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Exam Questions M.I.T.

M.I.T. Midterm and final exam questions for first half of international economics. Kindleberger, 1961-1967

 

The two term graduate sequence for international economics 14.581 and 14.582 provided the following course description in the M.I.T. catalogues, unchanged over the better part of the 1950’s and 1960’s:

The foreign exchange market, foreign trade and commercial policy, with emphasis on the relation of the items in the current account to national income, international finance and the achievement and maintenance of equibrium in the balance of payments as a whole; current problems of international economics.

For this post I have transcribed six sets of the 1960’s exams for the first course of the sequence taught by Charles Kindleberger. 

Kindleberger’s exams for both 14.581 and 14.582 for 1954-55 have been posted earlier, as have his exams for 1950-51.

_____________________________

Fall Term 1961-62

14.581 International Economics. Professor C. P. Kindleberger.  3 hours/week, 37 Students.

 

14.581
November 9, 1961
HOUR QUIZ

Answer two questions (equal weight).

  1. Discus some of the choices which balance-of-payments statisticians must make, and illustrate how the outcomes are governed by the purposes to be served on the one hand, and the nature of the raw material on the other.
  2. Indicate the contribution which the establishment of a forward market can make to hedging facilities for foreign traders
  3. Evaluate the Heckscher-Ohlin theorem as an explanation of comparative advantage.

 

14.581 – International Economics
FINAL EXAMINATION
C. P. Kindleberger
January 23, 1962

NO BOOKS ALLOWED.
Answer question 1 and any three of the following five.

  1. (one hour) Discuss the relevance to the theory of international trade taken in the widest sense of any three of the classical assumptions of:

a) full employment
b) mobility of resources within but not between countries
c) perfect competition
d) the labor theory of value
e) Say’s Law of markets

How is the theory modified, and the prescription of free trade altered, if the assumptions you deal with have to be revised?

Answer three questions (forty minutes each).

  1. Which side do you favor in the debate between the elasticities and absorption in the exchange -devaluation problem? Explain.
  2. To what extent, if at all, does international trade theory illuminate the tariff history of some country with which you are familiar? Give details.
  3. How do tariffs affect the distribution of income within and between countries? Illustrate, with reference to the relevant theorems.
  4. Under what circumstances, if ever, are two of the following three weapons of commercial policy justified: a) tariffs; b) quota restrictions; c) foreign exchange control? Compare the measures you treat with alternative means of achieving the same goals, and include in your justification, if you find one, reasons for why the means indicated are superior to the alternatives.
  5. How is the theory of international trade, and of commercial policy, altered by moving from two to a greater number of countries?

_____________________________

Fall Term 1962-63

14.581 International Economics. Professor C. P. Kindleberger. 3 Hours/week, 46 Students.

Quiz
14.581
November 6, 1962

Answer both questions. (25 minutes each)

  1. How does the United States Department of Commerce define a “deficit” in the balance of payments? Comment on the adequacy of this definition.
  2. Evaluate the success of the Heckscher-Ohlin theory in explaining the basis of international trade.

 

 

Tuesday, January 22, 1963
Time 1:30 – 4:30 P.M.

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMICS 14.581

NOTE: Students are not permitted to use any books, notebooks, or papers in this examination. If brought into the room, they must not be left on the desks

Answer any five questions (36 minutes each).

  1. What difference does the establishment of a forward-exchange market make to the conduct of international trade and exchange?
  2. The underlying theory of international trade is sometimes called a theory of “comparative costs” and sometimes one of “comparative advantage.” Is there any real distinction between these views? Explain in detail.
  3. Explain how trade and restrictions of trade alter the distribution of income within and between countries.
  4. If you were called upon to judge the Alexander-Machlup debate over the adjustment mechanism under changing exchange rates, which side would you favor and why?
  5. What is the “foreign repercussion” in the adjustment mechanism? How does it operate? Evaluate its significance.
  6. What difference does it make, when a country restricts its international trade by a given amount, whether it uses tariffs or quotas?
  7. Do customs unions enlarge welfare?

_____________________________

Fall Term 1963-64

14.581 International Economics. Professor C. P. Kindleberger. 3 Class Hours/Week, 19 Students.

[Note:  one additional section  of 14.581 was taught by L. Lefeber with 22 students]

14.581
One-hour Test
November 14, 1963

Answer both questions, which have equal weight.

  1. What is meant by a deficit in the balance of payments?
  2. Expound the law of comparative advantage in modern economic terms.

 

Tuesday, January 28, 1964
Time: 1.30 – 4.30 P.M.

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMICS – 14.581

NOTE: Students are not permitted to use any books, notebooks or papers in this examination. If brought into the room they must not be left on the desks.

Answer six (6) questions (one-half hour each).

  1. In balance-of-payments accounting, practice differs or is disputed in connection with the following items, among others. What are the various ways in which a country may treat five of them, and what is the justification for each possible treatment?

i) immigrants’ remittances
ii) payments to own nationals for carriage of imports
iii) foreign aid
iii) reinvested profits of foreign-owned enterprises
iv) new gold production sold abroad
v) short-term U.S. claims of commercial banks on foreigners
vi) prepayments of U. S. government loans to foreign governments,

  1. Provide a geometric demonstration of the effect on the terms of trade of technological change in the export good which economizes the scarce factor. State all necessary assumptions explicitly, making them as neutral as possible.
  2. Does the shift of the analysis of the theory of international trade from two to many countries change the theory? In what respects and to what extent?
  3. Explain how currency devaluation under full employment affects the balance of payments, and the terms of trade
  4. Meade states that the adjustment mechanism in international trade is virtually the same under the gold standard and under flexible exchange rates. How does he justify this assertion? Do you agree or disagree? Explain.
  5. The marginal propensity to spend on home goods out of national income in Country A is 2/3rds, and to spend on imports, 1/6. Country B has similar propensities of 1/2 and 1/4. Country A undertakes new expenditure of 100 divided normally between home and abroad. What amount does B have to change its expenditures to preserve internal balance? What happens to A’s balance of payments?
  6. The Reciprocal Trade Agreement Acts of 1934 and thereafter, and the Trade Expansion Act of 1962 called for reciprocal reductions of trade barriers. Under what circumstances and to what extent is it useful for a single country to reduce its tariffs by itself without matching tariff reductions abroad?
  7. Set out at length and in detail the conditions under which customs unions increase world welfare.

_____________________________

Fall Term 1964-65

14.581 International Economics. Professor C. P. Kindleberger. 3 Class Hours/Week, 29 Students.

HOUR TEST
14.581
November 12, 1964

  1. Define accurately “lags and leads” in the balance of payments, and discuss their significance.
  2. What assumption does the Heckscher-Ohlin theorem make about factor inputs of commodities, and what is the significance of this assumption.

 

Tuesday, January 26, 1965
Time: 9:00 – 12:00 A.M.

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMICS – 14.581

Answer one question from each of Groups I to IV, and the single question in Group V.

Group I

  1. Expound the theory of comparative advantage as simply and clearly as you can.
  2. Does it make a significant difference to the theory of international trade to move from an analysis of two to more than two countries? Explain.
  3. What are the gains from trade? How are they distributed? How does the gain of a single country change in response to a change in supply abroad? demand at home?

Group II

  1. Is the purchasing-power-parity doctrine best described as a) a truism; b) a fallacy; c) a useful operational hypothesis? Explain.
  2. Discuss the similarities and differences between the gold standard and the flexible exchange system.

Group III

  1. Is free trade the best policy?
  2. Analyze the slogan “There is nothing that a tariff can do that a subsidy cannot do better”.
  3. Argue for or against international commodity agreements.

Group IV

  1. Does a flexible exchange rate make it possible to pursue an independent monetary and fiscal policy internally? Explain.
  2. What happens to the terms of trade when exchange rates alter?

Group V

  1. What is the effect on its balance of payments of an increase in foreign demand for a country’s exports.

_____________________________

Fall Term 1965-66

14.581 International Economics. Professor C. P. Kindleberger. 3 Class Hours/Week, 46 Students.

 

[Note:  No hour midterm exam questions found for the fall term 1965-66.]

Monday, January 24, 1966
Time: 1:30-4:30 p.m.

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMICS – 14.581

NOTE: Students are not permitted to use any books, notebooks or papers in this examination. If brought into the room they must not be left on the desks

Answer Question 1 and 3 others–all of equal weight. 45 minutes each.

  1. Discuss the significance for the pure theory of international trade of two of the following assumptions:

1) two countries, two commodities, two factors
2) identical linear homogeneous production functions of the first degree
3) the labor theory of value
4) perfect competition in goods and factor markets
5) no transport costs.

  1. What are the effects of a tariff on the distribution of income between countries and within them?
  2. Comment at length on the Meade view that financial policies can be used to achieve internal balance, and exchange-rate variation to achieve external balance.
  3. Write an essay on the “gains from trade,” including, inter alia, a discussion on what countries gain, how much, and under what circumstances.
  4. Argue for or against discrimination in international trade, including, as one case, the customs union.

_____________________________

Fall Term 1966-67

14.581 International Economics. Professor C. P. Kindleberger with P. Bardhan, 3 Class Hours/Week, 39 Students.

Hour Test
14.581
December 1, 1966
10:30 a.m.

Answer one question under each of A and B (two in all, half hour each). Use a separate book for each question. Mark with your name and letter and number of the question.

  1. Describe in detail how a central bank can use forward exchange operations a) to protect its foreign exchange reserves in the event of capital outflow; and b) to gain reserves. What are the benefits of such forward operations? their limits?
  2. For 1964, 1965, and 1966 first nine months at an annual rate, the United States balance of payments showed the following data:
1964 1965 1966*
(in billions of dollars)
Gold sales -0.1 -1.7 -0.6
Liquidity balance -2.8 -1.3 -1.2
Official Reserve Transactions Balance -1.5 -1.3 +0.8

*First nine months of 1966 at an annual rate, seasonally adjusted except for gold sales.

Did the balance of payments improve or worsen each year? If one cannot say, what more would one need to be able to do so? Explain fully.

B

  1. Suppose you have a model with two countries, three goods, three factors, and internationally identical fixed-coefficients production functions for each good. What are the sufficient conditions for factor-price equalization in this model?
  2. In the usual two-by-two trade model if all of wage income is spent on one good and all of rental income from capital is spent on the other good, find out the conditions for uniqueness of static equilibrium in such a model.
  3. Take a small country in a large world with given terms of trade. Suppose in this country capital grows at a higher rate than labour and there is Hicks-neutral technical progress at a uniform rate in all the industries. What will happen to the wage rate and the rental rate on capital?

 

14.581T
24 January 1967
FINAL EXAMINATION

Answer question 1 or question 2 (one hour) and three others (forty minutes each)

  1. Compared to a pre-trade situation how will free trade affect income distribution in the trading countries in terms of the Heckscher-Ohlin model, comment on the assumptions of this model.
  2. What do you think are the most important limitations of the existing theory of international trade? Give suggestions, in as much detail as possible, about how you would go about removing one or two of them.
  3. Defend or refute the view of those who claim that free trade hinders rather than stimulates economic growth.
  4. What difference does it make to the impact of a tariff in general equilibrium what happens to the proceeds of the tariff?
  5. Comment at length on the usefulness of the purchasing-power parity theory.
  6. Suppose you have a country large enough to affect world prices. In that context comment on Samuelson’s proposition that “some trade is better than no trade.”
  7. In a standard two-sector two-factor neoclassical trade model with constant proportions of income being spent on each good, show how patterns of specialization will change with factor accumulation.
  8. Protectionists argue out — occasionally successfully — a case for government intervention, but a case for government intervention is not necessarily a case for tariffs. Illustrate with reference to the case of external economies in production.

Source:  M.I.T. Institute Archives. Charles Kindleberger Papers, 1934-1999. Box 22, Folder “Examinations 14.581, 1949-1966”.

Image Source: Charles P. Kindleberger from the MIT Museum.

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Carnegie Institute of Technology Chicago Economist Market Economists Harvard M.I.T.

Chicago. Three casual letters from Cambridge, Mass. regarding young talent, 1957-59

 

In the three letters to Theodore W. Schultz transcribed for this post we witness the old-boy network at work in Chicago’s search for young talent.  Mason and Harris from Harvard share the enormous respect that Harvard Junior Fellow Frank Fisher had won from the senior professors there.  Evsey Domar hedges somewhat in his assessment of Robert L. Slighton but more or less places him in a spectrum running between Marc Nerlove and Martin Bailey closer to the latter. Other now familiar (and less familiar) names are tossed in for good measure.

____________________________

HARVARD UNIVERSITY
GRADUATE SCHOOL OF PUBLIC ADMINISTRATION

Office of the Dean

Littauer Center
Cambridge 38, Massachusetts

December 27, 1957

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago, Illinois

Dear Ted:

In addition to [John] Meyer, [James] Henderson and [Otto] Eckstein, I would also name Franklin Fisher and Daniel Ellsberg as among our really promising young men. Fisher and Ellsberg are, at present, both junior fellows. Fisher is something of a wunderkind, having graduated summa cum laude from Harvard at the age of 18. He published a mathematical article on Welfare Economics when he was a senior, and those who can understand it say it’s good. He is only 20 now, and, of course, it is difficult to say how he is going to turn out. He may be another Paul Samuelson, and on the other hand he may not. Ellsberg is another one of our summas and a very good man, indeed. I don’t think he measures up to John Meyer, but is probably in the Henderson and Eckstein category. Since I promised you six names, I will add that of [???] Miller who came to us this year from California. I have really seen nothing of him, and consequently, can no give you a first-hand judgement. My colleagues, however, think he is very good.

With best wishes, I am

Sincerely yours,
[signed] Ed
Edward S. Mason
Dean

ESM:rrl

____________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Office of the Chairman

M-8 Littauer Center
Cambridge 38, Massachusetts

January 5, 1959

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

It was good to see you even though it was for a very short period. As you know, we include on our list of available men only those who have requested to be put on the list or who have given us their permission to have their name included in the list. It represents men who are either already Ph.D.’s or will receive their Ph.D. within the year, and who are actually available for the coming year.

[Daniel] Ellsberg will be getting his Ph.D. this year, but he is going to Rand at a salary of about $10,000. [Franklin] Fisher will not have his Ph.D. until June 1960. He is just out of college three years and has been offered an assistant professorship at Carnegie Tech. We have now promised him a similar appointment, and in fact he said he would prefer to be at Harvard.

Among other young men of talent who are now here but are not on our permanent roster are the following: Leon Moses who teaches half time in the department and does research with the [Wassily] Leontief project half time. There is a good chance that Moses will go to Pittsburgh, particularly in order to work on the metropolitan project with [Edgar M.] Hoover. Moses is an excellent man in every way and certainly of permanent quality: the same holds for Alfred Conrad who is in somewhat the same position as Moses. Incidentally, both of them have a leave for next year: There is also André Daniere who will be an assistant professor next year and who works primarily with Leontief. Daniere is another good man, though probably not quite as good as the others.

Then there are Otto Eckstein, James Henderson, Jaroslav Vanek and Louis Lefeber. They are all excellent men and in the running for a permanent appointment. Actually, during the next few years we will have but one or two openings and obviously we cannot keep all these men. There is little to choose among them and we will have a tough time making a decision. Please keep this in the highest confidence.

With kind regard, I am,

Sincerely yours,
[signed] Sey
Seymour E. Harris
Chairman

SHE/jw

____________________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Department of Economics and Social Science

Cambridge 39, Massachusetts

January 14, 1959

Professor Theodore W. Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

Your letter of January 6, regarding [Robert L.] Slighton is not quite easy to answer. I do not know [Daniel] Elsberg [sic] or [Franklin] Fisher well enough to make comparisons, but I will try to compare Slighton with [Martin J.] Bailey and [Marc] Nerlove. From the point of view of statistical and mathematical ability, Nerlove stands in a class all by himself, and I do not think that Slighton’s comparative advantage is in those fields. As far as Bailey is concerned, he may have flashes of ideas at times superior to Slighton’s. On the other hand, I would credit Slighton with greater solidity, more common sense and better judgment. As far as long-run contributions are concerned, I don’t know on whom of the two I would bet at the moment, but Slighton would be a serious contender in any such betting.

Lloyd [Metzler]’s session went quite well. He was greeted by the audience most warmly and was pleased about the whole works very much. I am very happy that that meeting was arranged and that I could participate in it.

Please let me know if you need any additional information.

Sincerely yours,
[signed] Evsey D
Evsey D. Domar

EDD:jr

Source:  University of Chicago Archives. Department of Economics, Records. Box 42, Folder 9.

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Economics Programs Harvard Undergraduate

Harvard. Undergraduate economics concentrators dropped over 50% in 1950s.

 

This post provides some backstory to the next post that features the reading lists for Harvard’s junior year tutorial in macroeconomics (Arthur Smithies) and microeconomics (Edward Chamberlin) used in 1960-61. The following Harvard Crimson article describes the undergraduate program in crisis (as seen in the massive drop in economics concentrators). The fall in numbers was attributed to the observation that economics “instruction gyrates widely from verbal triviality to mathematical incomprehensibility”.  Now one might say that much economics instruction gyrates from verbal incomprehensibility to mathematical triviality.

Alfred Marshall tried to design his own Cambridge Curriculum to address two classes of students, those needing general economics training for leadership careers in business and government and those needing advanced training for research careers in economics. Integrated training of the two classes within a single program at Harvard appears to have reached its limits by the second half of the twentieth century. 

Marshall, Alfred. The New Cambridge Curriculum in Economics. London: Macmillan, 1903.

________________________

Economics: Undergraduate Program Undergoes Extensive Re-Evaluation
By Michael Churchill

The Harvard Crimson, November 14, 1959

C. P. Snow, British scientist and author, recently called attention to what he termed the problem of two cultures in our society–the gap in understanding between the traditional humanities and social sciences on the one hand and modern science and technology on the other. Both exist side by side, yet remain intellectually divorced in our modern society. This dichotomy serves well in considering the difficulties surrounding the discipline of economics, for its midway position in such a scheme is indicative of its problems.

The subject matter of economics is the productive system, with all its relations to the world of technology. The concern of economics, however, is this system’s role in society and its effect on men, their livelihood, and their institutions. Not an integrator of the two cultures, nevertheless it must span the separation.

The Economics Department is currently undergoing a crisis. It has failed up to now to accommodate both elements in a coherent program. The result is strikingly demonstrated by the flight of undergraduate concentrators from the field. In less than a decade the number has declined by over half; from 709 in 1949 to 340 in 1958. Although the decline may partially reflect a nationwide tendency, it also is the result of the confusion and frustration attending the undergraduate program here, as the instruction gyrates widely from verbal triviality to mathematical incomprehensibility.

Though economics stands mid-way between two cultures, it is its similarity to the natural sciences that causes the greatest problems. Professional economics shares with the sciences an analytic technique “remote from the common experience of the layman and a language that is principally mathematical,” to use the words the Bruner Committee applied to the natural sciences. And to judge from the current trend this will become increasingly so.

Another similarity with science is that the study of economics is often cumulative, thereby necessitating an extensive introduction to provide the requisite basic knowledge. These are the same problems with which the Bruner Report was concerned in the teaching of natural sciences in a liberal arts program. That report dealt primarily with the problem of the non-concentrator in science–the General Education courses in natural sciences. The Economics Department, however, because of the interest of its concentrators, encounters the same problems throughout its program.

Some of the concentrators are presumably economists, and the Department little wishes to discourage their interests. The vast majority, however, will be lawyers, doctors, and even, despite the Department’s hostility, businessmen.

A final similarity with the sciences lies in the difficulty both areas have in getting the proper senior faculty to teach undergraduate courses. Because of the vast gap between the level of professional work and the elementary nature of undergraduate work–a gap so great that the difference is not only of degree of sophistication but of content–many professors are either reluctant to teach undergraduates or incapable of making the transition.

The combination of the inherent difficulties in teaching economics in a liberal arts college plus the almost total neglect of the undergraduate program in past years has resulted in the precipitous decline in concentrators. The hope of halting that decline lies at the bottom of the Department’s plans to re-design the undergraduate program, which are now under way.

Arthur Smithies, Chairman of the Department, met frequently this summer and again this fall with a Department Committee on Undergraduate Education appointed last spring. Headed by Professor Dunlop, members of the group are Professors Chamberlin, Duesenberry, and Meyer, Assistant Professors Gill and Lefeber, and instructors Baer and Berman.

The results of this increased attention are already apparent in changes made this year in Economics 1 and Junior tutorial, Ec. 98. Historical and topical subjects have gained emphasis at the expense of some of the more theoretical and analytical material, which is now consigned to Sophomore tutorial. In former years economic theory was presented in a historical vaccum without any consideration of the evolution of the economic system from a local medieval subsistence economy to the modern international productive system. The first month of Economics 1 is now devoted to filling this gap. Other changes include an increased emphasis upon the problem of underdeveloped countries and the substitution of a three-week study of the economy of the Soviet Union for the former week’s survey of comparative economic systems.

Along with these changes in content have come those of organization. Gone is the “parade of stars” which formerly masqueraded as lectures. Instead there are now blocs of integrated lectures covering single aspects of the course, for example the series of lectures the first month that Professor Gill gave on economic history. Another long-standing distinguishing trait of the course, its extensive use of teaching fellows, is also on the way out.

The changes are clearly tending to make the course less an introduction into the Department and more a General Education course in the social sciences. The stress, in the attempt to interest the non-concentrator through presentation of historical and topical issues, is now upon political economy rather than upon economics. In a liberal arts college such a solution to the problems affecting the discipline seems to be the most logical and rewarding for an introductory course.

Faced, however, with the task of teaching its concentrators some of the methods and techniques of the economist, the department has moved towards increasing utilization of Sophomore and Junior tutorial for this purpose. The analytic material ejected from Ec. 1 has found refuge in Sophomore tutorial, while Ec. 98 (Junior tutorial) although heavily biased towards the empirical is the only course in the Department offering an overall view of the field.

But there is this year, in addition, an increased amount of attention towards policy questions and topical economic issues in both courses, a reflection of the prevalent belief that meaningful economics on the undergraduate level should relate, as Smithies said, “to the great public issues of the day.” In practice these two elements–the analytical tools and the social framework in which they must fit–still remain divorced in these courses, but at least the attempt is being made to integrate them.

The most perplexing problems facing the Department occur in the area of the middle group courses. To some extent they are aggravated by the Department’s quantative approach to the number of concentrators, with its concern to retain the marginally interested student within the Department. And again the nature of the field, with its disparity between advanced professional techniques and an undergraduate approach, intensifies the problem that confronts many other departments in the College–that of withstanding the polar attractions of pre-professional orientation or of superficiality. Concerning the middle course group area, Dunlop’s committee has only just begun its discussions, but the major alternatives are well known.

There is general agreement, according to Dunlop, that the undergraduate program as part of a liberal arts program should not be a pre-professional training. Disagreement, however, becomes manifest quickly after that statement. Many members of the department, for instance, feel that the best concentrators, the potential future economists, should be allowed to take courses on the graduate level, and indeed should be encouraged to do so. In effect these students would be obtaining a pre-professional training, but the supporters of this proposal feel that this is the only way whereby the interest of the economics-oriented student can be prevented from obstruction by the triviality of normal undergraduate economics courses. At present many undergraduates already take graduate level courses, but the new plan would make a sharper distinction between those who do and do not.

Another group in Department, however, voices the opinion that the College student should not clutter his schedule with pre-professional courses, but rather use his time to study such fields as music, literature, and mathematics. If a student does do graduate work later in economics he will have no trouble picking up whatever advanced analytic tools he needs at that time, while if he does not intend to do so there is no sense in wasting his time with a lot of specialized technique, this bloc maintains.

One proposal, approved by nearly all and sorely needed, is to introduce a greater flexibility into the program through increased use of half-year courses. Presently over half of the seventeen courses offered run from September to June. Many of these, it is admitted, could be pared down to a half-year.

This leads to the proposal for a new type course to replace the far-flung surveys. They would probe smaller areas, but penetrate deeper. Based on the combined desire to attract more students, and the premise that the goal is a more intelligent understanding of the public issues of the past and present, the courses would be designed around the topical approach. Examples would be courses on the corporation, on the economic impact of government activity, the present course on the Soviet Union, a half-year course on underdeveloped countries. In discussing this approach, Dunlop stressed that these would not be “watered down versions of the analytic approach but a new crosscut.” It should be noted that, while not analytical, these courses would still include some quantitative analysis or even simple economic models, but these methods would not become ends or major concerns of the courses.

Another proposal is to set up a core program in the Department. There is, in fact, almost one already. Ec. 141–Money and Banking, Ec. 161–Industrial Organization, and Ec. 181–Industrial Relations, cover the major areas of the field and at least two of them are necessary to handle Generals well. A real core program where all concentrators would progress from one level of the next has many advantages; it provides a common background which the lecturer can assume, gives a common training, and insures that a student will not neglect a vital aspect of the field. But it also has disadvantages, the primary one being the difficulty of handling non-concentrators who have not had this core. Separate sections in a course might be a simple answer here. A more difficult problem is that of time. Ec. 1, 98, and 99 already constitute three-fifths of the required courses. A central core program of another three semesters would aggravate the present lack of flexibility.

For the Economics Department this is a time of discussion, but it must soon reach the hour of decision. Certainly the present situation is not tolerable. By its over-concern with theoretical models and tools, the Department has separated itself from the true materials of a liberal arts education in economics. It should not, however, allow itself to reach the other extreme, in its quest for concentrators, of reducing the content of the courses to a point where an economics student is no more qualified to discuss and solve an issue of political economy than an intelligent government concentrator.

There is little question of the importance of economics today, with its strategic position between the technological productive system and the literary tradition of the social sciences, and with its unique combination of the empirical and theoretical. It remains only to be taught well.