigliani arranged a conference through the Bank of Finland on International Monetary Mechanisms.

Various Congressional committees and government agencies have been advised. Professor Peter A. Diamond served on the Consultant Panel on Social Security for the Congressional Research Service. Professors Rudiger Dornbusch and Fischer and Institute Professor Paul A. Samuelson prepared a report for the US Department of Commerce on international financial arrangements. Professor Robert E. Hall was a member of the Advisory Committee on Population Statistics, Bureau of the Census. Professor Jerry A. Hausman served on the Econometrics Advisory Committee to the Federal Energy Administration. Institute Professor Modigliani was a consultant and member of the Committee on Monetary Statistics, Board of Governors of the Federal Reserve System. Institute Professor Samuelson consulted with the Board of Governors of the Federal Reserve System, the US Treasury, and the Congressional Budget Office. Professor Charles A. Myers was a member of the National Manpower Policy Task Force. Institute Professor Robert M. Solow served as Deputy Chairman, Federal Reserve Bank of Boston.

Several faculty members have been involved with the National Academy of Sciences and its related organizations. Professor Eckaus prepared a report, Appropriate Technology for Developing Countries, for the Board on Science and Technology for Developing Countries of the National Academies of Science and Engineering. Professor Franklin M. Fisher served on a National Academy panel on the Effects of Deterrence and Incapacitation; Professor Friedlaender was on the Executive Committee, Assembly of Behavioral and Social Sciences, National Research Council; Institute Professor Modigliani was on the Finance Committee; Institute Professor Samuelson served on the Editorial Board of the Proceedings; and Institute Professor Solow chaired the Steering Committee on Environmental Studies.

Professor Eckaus led an OECD Mission to Portugal that included Professors Lance Taylor and Dornbusch.* Professor Paul L. Joskow was a consultant to OECD in energy. Professor Evsey D. Domar was a member of a delegation of economists sent by the American Economic Association to the Soviet Union. Institute Professor Modigliani, who gave much time to the problems of stabilization in Italy, was a member of the Board of Directors of the Italian Council for Social Sciences.

*Along with several graduate students among whom were Paul Krugman, Andrew Abel and Jeffrey Frankel. Paul Krugman has written a short note about this experience with a picture!

The Brookings Institution Panel for Economic Activity included Professors Dornbusch and Hall, with Institute Professors Modigliani, Samuelson, and Solow as senior advisors to it. Professor Friedlaender served on the examining committee, Graduate Records Examination, Educational Testing Service. Institute Professor Modigliani served on the Committee on Economic Stabilization, Social Science Research Council. Professor Fisher is a member of the Board of Governors of Tel Aviv University. Institute Professor Solow continues as Trustee for the Institute of Advanced Study.

RESEARCH

International topics seem to dominate the research interests of the faculty. Professor Bhagwati, in addition to his work in developing countries and international trade theory, has given attention to a proposal for applying taxation to the brain drain. Professor Eckaus studied the role of financial markets and their regulation and the behavior of income distribution in economic development. Professor Taylor had three major areas of research: the development of nutrition planning models in Pakistan, international food aid and reserve policies, and growth and income distribution in Brazil.

Professor Morris A. Adelman’s continuing research on the world oil market, Professor Joskow’s analysis of the international nuclear energy industry, and Professor Martin L. Weitzman’s examination of OPEC and oil pricing involve applied microeconomics with international implications.

Research in various applied microeconomics areas was responsible for the second largest fraction of faculty effort. Institute Professor Solow continued to research the economics of exhaustible resources, and Professor Weitzman completed his analysis of the optimal development of resource pools. Professor Joskow has explored the future of the electric utility industry and its financing, the future of the US atomic energy industry, and the pattern of energy consumption in the US. He is developing a simulation model of the energy industry, and is reviewing the regulatory activities of government agencies in general and the health care sector in particular. Professor Hausman examined the Project Independence Report and is analyzing the choice of new technologies in energy research.

In the transporation field, Professor Friedlaender surveyed the issues in regulatory policy for railroads and alternative scenarios in federal transporation policy. Professor Jerome Rothenberg examined such problems in urban transportation as pricing policies, demand sensitivity to price, and modeling locational effects. Professor William C. Wheaton considered an optimal pricing and investment policy in highways under a gasoline tax.

Inextricably intertwined with urban transportation are questions of urban location and housing. Professor Rothenberg carried out research in such aspects of this problem as microeconomics of internal migration, supply-demand for housing in multizoned areas, the impact of energy costs on urban location, and the development of a model of housing markets and of metropolitan development and location that can be applied to general policy questions. Professor Wheaton developed an equilibrium model of housing and locational choice based on Boston experience.

Institute Professor Modigliani also conducted research on the housing market, but his interest comes primarily from the side of stabilization policies and similar macroeconomic problems. He also participated in a review after 20 years of his life cycle hypothesis of saving, made monetary policy prescriptions for both the US and Italy, reflected on the description of financial sectors in econometric models, and explored more deeply the application of optimal control to the design of optimal stabilization policies in economic models. Institute Professor Samuelson reviewed the art and science of macromodels over the 50 years of their development. Professor Friedlaender completed a quarterly macromodel of the Massachusetts economy. Professor Hall developed a model to deal with income tax changes and consumption.

Public economics has both macro and micro aspects, both of which are represented in the Department’s research. With Visiting Professor James A. Mirrlees, Professor Diamond theorized about public shadow prices with constant returns to scale, and about the assignment of liability. He also has generalized the Ramsey tax rule and continued his research into an optimal Social Security system. Professor Hausman is reexamining the cost of a negative income tax; Professor Rothenberg analyzed the distributional impact of public service provision; and Professor Wheaton explored intertemporal effects of land taxes, fiscal federalism in practice, and the financial plight of American cities.

Besides such theoretical research, there was significant research of an entirely pure nature. Professor Robert L. Bishop reexamined the measurement of consumer surplus. Professor Fisher extended his exploration of the stability of general equilibrium and of aggregate production functions. Professor Weitzman investigated the welfare significance of national product in a dynamic economy. Professor Hal R. Varian further explored the theory of fairness, non-Walrasian equilibria, and macromodels of unemployment and disequilibrium. Professor Hausman examined the econometric implications of truncated distributions and samples, of probit models, and of simultaneous equation models. In historical research, Professor Domar was concerned with serfdom, while Professor Charles Kindleberger investigated the role of the merchant in nineteenth-century technologic transfer.

Publications

Professor Bhagwati edited Taxing the Brain Drain: A Proposal and Brain Drain and Taxation: Theory and Empirical Analysis, and coauthored Foreign Trade Regimes and Economic Development: India. Professors Dornbusch and Kindleberger published numerous papers on implications of the new international monetary exchange structure for exchange rates, price stability, international trade, and international capital movements. Professor Weitzman continued his study of the Russian economy with a paper on the new Soviet incentive model.

With Visiting Professor of Management Ezio Tarantelli*, Institute Professor Modigliani published Labor Market, Income Distribution and Private Consumption (in Italian) and various papers on stabilization policy in Italy. He also wrote papers on inflation and the housing market and edited New Mortgage Designs for Stable Housing in an Inflationary Environment. Professor Hall’s labor market research resulted in papers on persistence of unemployment, occupational mobility, and taxation of earnings under public assistance. Professor Michael Piore wrote on labor market stratification and the effect on industrial growth of immigration from Puerto Rico to Boston. Professor Fisher had several publications on indexation and adjustment of mortgages to inflationary episodes. In the realm of economic history, Professor Temin published Reckoning with Slavery and Did Monetary Force Cause the Great Depression?

*Ezio Tarantelli was the victim of a Red Brigades’ assassination in 1985.

Institute Professor Samuelson published theoretical papers on factor price equalization and trade pattern reversal. In the realm of pure research, he put out papers on nonlinear and stochastic population analysis, optimal population growth, and the optimal Social Security system implied in a lifecycle growth model. He also brought out the tenth edition of his famous text, Economics: An Introduction Analysis.

FACULTY

Visiting Professor John R. Moroney was here from Tulane University; Visiting Professor Mirrlees came in the spring term from Nuffield College, Oxford University. Regular faculty on leave were Professors Fisher and Joskow in the fall and Professor Weitzman in the spring.

It is a pleasure to report the promotion to Associate Professor of Jerry A. Hausman. A new appointee, Professor Jeffrey E. Harris, with the unusual background of an M.D. and a Ph.D. in economics, will provide long-sought coverage in health economics.

Professor Kindleberger will retire as Ford Professor and become a Senior Lecturer on a half-time basis. Since 1948, when he came as an Associate Professor, Professor Kindleberger has been an effective teacher, scholar, participant in faculty governance, and counselor to governments and the public. He has trained the leading international economists of the next generation; he has produced a dozen books and more than a hundred articles in international trade and finance and in economic history. He epitomizes the highest kind of academician.

Several honors were bestowed on members of the Department. Institute Professor Modigliani will complete his year as President of the American Economic Association. Professor Myers received a Distinguished Alumni award from Pennsylvania State University. Professor Fisher was F.W. Paish Lecturer to the Association of (English) University Teachers of Economics. Institute Professor Solow received a D. Litt. from Warwick University, and Institute Professor Samuelson, a D.Sc. from the University of Rochester.

EDGAR CARY BROWN

Source: MIT Libraries, Institute Archives and Special Collections. MIT Department of Economics Records, Box 1, Folder “Annual Report 1975-6”.

Image Source: Building E52, Alfred P. Sloan Jr. Building, later Morris and Sophie Chang Building

https://mitmuseum.mit.edu/collections/subject/building-e52-alfred-p.-sloan-jr.-building-later-morris-and-sophie-chang-building-52

Tags Adelman, Bhagwati, Bishop, BrownEC, Diamond, Domar, Dornbusch, Eckaus, Fischer, FisherFM, Friedlaender, Hall, HarrisJE, Hausman, Joskow, Kindleberger, Mirrlees, Modigliani, MoroneyJR, Myers, Piore, Rothenberg, Samuelson, Solow, Tarantelli, TaylorLD, Temin, Varian, Weitzman, Wheaton

Economics Programs M.I.T. Undergraduate

M.I.T. Economics department committee (re-)organization. 1976-78

Post author By Irwin Collier
Post date 2022-05-19

During my second year in graduate school at M.I.T. (1975-76), the economics department professors were engaged in a discussion about reforming the administration of their department. At the time I was completely unaware of this discussion that had been provoked by the following memorandum written by then Department Head, Professor E. Cary Brown, based on his experience with the growing overload of administrative chores and responsibilities in a department with the scale of that attained by M.I.T.’s economics department.

Brown’s memo to the faculty is followed by a transcription of a copy of the letter Brown wrote to Robert Solow, who as an administrative reorganization committee member, must have been asked for some further testimony. The entire committee’s (Peter A. Diamond, Stanley Fischer, Jerry Hausman, Paul Joskow, Robert M. Solow) report was completed two months after Brown’s memo. In the same departmental file from the M.I.T. archives, one finds a copy of the actual assignment of administrative responsibilities for the academic year 1977/78.

Many, if not most, of the administrative tasks had been allocated and faithfully executed before this “reorganization”. I know that Evsey Domar had long been covering the placement of new Ph.D.’s and also proudly serving as the departmental representative for library-related affairs. I sense reading these documents that the truly neglected child all along was the undergraduate program for which some arm-twisting was required to achieve equitable burden-sharing among the faculty. But perhaps there were other specific items that had been sore points too. Maybe Brown simply wanted an explicit organization chart to forestall “whataboutism” from the mouths of relatively uncooperative colleagues. But like I wrote above, this was a discussion that was invisible to me (appropriately so) at the time.

Cf. The committee assignments in the Harvard economics department during the 1972-73 academic year.

__________________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
DEPARTMENT OF ECONOMICS
CAMBRIDGE, MASSACHUSETTS 02139

March 12, 1976

Economics Department Faculty

Dear [blank]

For some time I have become increasingly dismayed at the increase in the administrative burden in the Department, and now find the present job as Head to be a nearly impossible one. If the job is to be made tolerable, it must have substantial additional faculty support in some form to cut it down to a scope manageable either by me or a successor.

There are two basic ways that this can be achieved: (1) by spreading the administrative activities and responsibilities more widely among the faculty; or (2) placing these tasks on essentially an associate departmental head, whose precise title could take various forms Executive Officer, Academic Officer (e.g., Tony French in Physics), or Associate Head. I personally would favor the Associate Head route, but regard it as an open question subject to further discussion and consideration, and to Administration approval. This new structure should be treated as an experiment, to last no longer than until the next Head is chosen, and to be reconsidered at that time.

My own thinking about the administrative tasks of the Department separates them into four major areas: undergraduate programs, graduate programs, research programs, and personnel and budgeting. While these can be headed by an administrator or by faculty, it seems to me that the first two programs should have formal faculty control regardless of the form the administrative reorganization takes. The graduate program nearly has that form now and largely runs itself, with the exception of a few odds and ends that now lie outside the responsibility of the graduate registration officers. The undergraduate program is a long way from this structure and will require a good deal of imagination, initiative and effort to resuscitate the Undergraduate Economics Association and provide more guidance and support for majors. The research programs (student and faculty) focus more or less clearly under the Committee on Economic Research. Personnel and budgeting are an administrative responsibility. They have involved increasing amounts of time as budgets have tightened, space has tightened, and the search for new faculty has expanded.

The administrative structure is an important matter to the Department. Because it involves departmental administration and the role of the Department Head, it concerns the Administration through Dean Hanham. He has asked me to appoint the following committee to consider these questions of reorganization and to make recommendations: Bob Solow, Peter Diamond, Stan Fischer, Paul Joskow, and Jerry Hausman. Please give your views to members of the committee as soon as you can.

Sincerely,
[signed “Cary”]
E. Cary Brown, Head

ECB/sc

__________________________

Brown to Solow

March 16, 1976

Professor Robert Solow
E52-383

Dear Bob:

I shrink from making organization charts, but the following diagram is intended to give some idea of the orders of magnitude of faculty involvement in departmental chores.

Chairman, Committee on Undergraduate Studies

Faculty counselors (we have agreed with the UEA to keep members to 10 or less, and let faculty build up expertise by staying adviser for freshman, sophomore, junior, or senior year).

—10 faculty: 2 for each class. 4 for seniors

Faculty adviser for humanities concentration in economics (advises and signs up students); also considers the eligibility of economics subjects, what we consider concentration, etc.
Closely related to (2) is possible membership on the so-called Humanities Committee that approves and reviews the whole Humanities, Arts, and Social Science requirement and program. (We have no one on this year but as the largest concentration will surely need to have a presence.)
Approval of transfer of credits from other schools to M.I.T.
Advising with Undergraduate Economic Association in matters academic, professional, social.
Undergraduate placement, while an Institute responsibility, could be supervised and assisted by a faculty member who would keep up to date on summer placement, interning possibilities, salaries. The experience our students have applying to graduate schools, actual jobs offered and taken.
Design of curriculum, cooperative program, etc.
Various activities, such as providing information to undergraduates in their choice of major (Midway in fall, seminar in spring), Open House activities, Alumni activities, etc.
Relations with other Departments at undergraduate level, such as subject offerings, subject content, etc.
Supervision and staffing of undergraduate subjects with multiple sections — 14.001, 14.002, 14.03, 14.04, 14.06, 14.30, 14.31.
Catalog copy.

Chairman, Committee on Graduate Studies

Graduate Registration Officers, so far one each for first two years, and one for thesis writers. Has been suggested that we have an additional adviser for foreign students and minority and women?
Admissions Committee has, in the past, had three members.
Placement, both summer and permanent.
Supervision of core subjects.
Ph.D. and M.S. requirements, program, size.
Financial aid — coordinating various GRO; Admissions Committee, and Budget limitations.
Graduate School Policy Committee meetings.
Annual revision of brochure.
Graduate Economics Association, Black Graduate Economics Association.
Catalog copy.
Various activities — professional and social that are not contained within a particular class.

Chairman, Committee on Economic Research (I faculty)

Organized list of faculty projects requiring research assistants and the supply of them (both graduate and undergraduate). Assignment of R.A.’s.
Assistance in research proposals.
Inventory of internships and off-campus research.
Supervision of unscheduled subjects, such as UROP, Undergraduate Seminar, and thesis.
Supervision of M.I.T. Working Paper Series.
Allocation of computer funds, developing rules, developing alternative sources.

Personnel and Budgeting (Administrative Officer and a large chunk of my time)

Personnel
1. Nonfaculty is supervised by the Administrative Officer.
2. Faculty Personnel

(1) Employment — new Ph.D.’s and senior faculty
(2) Review and promotion
(3) Assignments, leaves, research

1. Postdoctoral personnel
Space allocations, revisions.
Budget Proposals
a. Proposals
b. Implementation

Telephone
Xerox & Ditto
Supplies
Equipment

There may be other matters that I am leaving out – routine meetings average probably a day a week, and things like that. Consultations with faculty, students, and other Departments, would probably add a couple more days.

If there are questions, I’ll oblige, of course.

Sincerely,
E. Cary Brown, Head

ECB/sc

__________________________

MEMORANDUM

May 10, 1976

TO: Department Faculty
FROM: Committee on Reorganization (PAD, SF, JH, PJ, RMS) [Peter A. Diamond, Stanley Fischer, Jerry Hausman, Paul Joskow, Robert M. Solow]

SUBJECT: Reorganization

ECB’s [E. Cary Brown] letter of March 12, which created this committee, starts from the premise that the administrative burden on the Department Head has become essentially impossible. This seems clearly to be the case. It has happened because the department has increased in size and complexity without any corresponding adaptation of its administrative arrangements. Every new function has fallen into the Head’s lap. (Top that, anyone.) Apart from the sheer burden of work thus created, another problem is the difficulty of communications, because that is also time-consuming.

After some palaver and negotiation, we have a reorganizational package to suggest. It rests on two conditions; since it is something of an interconnected web, it will probably unravel if the two conditions can not be met. (1) Since the only way to correct an excessively centralized structure is to decentralize it, we propose to diffuse administrative responsibility more widely through the department; there will be at least one serious administrative post for everyone, or perhaps two minor posts instead, but everyone will have to participate. (2) The administrative load attached to the undergraduate program has increased with the size of the enrollment and the improvement of the curriculum; no one wants to manage an inadequately staffed program. We propose, therefore, that the normal teaching load for everyone in the department be agreed to be half graduate and half undergraduate teaching. This definition should be extended to everyone on the departmental budget: joint appointees, visiting professors, etc. As soon as there are a couple of exceptions to this understanding, there will be more. Then the management of the undergraduate program will break down, and it will revert or default to the Department Head, and that is what we are trying to stave off.

The particular organization we have in mind is as follows.

The central functions (budgeting, space, leaves, relations with the MIT hierarchy, etc.) will be in the hands of the Department Head and an Associate Head namely PAD [Peter A. Diamond]). In addition, one of them (probably ECB [E. Cary Brown]) will be an ex officio member of the Committee on Undergraduate Studies to be proposed below, and the other will be an ex officio member of the Committee on Graduate Studies. The precise division of labor is obviously a matter of taste; for the moment, ECB [E. Cary Brown] will probably do most of the relations with the MIT structure and PAD [Peter A. Diamond] will concentrate on intra-departmental matters.
There will be a Director of Undergraduate Studies (PT [Peter Temin]), who will be chairman of a Committee on Undergraduate Studies (with 2 or 3 additional members, possibly RD [Rudiger Dornbusch], PJ [Paul Joskow] and one other). This committee will be responsible for revisions of the undergraduate curriculum adding and subtracting subjects, staffing them, degree requirements, etc. In recent discussions with the Undergraduate Economics Association, the proposal has merged that there should be a larger number of Undergraduate Advisors (i.e., registration officers) than there is now, with each taking care of at most 10 students. That suggests we would need about 8 such advisors. The members of the Committee might serve as advisors, plus others. Merely serving as registration officer for 10 undergraduates is by itself not an onerous job.
There seems to be no need for change in the organization of graduate studies in the department. We suggest that there be a Director of Graduate Studies (RSE [Richard S. Eckaus]) and a Committee on Graduate Studies which would, as now, consist of the other two Graduate Registration Officers. Things are going very well now with REH [Robert E. Hall] handling the first-year students. MJP [Michael J. Piore] the second-year students and RSE [Richard S. Eckaus] the thesis-writers. REH [Robert E. Hall] is prepared to take on the task or devising a scheme to keep track of post-generals students, and see that they find themselves a reasonable thesis topic in a reasonable amount of time. The scheme may need another person to look after it.
We suggest the creation of Committee on Staffing whose functions would include looking after the hiring of assistant professors, the dovetailing of visiting professors with faculty leaves, and the rationing of visiting scholars. The picture we have is that the members of committee would do the interviewing and preliminary screening of new Ph.D.’s at the annual meetings, and decide which of them to invite to come and give seminars. At that stage and thereafter, the whole department faculty would be in on the act, and final decisions would be made, as they are now, in a department meeting. The main time-consumer for this committee would be the correspondence in connection with hiring. Since that would fall on the Chairman, that post would be a major one. For the other members of the committee, the burden would be relatively light. We suggest REH [Robert E. Hall] as chairman, plus perhaps 3 others.
There seems to be no reason to change the way the Admissions Committee now functions.
We see no need for major change in the Placement process. Our only suggestion are (a) perhaps to provide EDD [Evsey D. Domar] with another person to share the load, and (b) to have a pre-season department meeting, analogous to the post-generals meeting, at which each graduate student entering the market could be discussed by the full facuIty, and information and ideas collected.
There are other details. RLB [Robert L. Bishop] is functioning as advisor to MIT undergraduates thinking about economics as part of their Humanities requirement, and we are happy to preserve that human capital. MAA [Morris A. Adelman] who has been our representative to CGSP is to begin a term on the CEP, which should count as a major administrative burden. We need his successor on CGSP.

One last point: we hope that each committee chairman will promptly send a written notice of each substantive decision to the Head and Associate Head for distribution to the department faculty, so that communications are well looked after. That plus rational expectations should do the trick.

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

__________________________

DEPARTMENTAL ADMINISTRATIVE RESPONSIBILITIES:
ECONOMICS DEPARTMENT 1977-78

UNDERGRADUATE COMMITTEE

Chairman:	Peter Temin
Members:	Cary Brown	Senior Faculty Counsellor, Ex Officio
	Jerry Rothenberg	Senior Faculty Counsellor
	Peter Temin	Senior Faculty Counsellor
	Rudiger Dornbusch	Junior Faculty Counsellor
	Jeffrey Harris	Junior Faculty Counsellor
	Jagdish Bhagwati	Sophomore Faculty Counsellor (Fall)
	Henry Farber	Sophomore Faculty Counsellor (Spring)

Summer Jobs: Jeffrey Harris
Humanities Adviser: Robert Bishop
Transfer of Credits: Cary Brown

GRADUATE COMMITTEE

Chairman:	Richard Eckaus	Thesis, Graduate Registration Officer
Members:	Paul Joskow/Mike Piore	Second Year Graduate Registration Officer
	Marty Weitzman	First Year Graduate Registration Officer
	Jerome Rothenberg	CGSP Representative
	Stan Fischer, Ex Officio

Admissions Committee:

Chairman: Robert Bishop
Members: Frank Fisher and Lance Taylor

Placement: Evsey Domar
Harvard-MIT Theory Seminar: Eric Maskin
Theory Workshop: Kevin Roberts

OTHER DEPARTMENTAL ACTIVITIES

Staffing Committee: Chairman: Rudiger Dornbusch

(For New Ass’t Profs.) Members:

Paul Joskow
Jerry Hausman
Stan Fischer, Ex Officio
(Added for Temporary Visitors: Robert Solow)

Independent Activity Period: Jeffrey Harris/Marilyn Simon
Unstructured Subjects Committee: Peter Temin, Undergraduate; Richard Eckaus, Graduate
Computer Allocation: Richard Eckaus

ADDENDUM: INSTITUTE COMMITTEES

CEP: Morris Adelman
Associate Chairman of the Faculty: Michael Piore
Visual Arts: Jerry Rothenberg
Library System, Chairman: Evsey Domar

Image Source: For this portrait of members of the M.I.T. economics department in 1975 see the Economics in the Rear-view Mirror post that provides identifications.

Tags Adelman, Bhagwati, Bishop, BrownEC, Diamond, Domar, Dornbusch, Eckaus, Farber, Fischer, FisherFM, HallR, HarrisJE, Hausman, Joskow, Maskin, Piore, RobertsK, Rothenberg, Solow, TaylorLD, Temin, Weitzman

Chicago Funny Business Harvard M.I.T. Princeton

M.I.T. Faculty Skit, Playing Monopoly at Lunch, 1986

Post author By Irwin Collier
Post date 2021-05-14

It has been a while since I have added an artifact to the MIT economics skits wing of the Funny Business Archives here at Economics in the Rear-view Mirror. Apparently the following script was a, if not the sole, late-20th century MIT faculty skit not written by Robert Solow. I can believe that. In any event, today’s post is further grist to the mill for social historians of economics.

Again a grateful tip of the hat to Roger Backhouse is in order.

__________________

1986 FACULTY SKIT

(Skit opens with Dornbusch, Fischer, Diamond, Eckaus and McFadden seated around MONOPOLY board. Farber is standing alongside, watching the game. Fisher and Hausman are in the wings to make walk-on appearances).

ANNOUNCER: One of the most important unwritten rules in the Economics Department is that no one but Bob Solow writes the skit. This year, Bob reportedly outdid himself and wrote a sitcom in which Bob Lucas is struck by a blinding light while driving to work and transformed into a neo-Keynesian. The skit, titled “I’m OK, You’re OK,” follows Lucas’ attempts to explain why he is estimating Phillips curves to Lars Hansen and Tom Sargent.

Unfortunately, Bob is unable to be with us tonight, since he is delivering the presidential address to the Eastern Economic Association in Philadelphia. When we opened the envelope marked “SKIT” which Bob left for us, we were surprised to discover only a copy of his presidential address. We suspect he had a somewhat bigger surprise when he opened his envelope in Philadelphia. [Address published as “What is a Nice Girl Like You Doing in a Place Like This? Macroeconomics after Fifty Years” Eastern Economic Journal, July-September 1986]

We were of course scared skitless when we realized our predicament, and we were tempted to re-run some of the great Solow skits of the past. There was the 1974 Watergate Skit, in which Paul Colson Joskow testifies to Senator Sam Peltzman that he would run over his grandmother to get a t-statistic above two. There was the 1978 Star Wars skit, in which Milton Vader and his minions capture the wookie Jerrybaca and hold him captive in the Chicago Money Workshop. And in the incredible 1973 MASH skit, Hawkeye Hall and Trapper Jerry Hausman find Radar Diamond and Hot Lips Friedlaender cavorting in the Chairman’s office. (If that doesn’t give Solow Rational expectations, what does?)

We guessed that you had all seen these re-runs on late-nite channel 56, however, and therefore decided to try something new and provide a partial answer to the age-old question: What Really Goes On in the Freeman Room at Lunchtime on Wednesdays? We now invite you to join us for a brief look at one of these infamous gatherings…

MCFADDEN: (Rolling dice). “Who owns Oriental Avenue?”

DORNBUSCH: Me. That’s six dollars.

FISCHER: My turn? (Rolls dice). Damn. Inflation tax again; Here’s ten percent of my cash balances. I passed go, didn’t I?

DIAMOND: Uh huh. Here’s $186 dollars.

FISCHER: I should get $200.

DIAMOND: Not since Gramm-Rudman. Everything’s reduced seven percent across the board.

DORNBUSCH: My turn. (Rolling dice). Four. (Reaches over and moves marker).

ECKAUS: No way, Rudi—you just moved six places. No overshooting in this game. (Hands Dornbusch Chance card)

DORNBUSCH: Ah. Go directly to Brazil. Do not return until the day classes start.

HAUSMAN: (Walking in from side of stage) How come you guys are playing MONOPOLY? I thought you usually played RISK…

DIAMOND: Oliver [Hart] took that game home. You know, his contract calls for RISK-sharing…

HAUSMAN: Can you believe the graduate students scheduled the skit party for the Friday before income taxes are due? The only people who’ll come are graduate students and people like theorists who file 1040 EZ’s. (walks off)

(FISHER walks in)

DIAMOND: (Rolling dice). My turn. Oriental again. Six more dollars for Dornbusch.

FISCHER: That’s a pretty profitable property, Rudi.

FISHER: How many times do I have to say it! You can’t possibly tell that from accounting numbers! (Pause). Why don’t we ever play fun games, like Consultant?

ECKAUS: I hear Jorgensen and Griliches play that all the time up at Harvard. Maybe you should give them a call.

FISHER: They’re never around.

DIAMOND: Of course not, Frank—that’s how you play consultant.

(FISHER exits.)

FARBER: Speaking of Harvard, how are we doing on graduate recruitment this year? I heard there was some Princeton scandal.

DIAMOND: The AEA put them on probation for recruiting violations. People could look the other way when they offered prospective students money and cars, but this year Joe Stiglitz promised to write a joint paper with all entering students.

FARBER: They’re really giving out cars?

DIAMOND: Sure. Yugo’s.

FARBER: All I got was a motorcycle…

MCFADDEN: Harvard and Princeton have been dumping all over us. Every prospective student has heard that Jerry Hausman cashed in his Frequent Flyer miles for a 727. And some even know that Marty Weitzman has a Harvard offer.

FISCHER: Well, that offer was certainly no surprise. The Harvard deans read THE SHARE ECONOMY and decided they should hire more workers.

DIAMOND: Still, we’re getting the best students. This morning I signed a Yale undergrad by offering him Solow’s office. I figured Bob can share E52-390 with Krugman, Eckaus, and Farber next year. But what happens when we run out of river-view offices?

FARBER: How’s Harvard doing on recruiting?

ECKAUS: Not too well. They’re on a big kick to look relevant. Mas-Collel’s going nuts—Dean Spence has a new rule that any agent in a theoretical model has to have a proper name. Andreu’s having real problems with his continuum papers…

MCFADDEN: I hear the Kennedy School’s helping their visibility. Have you heard about the new Meese Distinguished Service Medal?

DIAMOND: No. Who’s getting them?

MCFADDEN: Sammy Stewart for Distinguished Relief Pitching,
Martin Feldstein for Distinguished Empirical Work,
Larry Summers for Distinguished Dress,
NASA for distinction in Travel Safety,
Bob Lucas and Bob Barro for Distinguished Plausible Assumptions,
Ferdinand Marcos for Distinguished Contributions to Charity,
and John Kenneth Galbraith for Distinguished Use of Mathematics.

DORNBUSCH: Harvard’s visibility campaign’s paying off. Just last week one of their junior guys hit the cover of PEOPLE magazine with a paper about marriage rates among movie stars.

FISCHER: You read PEOPLE?

FARBER: The National Enquirer had a story about a Harvard student who claimed to have a picture of Jeff Sachs in Littauer. Just like the old days with Howard Hughes…

DORNBUSCH: Perhaps we should return to the game.

(MODIGLIANI walks on).

DIAMOND: My turn again? (Rolls dice and moves piece). Community Chest. (Looking at card) You are elected department head. Lose three turns.

(Someone walks up and hands DIAMOND a telephone message. He stands up.)

DIAMOND: I nearly forgot. I’m scheduled to join Mike Weisbach who is taking a prospective student windsurfing this afternoon. Figured it was the least I could do to convince him we were as laid back as Stanford. Franco—do you want to take my place?

MODIGLIANI: (Sitting down in Diamond’s place) So, what are the new developments on the Monopoly front? [Famous Modigliani paper “New Developments on the Oligopoly Front,” JPE, June 1958] (Pause) Now, which of these pieces is Peter’s?

MCFADDEN: The coconut. [Reference here to Diamond’s coconut model of a search economy.]

MODIGLIANI: My turn now?

FISCHER: No Franco—but go ahead. [presumably a reference to Modigliani’s propensity to talk, and talk, and talk.]

MODIGLIANI: (Rolls dice and moves marker). Chance. (McFadden hands him a card). What is this? You have won second prize in a Beauty Contest, Collect $10? This is NOT POSSIBLE. This year I win only FIRST PRIZES [reference to 1985 Nobel Prize for Economics].

DORNBUSCH: (To audience) Wait till he gets the bequest card… [cf. the JEP Spring 1988 paper by Modigliani that surveys the bequest motive]

FISCHER: Franco, I have a deal for you. I’ll trade you Mediterranean and the Water Works for North Carolina and an agreement that you never charge me rent on either property. If you renege, I’ll order Chinese food.

MODIGLIANI: No deal. But what’s this about Chinese food?

FISCHER: It’s a new thing I learned from Garth [Soloner]—it makes the deal sub-gum perfect.

MCFADDEN: My turn. (Rolls and draws a Chance card). My favorite card: Advance Token to the Railroad with the Highest Logit Probability Value. Let me see which one that is… (pulls out a calculator)

FISCHER: While we’re waiting for Dan to converge, how did we do in junior hiring? Did we get that Princeton theorist?

ECKAUS: No dice. All the Princeton guys told him not to come.

DORNBUSCH: Why?

ECKAUS: They said “Go to Yale, go directly to Yale.”

MODIGLIANI: What about senior appointments?

FARBER: Ask Peter [Temin]. He’s on the Search Committee.

MCFADDEN: (Looking up from calculator). I’m having convergence problems. Maybe we should postpone the game for a few minutes while I run down to the PRIME.

[the image of the last page at my disposal is very blurred, fortunately it is only the wrap-up by the announcer]

ANNOUNCER: As you all know, NOTHING takes a few minutes on the PRIME. So until next year, when the [?] [?] Solow who accompanied Stan, 3PO and R2D2 to [?] the [?] [?] from Chicago returns to produce another skit. Good night.

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Robert M. Solow, Box 83.

Tags Barro, Diamond, Dornbusch, Eckaus, Farber, Feldstein, Fischer, FisherFM, Friedlaender, Galbraith, Griliches, Hall, HansenL, HartO, Hausman, Jorgensen, Krugman, Mas-Colell, McFadden, Modigliani, Peltzman, Sachs, Saloner, Sargent, Solow, Spence, Stiglitz, SummersL, Temin, Weisbach, Weitzman

Economics Programs M.I.T. Regulations

MIT. Revising Economics Ph.D. General Examinations. E.C.Brown, 1975

Post author By Irwin Collier
Post date 2021-02-12

What makes this memo from E. Cary Brown particularly useful is that it provides us with a list of the graduate economics fields along with the participating faculty members as of 1975. Also the major revision proposed was to have a system of two major fields (satisfied with general examinations) and two minor fields (satisfied by course work). Interesting to note that graduate student input was clearly integrated into the revision procedure.

________________________

Memo from Chairman E. Cary Brown
on a Revision of General Exams, 1975

April 28, 1975

To: Economics Department Faculty and Graduate Students
From: E. C. Brown
Re: Revision of General Examinations

While it has been left that a Committee would be appointed to review the procedures of the general examination (see minutes of the Department Meeting of April 23, 1975), further informal discussion has moved toward a proposed concept of these examinations that I am submitting for consideration and agreement.

There seems reasonable satisfaction about the structure of the present examinations, subject to clarification of the final 2 field examinations and their relationship to the 2 field write-offs.
It is proposed that the 2 fields satisfied by passing the “general” examinations be designated major The examination will be offered in a field, will cover the field in a general way, and will be separated from course examinations. Minor fields will be satisfied by course work. A somewhat lower standard will be imposed in minor fields than in major fields. The “generals” examination, therefore, would apply to the fields of the candidate’s expected expertise, and emphasis would be on a broad coverage of the field.
Each field should, therefore, describe its general requirements for the field as a major one, and list the subjects that may reasonably be offered as a write-off to satisfy the field as a minor one. There should also be some details on the requirements when fields are closely linked (e.g., the proposal for the transportation field and its relationship to urban economics).
Assuming this proposal to be agreeable, the question of term papers still needs settling.

I propose, therefore, the following procedures:

Would each of you give Sue Steenburg a list of your graduate subjects for this academic year, with an indication of whether or not a term paper was required and, if so, the percentage of final grade it represented.
Would faculty in each field submit a list of subjects that may be used to satisfy major and minor requirements in their field as it would ultimately appear in the brochure. The fields to be covered are as follows, the faculty in the field are listed, and the responsible member underlined.

Advanced Economic Theory	Bishop, Diamond, Solow, Fisher, Samuelson, Varian, Hausman, Weitzman
Comparative Economic Systems	Domar, Weitzman
Economic Development	Eckaus, Bhagwati, Taylor
Economic History	Kindleberger, Temin, Domar
Finance	Merton
Fiscal Economics	Diamond, Friedlaender, Rothenberg, Brown
Human Resources and Income Distribution	Thurow, Piore
Industrial Organization	Adelman, Joskow
International Economics	Kindleberger, Bhagwati
Labor Economics	Piore, Myers, Siegel
Monetary Economics	Fischer, Modigliani
Operations Research	Little, Shapiro
Russian Economics	Domar, Weitzman
Statistics and Econometrics	Hall, Hausman, Fisher, Kuh
Transportation	Friedlaender, Wheaton
Urban Economics	Rothenberg, Wheaton

If there are any difficulties with these suggestions, let me know right away. If we can proceed along these lines, it appears to be simply a clarification of our recent past and a substantial timesaver. The reports can be looked at this summer by a student-faculty group, with responsibility for faculty on me and for students on Dick Anderson.

Source: M.I.T. Archives. Department of Economics Records, Box 2, Folder “Grad Curriculum”.

Image with identifications: Economics Faculty group portrait, 1976.

Tags Adelman, Bhagwati, Bishop, BrownEC, Diamond, Domar, Eckaus, FisherFM, Friedlaender, HallR, Hausman, Joskow, Kindleberger, Kuh, MertonRC, Modigliani, Myers, Piore, Rothenberg, Samuelson, Shapiro, Siegel, Solow, Soloway, TaylorFW, Temin, Thurow, Weitzman, Wheaton

Funny Business M.I.T.

M.I.T. Dystopian Faculty Skit by Solow,1969

Post author By Irwin Collier
Post date 2020-02-19

The current events of the late ‘sixties are the clear inspiration for this somewhat dark, dystopian skit for the M.I.T. economics departmental Christmas party of December 1969. According to the cover page, it was written by Robert Solow with input from Frank Fisher.

The skit was transcribed from the typed text [that includes a short handwritten addition] from Robert Solow’s papers in the Economists’ Papers Archive at Duke University. A grateful tip of the hat to Roger Backhouse for this artifact that should keep a cultural historian of economics busy for a few hours and be worth a few minutes of procrastination for working economists.

Pro-tip: you can summon all of the Economics in the Rear-view Mirror posts with economic humor content using the keyword “Funny Business”:

https://www.irwincollier.com/category/funny-business/

_______________________

Back-story for selected references in the text

SPECTRE. In Ian Fleming’s world of James Bond the acronym for the organization of international evil [Special Executive for Counter-intelligence, Terrorism, Revenge and Extortion].

Chairman Edel. Assistant Professor Matthew D. Edel (Yale, Ph.D.) taught the course Economic Growth and Development. Presumably pronounced to rhyme with “Fidel”. Edel was a regional expert for Latin America, spoke at a colloquium February 4, 1970 on “The Strategy of Cuban Economic Development”

14.463 Monetary Economics in term I, 1969-70 was taught by four instructors.

According to the staffing report for that term in the departmental records at the MIT archive.

Karen H. Johnson, M.I.T. Ph.D. (1973),
Robert K. Merton, M.I.T. Ph.D. (1970), advisor Paul Samuelson
David T. Scheffman, M.I.T. Ph.D. (1971), advisor Paul Samuelson
Jeremy J. Siegel, M.I.T. Ph.D. (1971)

There is no record that Bonnie Parker and Clyde Barrow were ever graduate students of economics in M.I.T.

Bread and Roses. Reference to the Women’s Liberation Organization in Boston, 1969-1971. The name chosen in memory of the Great Lawrence Strike of 1912.

Ted Behr. An M.I.T. Ph.D. (1969) who by 2009 had already gone through seven career changes and twelve jobs. Must have been quite a character judging from this interview.

I think we may assume that no Bulgarians were injured in the writing or performance of this skit.

_______________________

Some Obvious Context

Fall 1964. Berkeley Free Speech Movement

Wikipedia Entry on the Protest Year 1968

April 1968. Columbia Student Strike ; Harvard Student Strike

February 1969. Black student strike at the University of Wisconsin

_______________________

RIP VAN SAMUELSON RETURNS TO MIT AFTER THE REVOLUTION
FACULTY SKIT
Christmas 1969

CAST

P. Diamond
R. Eckaus
R. Engle
F. Fisher
C. Kindleberger
M. Piore

SCRIPTWRITER-IN-CHIEF — R. Solow

HELPED BY – F. Fisher

Is it really true that Samuelson has been asleep all these years? Then how come the 13^th and 14^th editions of the textbook came out on time?

Well, I don’t know. Samuelson isn’t talking.

Careful, there. If it’s not talking it’s not Samuelson.

It’s got to be. His broker recognizes his fingerprints from soiled sell orders. Actually, there are two schools of thought about how the textbook came out while Samuelson was sleeping. Modigliani claims that the 13^th and 14^th editions were simply forecasted by the FRB-MIT model, using a long lag. But some people believe that the 13^th and 14^theditions are just the 2^nd and 3^rd editions reprinted. Can’t verify that, though. Nobody’s been able to find a copy of the early editions.

Not that it matters. Must be a shock for Paul to realize that nobody uses the text any more, except of course for the Bulgarian translation. They’re the only people reactionary enough to go for that stuff any more.

You mean even Hanoi University has dropped it?

Oh sure, they adopted Best Known Thoughts of Chairman Edel, last year. You know, the one that begins “Equilibrium grows out of a barrel…”

Out of the barrel of a gun?

No, no, a barrel of rum. Chairman Edel never got over that trip to Cuba.

Did you fellows hear that Samuelson is back? When did he disappear anyway?

Oh, a long time ago. Even before Chomsky became President. It’s hard to know the exact date. Things were pretty clear up until April 1972, when we were supposed to have 31 days of moratorium, but the month only had 30 days, so we cancelled the first day of May, only you couldn’t cancel May Day — Christmas you could cancel, but not May Day. So we cancelled the second day of May. But then we were three days short to fit in the 32 days of moratorium for that month, so we had to run into June. From then on it was chaos.

Things are still a little funny. I can’t get used to having summer vacation in the middle of winter, and Fisher pretending to go off skiing when it’s 90 degrees in the shade, when we all know he’s leading rent strikes anyway.

Don’t complain. It might have been worse. Solow claimed to have a proof that the term would never end once we got up to 32 moratorium days a month. But one of the younger mathematical economists made a brilliant application of the theory of Riemann surfaces and showed that you could pack any finite number of moratorium days into one month if you did it right.

It was the last article anyone published in this department. Can you remember when we used to write articles and hope for tenure? That was before tenure was abolished. God, life was easy then. Nowadays it’s all action, action, action. And if you’re lucky, if you happen to win a rent strike, or destroy some draft records, or win an amateur topless contest, then maybe the central committee of SPECTRE will keep you on for a year. But suppose you lose the strike, or you let a white man go to work on a construction site, boy that SPECTRE can be tough. You remember when they threw Domar into the arena with Kampf and gave Kampf the bullhorn?

I looked away. Bloodthirsty crew — they awarded Kampf both ears and the tail that day. We had to take up a collection to send Ricky and Alice [note: Evsey Domar’s daughters] to Bread and Roses Karate School. And today they’re members of SPECTRE, the Student Power Electoral Committee for Teachers of Relevant Economics. It was better in the old days when appointments went on good looks and amiability. Even publishing was better than action all the time. That last piece of work I did, keeping the recruiter for Mars Bars from getting onto the campus, it went well but it was exhausting.

Why are we against Mars Bars?

Space, military, it’s all the same.

Anyhow, now that he’s back, what’s Paul going to do around the department? He’s getting a little old for real action, and he might find it hard to pass the monthly Relevance Check.

It’s going to be a problem. He was falling behind the times when he went to sleep. Of course he looks better now, with 10-15 years growth of beard, but he doesn’t dig the revolution. El Lider Maximo of the Graduate Student Commune asked him what he could contribute, and Samuelson said he’d like to teach the History of Economic Thought.

The History of WHAT???

That’s exactly what the Commune Lider said.

Poor old Samuelson doesn’t know that Thought isn’t Relevant. In fact he didn’t even know that Economics isn’t Relevant. When El Lider explained that it was all action now, old Samuelson said he thought there should be both Thought and Action just so their marginal net productivities were equal.

Gad, I haven’t heard anything like that since the day they fired Diamond for saying “Pareto-optimal” once too often.

Whatever happened to Diamond?

What else, he’s at B.I.T., the Bulgarian Institute of Technology. Boy, if the old stuff ever comes back in style, those Bulgarians will have it made. But go on, what happened when Samuelson pulled that bourgeois bit about marginal whatnots?

Well, Solow was standing there and he muttered something to Samuelson—it sounded like “Check the second-order conditions, Paul old boy”—and then went back to trying to look hip.

That’s living dangerously. Solow just barely passed last month’s Relevance Check, and he hasn’t been on a successful action in a long time. I don’t think that went over so good when he claimed that skiing Black Mountain was a real action. He better watch out — if B.I.T. won’t take an old man like that, SPECTRE may throw him to Kampf.

Right on. Nothing gets past El Lider. When Solow whispered that to Samuelson about second-order conditions, El Lider asked him right away — Did you say something? Solow replied Negative. Definite. That’s really living dangerously — I think it’s code of some kind.

It certainly doesn’t sound Relevant. I haven’t read anything like that in Ted Behr’s Newsweek column, at least not lately.

What’s going on this week in the department?

In the Theory course we’re holding an obstructive picket line at the drug counter of the Tech Store. Somebody discovered they were selling only white pills.

If I know what the pills are for, I hope the picket line isn’t too obstructive.

Of course not; I told you it was the Theory course. Then in the Economics of Education course we’re going to burn down a school. In the Money course, Johnson, Merton, Siegel, Bonnie, and Clyde are going to rob a bank and distribute the proceeds to the C.L.F.

Is that the California Liberation front?

Oh no, Berkeley has been a free-fire zone for months; nobody is left. It’s the Center for Love and Finance, our answer to the profit motive. Has anyone told you what the Econometrics Commune is doing?

No. Last week somebody had an idea for an empirical paper, but the results only came out at the 10% Relevance Level and half the commune was purged for Type One Error.

Served them right. Any Type II Error executions?

You know we have to have public trials for Type II error.

That’s right—Power to the People…. Well, it’s nice to see that the action curriculum is moving along. Sure beats the Old Days before chairman Edel — remember when they taught about Indifference curves? INDIFFERENCE curves, mind you, with innocent people being napalmed in Laos, Birmingham, Princeton, they taught about indifference curves.

Hard to believe. Of course now, ever since we adopted Bohmer’s best-selling text Economics for Good Guys we handle all that stuff by the tangency of the Relevance Map and the Isoconcern lines. Makes all the difference in the world, takes the subject out of the mind and puts it back in the gut, where it obviously belongs.

The Admissions Commune has been meeting all day.

How does the entering Movement look?

Terrific. There’s one girl who was heavyweight sugar-cane-cutting champion of the Big Ten, and another who had already led three successful rent strikes as a junior — two of them publishable, according to her advisor. Then there are a couple of Black Belts from Bread and Roses — they come on Karate Scholarships of course.

Any amateur topless contest winners?

We’re trying for a few, but most of them will go to Harvard—ever since they hired Brigitte Bardot for the economics faculty—

She was past her peak.

Peaks. And aren’t they all? Anyhow, all the amateur topless winners go to Harvard. But we’ve got some applicants who’ve starred in home movies. Not to mention a few school-burners and a couple of guys who have specialized in destroying computers.

How are their vibrations?

Good.

Fine. If there’s anything I can’t stand it’s bad vibrations. How about GRE scores.

The Graduate Relevance Exam grades just came — most of the people we’re accepting are in the 800’s on Obstructive and at least 750 in Vituperative. Looks like a good class — I mean Movement.

Has anyone heard what the Placement and Appointments Committees have decided?

They decided to eliminate the middleman and merge. That way everybody stays forever — once a Commune always a Commune. It gives new meaning to that old phrase about departmental inbreeding.

We still have this problem about what to do with Samuelson. Here he is after all those years asleep and hardly knowing anything about action and relevance and all the new things. The Bulgarians won’t take him — B.I.T. doesn’t mind using the old textbook, but they’re overloaded with these old-timers. If we can’t find something for him to do we may have to throw him to….

Terrible news. The students are revolting again. There’s a new movement sweeping all the Communes. They want one day of classes this month, two days of classes next month, three days the month after…there’s no telling where it will end, except that nobody can count over 30 any more.

Gad, we may have to go back to teaching again. Well, at least that gives something for Samuelson to do.

Oh didn’t they tell you. When Samuelson saw what the new system was like, he went back to sleep. Better get the Bulgarians on the phone.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Robert M. Solow, Box 83.

Image Source: Robert Solow in his office, MIT Museum Website.

Tags BehrT, Diamond, Domar, Eckaus, EdelMD, Engle, FisherF, JohnsonKH, Kindleberger, MertonRK, Modigliani, Piore, Samuelson, ScheffmanD, SiegelJ, Solow

Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. National Income and Employment Theory. Readings and Final Exam. Domar, 1960-61

Post author By Irwin Collier
Post date 2019-05-17

For this post I have transcribed Evsey Domar’s graduate core macroeconomics course outline/reading list along with the questions for the final examination from the first term of the 1960-61 academic year at M.I.T. Students from both course XIV (economics) and XV (management) took this course.

Note: Evsey Domar distributed a questionnaire to the students to obtain feedback on his course. The next post provides the results from that survey. It is fairly apparent that Domar did not cover the last topic on the course reading list (economic growth).

Final exam grade distribution (50 exams)

A 16%
A- 12%
B+ 10%
B 20%
B- 14%
C 18%
D 8%
F 2%

Fun Fact. Among the students enrolled in the course and who took the final examination: Michael D. Intriligator, Peter A. Diamond, Ann Fetter Friedlaender, and Stephen Goldfeld.

The much expanded course reading list/bibliography and both the midterm and final examinations from the 1965-66 academic year have been posted earlier.

_________________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

THEORY OF NATIONAL INCOME AND EMPLOYMENT
14.451 Reading List
E. D. Domar Fall Term 1960-61

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.

Items marked with an * are strongly recommended. (I don’t like to use the expression “required” in a graduate reading list.)

No term paper will be required, but each student is expected, in addition to his general reading, to choose one of the eight major divisions of the course (except that Part VIII should not be taken without prior consultation with the instructor) as a field of concentration. A part of the final examination will be designed to test his broader knowledge of the chosen field.

I. NATIONAL INCOME AND RELATED ITEMS

*Kuznets, S., National Income and Its Composition, (New York, 1941), particularly Vol. 1, Chapter 1

*Jaszi, G., “The Statistical Foundations of the GNP,” Review of Economics and Statistics, Vol. 38, 1956)
Ruggles, R. and N., National Income Accounts and Income Analysis (New York, 1956)

*U.S. Department of Commerce, U. S. Income and Output, A Supplement to the Survey of Current Business, 1958

*National Bureau of Economic Research, The National Economic Accounts of the United States, Review, Appraisal and Recommendations, General Series 64, Washington, 1958

Ruggles, “The U.S. National Accounts,” American Economic Review, March, 1959
Organization for European Economic Co-operation, 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

Nove, A., “The United States National Income A La Russe,” Economica, Vol. 23, 1956

Gilbert, M., Comparative National Products and Price Levels, A Study of Western Europe and the United States, Organization of European Economic Cooperation, Paris, 1958

*Leontief, W. W., “Output, Employment, Consumption and Investment,” Quarterly Journal of Economics, Feb., 1944

Leontief, W. W. The Structure of American Economy (New York, 1951)

*Dorfman, R., “The Nature and Significance of Input-Output,” Review of Economics and Statistics, Vol. 36, 1954

Stewart, I. G., “The Practical Uses of Input-Output Analysis,” Scottish Journal of Political Economy, Vol. 5, (Feb. 1958)

Dosser, D. and A. T. Peacock, “Input-Output Analysis in an Under-Developed Country: A Case Study,” Review of Economic Studies, Vol. 25, Oct. 1957

*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, pp. 253-89

Board of Governors of the Federal Reserve System, Flow of Funds in the United States 1939-53 (Washington, D. C., 1955)

II. GENERAL AGGREGATIVE SYSTEM

Students without prior training in this field are advised to study D. Dillard, The Economics of John Maynard Keynes (New York, 1948), A. H. Hansen, A Guide to Keynes (New York, 1953), or K. Kurihara, Introduction to Keynesian Dynamics (New York, 1956).

*Keynes, J. M., The General Theory of Employment, Interest and Money (New York, 1936)

*American Economic Association, Readings in Business Cycle Theory (Philadelphia, 1944), Essays 5, 7

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

*Kurihara, K. K., Post Keynesian Economics (New Brunswick, N. J., 1954), essays 1, 11*

*American Economic Association, Readings in the Theory of Income Distribution (Philadelphia, 1946), essay 24

Klein, L. R., The Keynesian Revolution, (New York, 1947), chapters 3-5.

Ellis, H. S., A Survey of Contemporary Economics (Philadelphia, 1948), Vol. 1, chapter 2

*Income, Employment and Public Policy, Essays in Honor of Alvin H. Hansen (New York, 1948), essay I

*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

Patinkin, D., Money, Interest, and Prices (Evanston, Ill., 1956).

III. THEORY OF INTEREST

Readings in the Theory of Income Distribution, essays 22, 23, 26

*Hicks, J. R., Value and Capital (Oxford, 1957), Chapters 11-12

Readings in Monetary Theory, essays 6, 11, 15

*Gurley, J. G., and E. S. Shaw, “Financial Aspects of Economic Development,” American Economic Review, September, 1955)

Hart, A. G., Money, Debt and Economic Activity, Second Ed., (New York, 1953)

Patinkin, D., “Liquidity Preference and Loanable Funds: Stock and Flow Analysis,” Economica, Vol. 25, November, 1958

Patinkin, D., Money, Interest, and Prices (Evanston, Ill., 1956).

*Lydall, H., “Income, Assets, and the Demand for Money,” Review of Economics and Statistics, Vol. 40, Feb. 1958

Lutz, F. A., “The Interest Rate and Investment in a Dynamic Economy,” American Economic Review, Dec. 1945

See also Section VI — INVESTMENT DECISIONS

IV. CONSUMPTION FUNCTION

*Duesenberry, J. S., Income, Saving, and the Theory of Consumer Behavior (Cambridge, Massachusetts, 1949)

Haley, B. F., A Survey of Contemporary Economics (Homewood, Illinois, 1952), Vol. II, essay 2

Davis, T. E., “The Consumption Function as a Tool of Prediction,” The Review of Economics and Statistics, August 1952

Heller, W. W., Boddy, F. M., and C. L. Nelson, Savings in the Modern Economy, a Symposium (Minneapolis, 1953)

*Friend, I., and S. Schor, “Who Saves?,” The Review of Economics and Statistics, Vol. 41, May, 1959, Part 2

*Friend, I., and I. B. Kravis, “Entrepreneurial Income, Saving and Investment,”American Economic Review, June, 1957, pp. 269-301

Zellner, Arnold, “The Short-Run Consumption Function,” Econometrica, (Oct. 1957

*Ferber, R., “The Accuracy of Aggregate Savings Functions in the Post-War Years,” Review of Economics and Statistics, Vol. 37, May, 1955

*Tobin, J., “On the Predictive Value of Consumer Intentions and Attitudes,” The Review of Economics and Statistics, Vol. 41, Feb., 1959

Dennison, E. F., “A Note on Private Saving,” Review of Economics and Statistics, August, 1958
Post-Keynesian Economics, essay 15

Friedman, M., A Theory of the Consumption Function (Princeton, N. J., 1957)

Friedman, M., and G. Becker, “A Statistical Illusion in Judging Keynesian Models,” Journal of Political Economy, Vol. 65, Feb., 1957

Klein, L. R., “The Friedman-Becker Illusion,” Journal of Political Economy, Vol. 66, Dec., 1958

Morgan, J. N., Consumer Economics (New York, 1955)

Katona, G., and E. Mueller, Consumer Expectations 1953-56 (Ann Arbor, Michigan, 1956)

Klein, L. R., ed., Contributions of Survey Methods to Economics (New York, 1954)

V. MULTIPLIER AND ACCELERATOR

*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 11-12

*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

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

*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

*Tsiang, S. C., “Accelerator, Theory of the Firm, and the Business Cycle,” Quarterly Journal of Economics, Vol. 65, 1951

*Tinbergen, “Statistical Evidence on the Acceleration Principle,” Economica, Vol. 5, 1938

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

VI. INVESTMENT DECISIONS

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

*Pitchford, J. D. and A. J. Hagger, “A Note on the Marginal Efficiency of Capital,” The Economic Journal, Vol. 48, 1958

*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, Feb., 1940, pp. 32-73

Sayers, R. S., “Business Men and the Terms of Borrowing,” Oxford Economic Papers, Feb., 1940, pp. 23-31

*White, W. H., “Interest Inelasticity of Investment Demand—The Case from Business Attitude Surveys Re-examined,” American Economic Review, Sept. 1956, pp. 565-587

Brockie, M. D., and A. L. Gray, “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 Capital 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).

*Duesenberry, J., Business Cycles and Economic Growth (New York, 1958), Chapters 1-8

Meyer, John R., and Edwin Kuh, The Investment Decision (Cambridge, Mass., 1957)

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, Dec., 1958

Wilson, T., “Cyclical and Autonomous Inducements to Invest,” Oxford Economic Papers, Vol. 5, 1953

Hirschleifer, J., “On the Theory of Optimal Investment Decision,” The Journal of Political Economy, Vol. 66, Aug., 1958

Lydall, H. F., “The Impact of the Credit Squeeze on Small and Medium Sized Manufacturing Firms,” Economic Journal, Vol. 47, Sept., 1957

*Penrose, E., “Limits to the Growth and Size of Firms,” American Economic Review Papers and Proceedings, May 1955, pp. 531-43

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

*Foss, M. F., and V. Natrella, “Ten Years’ Experience with Business Investment Anticipations,” Survey of Current Business, January, 1957

*Foss, M. F., and V. Natrella, “Investment Plans and Realizations—Reasons for Differences in Individual Cases,” Survey of Current Business, June, 1957

See also III—THEORY OF INTEREST and V—MULTIPLIER AND ACCELERATOR

VII. PRICE FLEXIBILITY AND EMPLOYMENT

*Pigou, A. C., “The Classical Stationary State,” Economic Journal, Dec., 1943

*Lange, O., Price Flexibility and Employment (Bloomington, Indiana, 1944)

*Friedman, M., “Lange on Price Flexibility and Employment,” American Economic Review, Sept., 1946

Readings in Monetary Theory, Essay 13

Schelling, T. C., “The Dynamics of Price Flexibility,” American Economic Review, Sept. 1949

Patinkin, D., Money, Interest, and Prices (Evanston, Illinois, 1956)

Hicks, J. R., “A Rehabilitation of ‘Classical Economics’,” Economic Journal, Vol. 47, June, 1957

*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

VIII. THEORY OF GROWTH

*Domar, E. D., Essays in the Theory of Economic Growth (New York, 1957), Foreword, Essays I, III-V

Fellner, W., Trends and Cycles I Economic Activity, (New York,1956)

Hansen, A. H., Fiscal Policy and Business Cycles (New York, 1941)

*Harrod, R. F., Towards a Dynamic Economics (London, 1948), Part III

Leontief, W. W., Studies in the Structure of the American Economy, (New York, 1953)

Robinson, J., The Accumulation of Capital, (London, 1956)

*Kuznets, Simon, “Towards a Theory of Economic Growth,” R. Leckachman, ed., National Policy for Economic Welfare at Home and Abroad, (New York, 1955)

*Solow, R. M., “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics, Feb. 1956, pp. 65-94

*Solow, R. M., “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics, August, 1957, pp. 312-320

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

_________________________

Economics 14-451
E. D. Domar

FINAL EXAMINATION—Three Hours
January 24, 1961

Please use a separate book for each question.

Part I—One Hour

Write an essay in the field of your concentration as instructed in class. Please be specific.

Part II—Two Hours

Answer the THREE questions which are furthest removed from the topic discussed in Part I. They carry equal weights.

“Thus the rate of interest is what it is because it is expected to become other than it is: if it is not expected to become other than it is, there is nothing left to tell us what it is…”
1. Can you identify the author of this famous statement?
2. Can you recognize whose interest theory he referred to?
3. Explain and evaluate that theory critically.
4. Present your own (original or otherwise) theory of interest.
Write an essay on the subject of “The treatment of intermediate products in:
1. National Income and Product Accounting
2. Input-output method
3. Flow-of Funds system
4. Federal reserve Index of Industrial Production.” (Don’t panic if you can’t do (d), but if you can you’ll get a premium.
  Hint: there is more in this question, and particularly in part (a) than meets the eye. Consider the whole rationale of the methods.
Write a comprehensive essay on the subject of “The Rationale of Investment Decisions.” Consider as many cases as you can, but in each case specify clearly the assumptions made. (Don’t forget to include an undeveloped country case.) Can you generalize?
Write a comprehensive and critical essay on the subject of “Price Flexibility and Employment.” Survey the relevant literature beginning with Keynes’ General Theory, and indicate clearly the nature of the assumptions, the definition of the concepts (hint: money), and the essence of the conclusions. What practical recommendations follow from your discussion?

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 photo at the M.I.T. Museum website.

Tags Diamond, Domar, Friedlaender, Goldfeld, Intriligator

Funny Business M.I.T.

M.I.T. Faculty skit. Robert Solow as the 2000 year old economist.

Post author By Irwin Collier
Post date 2019-01-26

Would Mel Brooks' famous 2,000-Year-Old Man have understood modern language? Researchers say there's a possibility.

A skit in economics typically involves a humor transplant of some sort. The following script from the faculty contribution to an annual M.I.T. economics skit party (ca. 1979-80 which is when Luis Tiant pitched for the Yankees) took its inspiration from two greats in American comedy, Carl Reiner & Mel Brooks, who sometimes performed as interviewer and 2,000 year-old man, respectively.

While it is fairly clear that Robert Solow performed and probably wrote the entire skit, the identity of the interviewer still needs to be established. Hint: there is a comment box at the bottom of this post.

The script comes from a file of such Solovian skits that Roger Backhouse has copied during his archival research and has shared with Economics in the Rear-View Mirror.

_________________

Q: You have probably all heard the interviews with the recently discovered 2000-year-old man. We are fortunate to have with us tonight another great find, the 2000-year-old economist, Robert M. Solow. By the way, Dr. Solow, just what does the M stand for?

A: Methuselah, dummy.

Q: Dr. Solow has seen so many skit parties in his life, that he was not very happy about appearing at this one. Do you remember the first skit party you ever went to?

A: No. Skit parties are like hangovers – best thing to do is forget ’em and swear never to do it again. I do have a hazy recollection of an early skit party, I think it was what the one where I first heard the joke about bordered determinants…

Q: What is the joke about border determinants?

A: I don’t know, but they sure laugh[ed] their fool heads off.

Q: Any other recollections about that skit party?

A: Well, you could hear them building pyramids in the background, I remember, and there was this Sphinx-like object, looked a lot like Dick Eckaus… You don’t suppose that, even then???? Nah, forget it.

Q: Turning to more serious issues, what is the biggest change in economics since the old days?

A: Mechanization, by cracky. First the electric typewriter, then the computer, then the Xerox machine [handwritten insert: but not fast enough for (3 or 4 illegible words)]. Nowadays people write papers at the rate they used to wipe their… glasses. I believe Feldstein has solved the problem of hooking the typewriter directly to the Xerox machine, and the whole paper is reproduced without being touched by human hands. There is even a rumor that he has a secret way of getting the paper written without human intervention…

Q: Come come, Dr. Solow, you don’t believe that.

A: Well, have you looked at any of Feldstein’s recent papers? Now in the good old days, stand-up roll-top desks, quill pens, the main-frame abacus, a man thought twice before he wrote a paper. At least he thought once. If only old Tom were here.

Q: Tom who?

A: Tom Gresham. You know: bad working papers drive out good. Not to mention Dave Hume, the inventor of the quantity theory of working papers. As Milton used to say: any way you slice it, it’s still baloney.

Q: Is that Milton Friedman?

A: No, Milton Horowitz, the inventor of the pastrami sandwich. I believe he appears in a footnote in Joskow’s classic mustard-stained work on the subject.

Q: Let’s come to your recent impressions. What do you see as the most important recent development in economics?

A: That’s easy – the increase in the mandatory retirement age to 70. Of course it’s got a long way to go before it does me any good, but I underestimate the DRI Mandatory Retirement Age Monitor estimates the retirement age to be rising at 1.73 years per year, so time is on my side.

Q: Apart from its effects on you personally, why do you think this is an important development?

A: It saves a lot of time at department meetings never to have to make a tenure appointment again. And you know what department meetings are like – even worse than skit parties.

Q: How do you think the change will affect students?

A: They’ll love it. Courses will be the same year after year. Reading lists will never change. Textbooks will go on and on and on. Can you imagine the 200th edition of Dornbusch and Fischer? I hope it’s printed on better paper than the low-grade papyrus of the first edition… I do wonder about Eckaus and that Sphinx…… Exams will be the same year after year. Students hate change. Look at what happened when you fellows tried to change 14.121 this year.

Q: Turning to economic theory, what has been the most important development you have witnessed in the last 2000 years?

A: The two-dimensional diagram.

Q: Be serious.

A: I am serious. Can you imagine Bhagwati, the Picasso of the Production Possibility Locus, trying to fit all those curves in a one-dimensional diagram, which was all we had in the old days? There wasn’t hardly room for anything besides the axis.

Q: Come, come. Bhagwati would find a solution for that little difficulty. Who needs an axis?

A: Maybe so, but can you imagine four-color one-dimensional diagrams? How could we have expensive textbooks without four-color diagrams? How could we have expensive professors without expensive textbooks? How could……

Q: OK, OK. What is the second most important development in economic theory in your lifetime?

A: The subscript.

Q: Don’t you know the difference between trivia and serious economic theory?

A: Sure. Trivia are worth remembering, but serious economics is OK to forget.

Q: Maybe we better stick to trivia…

A: I was just kidding. I really know the answer. There is no difference between trivia and serious economic theory.

Q: Tell us about the most interesting experience you ever heard of an economist having?

A: Easy. Happened to an agricultural economist I knew, feller named Samuelson, farm boy from Gary, Indiana. He was digging on the farm one day, checking out the law of diminishing returns, and he found a potato growing with a nickel in it. Marvelous thing. Folks came from miles away to see a potato with a nickel in it. Old Samuelson frittered away the rest of his life looking for another potato with the nickel in it. Never could find one. He did find a couple with three cents in them, but somehow it wasn’t the same. Never accomplished another thing, old Samuelson. Wonder whatever became of him? He’d be 2009, I reckon. By the way, whatever became of that other farmer, Weitzman?

Q: You mean Chaim Weitzman, the founding father of Israel? His last words were: you don’t have to convince me, Professor [Frank] Fisher, I’m Jewish too.

A: No, I mean Marty Weitzman, old quick and dirty, the lion of Levittown.

Q: Why do you ask?

A: Reminds me of the fellow I used to know, a Secretary of the Treasury named Hamilton……

Q: Reminds you of who? Oh, I get it, they both got killed in the dual.

A: Watch out, Buster – the agreement was that I tell the jokes and you prove the theorems.

Q: All right. Let’s get away from personalities. What do you think of recent macro theories?

A: Not much.

Q: What about rational expectations?

A: If there were any truth in that, it would have been thought up long ago.

Q: Not necessarily. The old-timers could have thought that someone would think of it, without thinking of it themselves.

A: That’s true, but the old-timers were too sensible to think that anyone would think a thought like that.

Q: How about the quantity theory?

A: Ingenious.

Q: Really?

A: Imagine saying that velocity is so stable that only money matters, and so unstable that no use can be made of the theory, and imagine getting away with both statements.

Q: But what is macroeconomics left with then?

A: Well, the old Ioto-Sigma Lamba-Mu [Greek for “IS-LM”] curves were good enough for Aristotle, it’s good enough for me.

Q: Would you care to comment on the theory of built-in stabilizers?

A: If you’re not going to be serious, we might as well go watch a ballgame. I understand Louis Tiant, the 2000-year-old pitcher is going for the Yankees.

Q: Use your 2000-year-old imagination. I’ll give you an example of built-in stabilization – Social Security.

A: How so?

Q: The less likely it is that anyone will ever be able to collect benefits, the likelier it becomes that they make even more money consulting on Social Security. Take [Peter] Diamond, for example.

A: You take Diamond.

Q: No thanks. Imagine a man leaving a perfectly good career in public finance to go into law and economics and make a hash out of both fields.

A: Stick to the straight-man lines, please.

[Handwritten insert begins here]

Q: What do you think of the proliferation of journals?

A: I think it is terrific. Of course it has been going on for a long time – ever since BJEA, the Babylonian Journal of Economic Analysis was challenged by the SEJ, the Sumerian Economic Journal.
What I particularly like is the increased specialization. Like JHR, the Journal of Human Regressions and JME, the Journal of Mathematical Existence.

Q: The Journal of Mathematical Existence – isn’t that the one that started with the famous 2-line proof: I count, therefore I am?

A: Yes and was followed by a 47 page proof that without continuity existence was still generic.
I also like this trend toward paired journals.

Q: Paired journals?

A: Yes, like the two Harvard journals – one publishes theory without measurement and the other measurement without theory.
And then there’s the 2 JPE’s – the Journal of Public Economics and the Journal of Private Enterprise.

[handwritten insert ends]

Q: What do you see as the greatest danger facing the economics profession?

A: The threatened extension of truth-in-lending legislation to truth-in-teaching. We could have the biggest rash of malpractice suits since Nicky Kaldor retired.

Q: I think you’re onto something there. How foresighted of this department to have hired an expert on malpractice like Marilyn Simon [joined faculty 1977-78 academic year], the world-famous author of Unnecessary Surgery – The View from the Inside.

A: Simon only writes about malpractice – [Jeffrey E.] Harris actually does it, I understand.

Q: You seem to have discovered a lot since you turned up around here. Anything else new on the malpractice front?

A: There’s a rumor that the University of Chicago has had to recall all the degrees issued during the last five model years.

Q: You mean…

A: Right. Defective transmission mechanisms.

Q: Gad. Are there any good defenses against malpractice suits in your long and varied experience?

A: You can hire a mathematician for the faculty.

Q: What good does that do?

A: How the hell would I know? All I can say is that every department seems to be hiring mathematicians these days. It’s got to be for something.

Q: I’m looking for some more tried and true defense.

A: There’s always the Long-and-Variable Lags defense. See the Supreme Court decision in Tobin versus Friedman, in which Friedman successfully argued that first it’s true, second he never said it, and third wait till next year.

Q-: How about the Roy Lopez Defense?

A: You mean P–K4, P-K4; N-KB3, N-QB3; B-QN5, P-QR3?

Q: No, I mean Roy Lopez, the middle line-backer for the Princeton Economics Department – anyone sues for malpractice, he breaks their legs.

A: Sounds good. There’s also the classic defense due to Stanley Fischer, that truth should be indexed. Today’s malpractice is tomorrow’s conventional wisdom.

Q: Speaking of conventional wisdom, have you spoken with Professor Galbraith since your return?

A: No, but I have been reading his latest book: Why Are People Poor?

Q: I’ll bite; why are people poor?

A: Not enough income, according to Galbraith.

Q: Does he have a remedy?

A: Move to Switzerland.

Q: I see.

A: I can’t wait until the news reaches Calcutta.

Q: One last question, to return to the subject with which we started. Do you see any trends in student skits?

A: Longer.

Q: Longer and funnier?

A: Longer.

Q: Any final comment?

A: Let me ask you a question. What do you consider the most remarkable thing in this interview?

Q: That’s easy. We never mentioned IBM.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archives. Papers of Robert M. Solow. Box 83.

Image Source: Carl Reiner and Mel Brooks performing the 2000 year old man from NPR KNAU, Arizona public radio article “Could You Talk To a Caveman?” (May 9, 2013) .

Tags Bhagwati, Diamond, Dornbusch, Eckaus, Feldstein, Fischer, FisherFM, Friedman, Galbraith, HarrisJE, Kaldor, Samuelson, SimonMJ, Solow, Tobin, Weitzman

Funny Business M.I.T.

M.I.T. Economics faculty MAS*H theme skit. Robert Solow, 1977

Post author By Irwin Collier
Post date 2018-12-03

Dating an undated skit script or assigning skit characters to actual faculty members requires textual analysis skills not taught in economics graduate school. But puzzle solving is, so let’s see what we can do with the following skit written by Robert Solow.

Current events and transitory cohorts of graduate students are our main clues to work with.

The TV-series M*A*S*H began its run of many years in September 1972.
Andrew Abel, Jeff Frankel and Dick Startz, mentioned in the script, all entered the M.I.T. graduate economics program in September 1974, so the earliest they could have been mentioned would have been in the January 1975 show.
David Lilien belonged to the previous year’s cohort so he would have been around in 1975-1977.
I was in that cohort with Messrs. Abel, Frankel, and Startz, and I am honestly surprised that I do not remember this faculty skit at all. However I do remember well that the faculty, as well as our cohort, wrote and performed independent Wizard of Oz skits in 1976. So it appears that either 1975 or 1977 were likely years for the following skit.
Rudiger Dornbusch taught at the University of Chicago Graduate School of Business 1974-75 before coming to M.I.T. in 1975.

Solow’s authorship is firmly established in the prologue to the 1986 faculty skit, where it is written:

“…we were tempted to re-run some of the great Solow skits of the past. There was the 1974 Watergate Skit, in which Paul Colson Joskow testifies to Senator Sam Peltzman that he would run over his grandmother to get a t-statistic above two. There was the 1978 Star Wars skit [a coming attraction here at Economics in the Rear-View Mirror], in which Milton Vader and his minions capture the wookie Jerrybaca and hold him captive in the Chicago Money Workshop. And in the incredible 1973 [sic] MASH skit [below], Hawkeye Hall and Trapper Jerry Hausman find Radar Diamond and Hot Lips Friedlaender cavorting in the Chairman’s office…”

We can see how memory plays tricks even on professors, since there is really no way except in a perfect foresight world that in 1973 Robert Solow would have alluded to members of the cohort of 1974-75.

The Synopsis below was printed on an unattached page and while it clearly leads into the M*A*S*H skit, I somewhat doubt that it was actually recited in performance. The idea of a faculty skit of graduate students trying to write a skit seems undeveloped. Still this synopsis’ characterization of our cohort’s skits as “a series of separate episodes in which they make fun of the idiosyncrasies of the faculty” fits the data well. Thus if forced to choose a single date for the following skit, I would probably go with 1977.

_____________

Synopsis

It is Friday afternoon and the tenth year class still hasn’t thought of a good idea for a skit. A group including Able Andrew [Andrew Abel], Jacob Frankel [Jeffrey Frankel], “Skinny” Lilien [David Lilien], Dick Stops [Dick Startz]…, are meeting in desperation. Finally they decide that the best they can do is to have a series of separate episodes in which they make fun of the idiosyncrasies of the faculty.

Marty Weitzman (Jeff Harris can do this perfectly. He will write his part).
Jerry Hausman. Lecture to be given very fast. Stop after each point and grin.
Frank Fisher. Obvious.
Bob Hall. This character lectures with one toe on top of the other and his arms folded. Then he hops around the room in that position.
Rudi Dornbusch. This depends on being able to do the accent.

And so on. At the end, someone says this isn’t a very good idea after all and a second skit, based on “mash” is tried.

_____________

Announcer: We are about to tell you a heartwarming story that almost nobody knows. It is the story of a devoted, selfless, kind, hardworking people who are yet charming, humorous, sexy, brilliant and lighthearted even while they tend the youthful victims of a heartless bloody War, the famous WOE or War on Error, perhaps more accurately called the War on Other People’s Error or WOOPE. The warm, sympathetic, lovable heroes of this story are the Doctors of the Massachusetts Economics Students Hospital or M.E.S.H.

As the scene opens, we observe the crusty but kindly commanding officer of MESH, Col. Brown [E. Cary Brown], looking at latest casualty lists.

BROWN: (broad smile, laughing, etc.) Able Andrew [Andrew Abel], flunked; Dick Stops [Dick Startz], flunked; Ray Hartman [Raymond S. Hartman], Ray Hartman, flunked, flunked. This is awful, hohoho. Here’s one who lost his Fellowship. Here’s one who lost both his Fellowships. War is hell.

(PAD [Peter Diamond?] comes in and puts sheet of paper on desk)

BROWN: (shouts) Radar.

PAD: Yessir.

BROWN: Where is that new duty roster for next month?

PAD: Just gave it to you, sir.

BROWN: Hmmm, I see Major Samuelson is doing the history of surgical thought. How far does he go?

PAD: Up to Marx’s transplantation problem.

BROWN: I suppose someone’s assigned to each ward: yes, someone for G-1, and for G-2, G-3, M-2, M-3—say how come nobody’s assigned to M-1?

PAD: Demand for M-1 has dropped off a lot lately.

BROWN: Oh, yes, another outbreak of Goldfeld’s Syndrome. How well I remember the first case I ever saw, back at old Fort Sam Brookings in the old days. Why, boy, they had real cash balances in the Regular Army.

(Enter Hawkeye Hall [Robert Hall] and Trapper Jerry [Jerry Hausman].)

PAD: Hi Hawk, Hi Trapper. What’s up?

HH: Up, down, what difference does it make. It’s all a random walk anyway. I’ve got kids out there dying of underconsumption and all I can tell them is that their consumption is way below trend, but there’s no reason to expect it ever to get back to trend. Properly discounted, they’re already dead.

BROWN: Couldn’t you just amputate a bit of the life cycle—maybe they’re just suffering from Modigliani’s Disease—you know the symptoms, compulsive talking, recurrent forecasting errors, complete absence of bequests—why I remember back at old Fort Sam Brookings…

HH: Modigliani’s Disease? There’s no such thing. That stuff all went out with, with, with econometrics. Nowadays it’s all up down up down. Well, maybe a totally unexpected amputation might work. But only once. No, it’s hard telling those innocent soldiers that everything they were taught up until yesterday, even by me, is all wrong.

TJ: I think the smart ones realize that tomorrow it will appear that what we’re telling them today is wrong too. That’s rational expectations for you. Once you get on it’s hard to get off. I hear that over at the Illinois Economics Graduates Hospital or IEGH the surgeons have stopped doing econometric operations altogether. They’d rather let everybody die at the natural rate. One of our enlisted men, Olivier Lawrence [Olivier Blanchard?], is supposed to have suggested that at least time was an exogenous variable, so maybe you could do a few econometric operations. But Major Lucas [Robert Lucas], the executive surgeon at IECH, told him that only the deviations of time from trend can possibly matter and that’s…

PAD: Up down up down….

TJ: Thanks, Radar. According to Lucas’s method of surgery, all coefficients are either zero or one—dealer’s choice.

(Enter HotLips [Anne Friedlander] and Major Frank [Frank Fisher])

HL: Colonel, I’d like to have this crumb courtmartialed. He almost killed one of our students by disconnecting the MPS transfusion from the main computer. He said that if anyone ever put the peripheral equipment and the main-frame in the same market, he’d never be able to go near Yorktown Heights again. Hark! Do I hear a chopper?

PAD: No, Major HotLips it’s just one of the students with Modigliani’s disease.

HL: Radar, just stay in the supply room and out of the women’s shower.

HH and TJ: Up down up down.

HL: Colonel you’ve got to do something about these clods. And as for Frank here, when I think…what did I ever see in him?

F: Well, I’m a little hard not to see. But I’ll get even with you all. I got out of econometric surgery while there were still exogenous variables. Anti-anti-trust is where the money is now. You’ll regret your temper, HotLips. When these creeps are starving and broke, unemployed econometric surgeons, doing illegal surprise amputations for peanuts, I will be dancing in Yorktown Heights, testifying in the fifty-third year of the IBM case, on one side or the other. Colonel, if you can’t have some discipline in this MESH, I’m going to file a complaint with Judge Edelstein.

BROWN: I think I’ll apply for reassignment to old Fort Sam Brookings.

(Enter Corporal Klingenbusch, dressed in his usual.)

TJ: Gorgeous outfit you’ve got there Klingenbusch [Rudiger Dornbusch?].

K: Victory at last. I’ll be in old Fort Sam Brookings before you. It worked. At last I get to leave this nut house. I’ve been discharged. I’m going home to Japan.

HH: How did you work it Klingenbusch?

K: Easy. I didn’t satisfy the transvestality condition.

ANNOUNCER: And so we leave the dedicated Doctors of MESH. Perhaps you are wondering why none of the beloved students, for whom MESH lives and breathes, actually appeared in this story. The reason is simple and typical, not to say rationally expected. There was no space.

[Handwritten note at the end of the typed text:]

J. Harris (appears): My name is Jeff Harris. I am a chest-cutter by profession. This is the most ridiculous hospital I have ever seen. It makes the University of Pennsylvania look like heaven. I wouldn’t trust these people to do veterinary surgery although, in fact, I think some of them may be veterinarians, at best.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library, Economists’ Papers Archive. Papers of Robert M. Solow, Box 83.

Image Source: Robert Solow in his office, MIT Museum Website.

Tags Abel, BrownEC, Diamond, Hall, Hartman, Hausman, Solow, Startz

Funny Business M.I.T.

M.I.T. Economics skit from about 1971

Post author By Irwin Collier
Post date 2018-03-04

The following M.I.T. economics skit from ca. 1971 attains biblical proportions or at least displays biblical pretensions. The script comes from Robert Solow’s file of many such skits that Roger Backhouse has copied during his archival research. Alas this script displays some half-dozen gaps, but there is always some hope that the missing parts (mainly lyrics for songs noted below) will be found eventually in some other economist’s archived papers.

While there is no explicit date on the manuscript, the references to President Nixon, a mention of the eighth edition of Samuelson’s Economics (published in 1970) and the reference to Bishop and Domar who last taught the first graduate microeconomic and macroeconomic courses in 1970-71 are sufficient to give us a reasonably tight point estimate of early 1971 for this skit.

I have taken the liberty of correcting the many spelling errors and obvious typos. To improve readability I have also added boldface, alignment formatting etc. Comments are found within square brackets in italics.

Nerd humor, crude double entendre, puns coexist along side of flashes of wit and emotion. But it is mostly nerd humor.

_________________________

Opening Song [Lyrics missing]

Announcer [Text missing]

Narrator:

In the beginning God created the endowments and utility.
And God looked on the utility and saw that they were goods.
And there was darkness upon the face of the utility and the utility was without form.
And God said let there be light and there was light and the preferences were revealed.
And God said let there be a social welfare function and so it was that the preferences were ordered.
And God said let there be liberation of consciousness and there was consciousness of liberation.
And created economic man in his own image.
And on the seventh day God rested because the Robnett was closed.

[Robnett was name of the room in the Sloan Building that served as a graduate student lounge.]

[Enter Adam]

Adam: Like man, what am I gonna do with this endowment of two nuts I got stuck with. There ain’t no one to exchange ‘em with. I can’t get no satisfaction.

[Enter Eve tossing apple]

Eve: Hey man wanna bite of my apple

Adam: Now we’re getting down to the core of the problem.

Eve: Can I have one of your nuts if I give you a bite of my apple.

Adam: Well you see, I suffer from a certain lumpiness in my endowments. One nut ain’t no good to you on its own but I’ll exchange both of my nuts for 2 bites of your apple.

Eve: Hold it: I got a better idea. Why don’t we put your nuts and my apples together and reproduce them. Perhaps we can make a date.

[Gong and Lights]

God: Stop! In creating this perfect static world for you, I forbade you to break the budget constraint. Now you have reproduced your endowments and broken the budget constraint. Henceforth I condemn all economic men to conduct their intercourse only through the medium of money, and each and every man shall maximize his profits.

[Exit God]

Narrator: ….and so it came to pass that a whole stream of prophets came into existence. And the first and greatest of these was Paul, son of Samuel, who led his tribe out of the gates of Harvard. And whilst resting at Tech. Square Paul saw a flash of burning light from behind the NASA building. And God spoke unto Paul and Paul wrote down these words on a tabernacle later to be called the Ten Foundations.

[Enter Paul]

Paul: Adam Smith who begat Malthus who had a surplus so he begat Ricardo who begat Marx, who By God was a bigoted begat. But Böhm-Bawerk begat Jevons who then begat Marshall who then get begat John Keynes. But Schumpeter came from the Austrian school and finally begat me.

While we’re waiting for Joan to print up the tabernacles for us why don’t we have a sing-song to make sure you know the begetting chain.

SONG – WHEN ECON.
[For the melody: Paul Robeson’s rendition of the original hymn]

LET MY PEOPLE KNOW

When Econs were in Adams land (solo)
Let my people know (chorus)
Everything worked by the invisible hand (solo)
Let my people know (chorus)
Go down Paul way down in (Adams) land
Tell old (Adam) let my people know
When econs were in Ricardo’s land
The topic was the rent on land
When econs were in Marx’s land
Come now brothers and join the band
When econs were in Marshall’s land
All was solved with a maximand
When econs were in Keynesian Land
Savings equaled investment planned

[Joan enters gives notes to Paul]

Paul: During the five minutes left to me I’ll read to you from the Ten Foundations.

TEN FOUNDATIONS
[Text missing]

[Gong, lights]

God: Paul! the promised land lies before the tribe of econs and thou must lead them unto this land of math and money. Thou shalt find it on a piece of old wasteland between the factories down on the river.

[Exit God]

Narrator: …and so the tribe of economists came to rest but Paul was not to become head of the tribe but instead the church grew and a Bishop was made head.

[Enter Bishop]

Bishop… Reads from manuscript in Pious voice

Everybody: Get off that’s last year’s skit.

[Exit Bishop]

Narrator: But the economists were not to live in peace for long for the mighty hosts of the Philistines fell upon them and besieged them.

[Enter 2 economists]

1^st Econ: They say that these Philistines have a great warrior called Goliath who has issued a challenge to all economists to face him as champion of the Philistines.

2^nd Econ: This character sounds Frankly Fishy to me

[Enter Frank]

Frank: No one calls Frank a Philistine. Take that and that.

[kills two economists.]

Narrator: And now a word from my sponsor: [Aitken Ad:]

Announcer: When you wake up in the morning, do your residuals seem to be going round and round?

If they do, you may be suffering from serial correlation. For severe bouts of serial correlation, especially if accompanied by lagged endogenous variables, see your local econometrician. But for the ordinary, everyday serial correlation, try Aitken’s, generalized least squares.
Don’t confuse Aitken’s with any ordinary least squares.

Scientific tests have proved that ordinary least squares is inefficient when it comes to serial correlation. Ordinary least squares merely covers up the problem, making you feel better by giving you optimistically high R²’s, low standard errors. Aitken’s heals while it conceals.

So for all of you who suffer from low Durbin-Watson statistics, the swing is to Aitkens’s. Aitken’s generalized least squares, brewed in Edinburgh, and other fine cities. But you know that.

[Others sing Amazing Frank]
[For the melody: Paul Robeson’s rendition of the original hymn]

Amazing Frank how sweet the sound
To save a wretch like me
I once was lost but now I’m found
Was blind but now I see.

That precious day that Frank appeared
The hour I first believed
Twas Frank that taught my heart to fear
And Frank my fears relieved.

Through many dangers toils & snares
I have already come
‘Tis Frank that’s brought me safe this far
And Frank will lead me home.

Narrator: ….and there was among the economists one called David.

David: All of my people are being killed—I must rescue them.

[hands cigarette to Frank who dies]

All Econs: How did you do it?

David: It’s easy—he got stoned!

All: Oh!

Narrator:…and so David became King of the tribe of Economists.

…and David begat a wise son called Solomon who inherited the ability to always know the question when given the answer

[QUESTION AND ANSWER: Text Missing]

Narrator:…But the economists lost their respect for the elders of the tribe and the world became more and more evil. This threw the economists into an economic and moral problem. The reproduction rate became higher, a labour saving device had to be introduced.

[LET’S CONTRACEPT: Lyrics or Text Missing]

[Bishop enters]

Bishop: I’m not surprised the world’s becoming more evil that Nixon just sits and fiddles while Arthur Burns. I must read the economic word to the econs

[23^rd Psalm: Lyrics or Text Missing]

My lesson isn’t working, just listen to the people

[ain’t gonna deflate]

AIN’T GONNA DEFLATE

[Sung to the tune Blood on the Risers (Gory Gory What a Helluva Way to Die)]

VERSE

They increased supply of money till the central bank was bust
Commercial banks gave credit till restrictions were a must
Investment broker ran amuck with their investment trusts
AND we ain’t gonna deflate no more

CHORUS:
Glory Glory what a hell of a way to go (3 times)
And we ain’t gonna deflate no more

They equaled up the tax receipts to gov’ment expenditure
They raised the defense budget- so to help along the war
And Dicky’s own account became more and more and more
AND we ain’t gonna deflate no more

CHORUS:

They lowered the rate of interest to keep Euro-dollars out
The Germans out exchange rates messed everyone about
The French exported gold to all as if there were a draught
AND we ain’t gonna deflate no more

CHORUS

They printed paper money and handed it around
Sent money to Cape Kennedy got rockets off the ground
But all the money printed went straight to Herr von Braun
AND we ain’t gonna deflate no more

CHORUS

Speculators bulled and beared till buffaloed they got
Stability was never heard become a laughing spot
The widows and the orphans cried keep down that old p dot
NO WE AIN’T GONNA DEFLATE NO MORE.

Narrator: ….one man alone was good in all this world.

[Franco Sawing]

[Gong, lights]

[The following Noah’s ark piece borrows heavily from the 1963 comedy album “Bill Cosby is a Very Funny Man….Right!” ]

God: Franco! (3 times) crescendo

Franco: No answer.

God: This is the Lord, Franco (Thunderously)

Franco: I’ll be with you in about 5 minutes.

God: Franco I want you to build me a model. I want it to be 60 equations long and 30 variables wide.

Franco: But I don’t know any econometrics.

God: So! Franco I want you to take two of every kind of variable into your model. Your model alone can save mankind for I shall flood the world with money.

Narrator: ….and so Franco worked feverishly not to say Frank-tically gathering variables from all his students until eventually he had two of every kind.

[Gong, lights]

God: Franco

Franco: What!

God: The time has come Franco

Franco: Do you know what I’ve been through. I’ve got all these variables and stuck them all in my model. They all look the same to me. How am I supposed to identify them?
Besides you didn’t tell me those variables were homoskedastic.
Now the investment’s got galloping consumptions, that infant industry’s riding his business cycle everywhere, income’s got a growth.
The whole model’s exploding.

[Gong, lights]

Franco: My God it’s shorting

Narrator:…and so money rained for forty days and forty nights.

[Franco looks out from model]

Franco: It’s stopped.

[Lights, gong]

God: Franco

Franco: Here we go again

God: You must tell all the variables to leave the model and multiply.

[Exit God]

Franco: Easier said than done. All right, come on out all you variables. Go away and multiply…go away and multiply.

[Enter 2 adders kissing]

1^st Adder: We can’t multiply

Franco: Why not?

2^nd Adder: We’re adders

Franco: There must be some way. God’s always right. Look, look, they’ve multiplied. How did you manage it.

1^st adder: It’s marvelous what you can do with Logs isn’t it.

[Exeunt]

Narrator:…and so a population explosion occurred over night. And new preachers of the true economic world arose.

Announcer: And they begat three economists, Diamond, Modigliani, and Bhagwati.

[SONG: JAG, PETER, AND FRANCO]
[Still need to establish the original song used to parody]

THREE ECONOMISTS

(soft shoe routine)

Together: I’m Peter, I’m Franco, I’m Jagdish Bhagwati
We are the finest teachers in the world

Peter: I teach public finance though it’s sometimes hard to tell

Franco: I teach monetary and I give my students hell

Jagdish: I just sit and listen to the questions of Steve Zell

Together: Oh we are the finest teachers in the world.

[Peter does his thing, commentator describing. Text/Lyrics missing]

Together: I’m Peter, I’m Franco, I’m Jagdish Bhagwati
We all have our own teaching techniques.

Peter: I like mathematics—it’s a discipline sublime

Franco: I think talking slowly is a really awful crime

Jagdish: I draw Johnson diagrams—a dozen for a dime.

Together: Oh we all have our own teaching techniques

[Franco does his ad for the MITFRB model. Text/Lyrics missing]

[Jagdish does his offer curves spiel. Text/Lyrics missing]

Together: I’m Peter, I’m Franco, and I am Jagdish B.
We are the hardest workers in the world

Peter: I worked through Thanksgiving but I didn’t get much done

Franco: I run back and forwards from Cambridge to Washington

Jagdish: My output of articles is measured by the ton

Together: Oh we are the hardest workers
No we couldn’t be called shirkers
Yes we are the hardest workers in the world, oh yeah.

[STUDENTS LAMENT]

THE GRADUATE STUDENTS’ SONG

[To the tune of “My God how the money rolls in”]
[swaying from side to side, arms linked, on choruses]

ALL:

Oh we are all graduate students
We study with vigor and vim
‘Cos once we have got our Ph.D’s
My God how the money rolls in.

Rolls in, rolls in, my God how the money rolls in, rolls in
Rolls in, rolls in, my God how the money rolls in.

Our first year it was quite traumatic
Just like being torn limb from limb
We made it through Bishop and Domar
Although at times it was quite grim
But now as we’re facing the generals
Our chances of passing seem slim
We’re trying to alter the format
The faculty will not give in

(pleading)

Give in, give in, oh faculty won’t you give in, give in
Give in, give in, oh faculty won’t you give in.

And then we’ll start writing our theses
We’ll make a great contribution
We’ll go to the AEA meetings
To get in the job market swim
We’ll write up some erudite papers
With lots of equations therein
Then next comes a best-selling textbook
To give Paul some competition

Competition, competition, to give Paul some competition, ‘tition
Competition, competition, to give Paul some competition.

Paul Samuelson’s text is on top now
It’s up to its eighth edition
But we’ll supersede it entirely
And start off a new tradition
The they’ll give the Nobel Prize to us
Our pride will be full to the brim
And after we’ve published we’ll perish
My God how the money rolls in

Rolls in, rolls in, my God how the money rolls in, rolls in
Rolls in, rolls in, my God how the money rolls in.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives, Papers of Robert M. Solow, Box 83.

Image Source: Sir John Betjeman—an English poet, writer, and broadcaster. From “Myrth Study” at the National Geographic Website (23 Dec 2013). He has nothing to do with the history of economics, but I love this picture of laughter!

Tags Bhagwati, Bishop, Diamond, Domar, FisherFM, Modigliani, Samuelson

MASSACHUSETTS INSTITUTE OF TECHNOLOGY The Graduate Program in Economics 1974 – 1975

TABLE OF CONTENTS

MASSACHUSETTS INSTITUTE OF TECHNOLOGY The Graduate Program in Economics 1974–75

Department of Economics 1975 – 76

MASSACHUSETTS INSTITUTE OF TECHNOLOGY DEPARTMENT OF ECONOMICS CAMBRIDGE, MASSACHUSETTS 02139

Brown to Solow

MEMORANDUM

DEPARTMENTAL ADMINISTRATIVE RESPONSIBILITIES: ECONOMICS DEPARTMENT 1977-78

1986 FACULTY SKIT

Memo from Chairman E. Cary Brown on a Revision of General Exams, 1975

Back-story for selected references in the text

Some Obvious Context

RIP VAN SAMUELSON RETURNS TO MIT AFTER THE REVOLUTION FACULTY SKIT Christmas 1969

CAST

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

THEORY OF NATIONAL INCOME AND EMPLOYMENT 14.451 Reading List E. D. Domar Fall Term 1960-61

I. NATIONAL INCOME AND RELATED ITEMS

II. GENERAL AGGREGATIVE SYSTEM

III. THEORY OF INTEREST

IV. CONSUMPTION FUNCTION

V. MULTIPLIER AND ACCELERATOR

VI. INVESTMENT DECISIONS

VII. PRICE FLEXIBILITY AND EMPLOYMENT

VIII. THEORY OF GROWTH

Economics 14-451 E. D. Domar

FINAL EXAMINATION—Three Hours January 24, 1961

Part I—One Hour

Part II—Two Hours

Synopsis

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
The Graduate Program in Economics
1974 – 1975

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
The Graduate Program in Economics
1974–75

Department of Economics
1975 – 76

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
DEPARTMENT OF ECONOMICS
CAMBRIDGE, MASSACHUSETTS 02139

DEPARTMENTAL ADMINISTRATIVE RESPONSIBILITIES:
ECONOMICS DEPARTMENT 1977-78

Memo from Chairman E. Cary Brown
on a Revision of General Exams, 1975

RIP VAN SAMUELSON RETURNS TO MIT AFTER THE REVOLUTION
FACULTY SKIT
Christmas 1969

THEORY OF NATIONAL INCOME AND EMPLOYMENT
14.451 Reading List
E. D. Domar Fall Term 1960-61

Economics 14-451
E. D. Domar

FINAL EXAMINATION—Three Hours
January 24, 1961