Tag: Solow

M.I.T. Economics in the Rear-view Mirror’s collection for Robert Solow at work and play, December 2023

Post author By Irwin Collier
Post date 2023-12-23

Much has been noted and posted across traditional and social media regarding the contributions and reception of the work of Robert Solow who died on December 21, 2023. I was one of the legion of economics apprentices (a.k.a. graduate students) whom Bob Solow introduced to the art and craft of summoning meaning from the chaos of everyday trends and fluctuations. Economics in the Rear-view Mirror has, to date, posted transcriptions of sixteen archival artifacts from his M.I.T. work-and-play-ground.

Bob Solow was like a favorite uncle to those lucky enough to have had him as a teacher. 99 years was one helluva long-run and besides having been a great economist, he was a good man.

A great interview from March 3, 2023: Robert Solow on growing up in Brooklyn, fighting Nazis, and everything that came after.

___________________________

Solow at Work

Course Outline of Economic Statistics. Robert Solow, 1960

Advanced Economic Theory (Capital and growth). Solow and Phelps, 1962

Advanced Economic Theory Course, Solow, 1962

Advanced Economic Theory. Uncertainty and Capital Theory. Readings and Exam. Solow, 1965

Economic Growth and Fluctuations. Readings and Midterm Exam. Solow, 1966

Suggestions for New Fields. Domar, Kuh, Solow, Adelman, 1967

Core Economic Growth and Dynamics. Readings and Final Exam. Solow, 1968

Student evaluations of second term core macroeconomics. Solow, Foley. 1967-70

Applied Price Theory Readings. Robert Solow, 1971 or 1972

Core Dynamic Macro Half-course. Readings and exam. Solow, 1973

Capital theory. Course outline, suggested readings. Solow, 1975

Solow at Play

Dystopian Faculty Skit by Solow, 1969

Economics faculty M*A*S*H theme skit. Robert Solow, 1977

Faculty skit. Robert Solow as the 2000 year old economist, ca. 1979-80

Rewrite of 1940s blues hit “Why don’t you do right, like some other men do”. Solow, ca. 1983-84

Robert Solow’s Last Skit. “Dr Rudi Tells You How”, Late 1980s.

Tags Solow

Graduate Student Support M.I.T.

M.I.T. Robert Bishop memo on importance of Woodrow Wilson funding for grad students, 1961

Post author By Irwin Collier
Post date 2023-05-12

Research documenting a trend (long known by professional economists) that economics professors and policymakers have been trained at a relatively small number of institutions is attracting attention from outsiders looking in. The following 1961 memorandum written by the head of the M.I.T. economics department, Robert L. Bishop, provides evidence of the strength of that department already in 1961 to attract the lion’s share of Woodrow Wilson Fellows in economics. This pattern would be later observed over the coming decades in the graduate school choices of National Science Foundation graduate fellows in economics.

The history of economics quants will have even more things to keep them busy when they turn to factors such as (i) of the relative quality of the inflow of graduate students and (ii) the educational “value-added” of the “top” programs.

In the meantime Economics in the Rear-view Mirror will add artifact by artifact to the pool of evidence.

___________________________

Establishing 1961 as the likely year of Bishop’s memorandum

Robert Bishop (below) wrote: “This year we are the initial first choice or eighteen applicants.” Cf. 1961 MIT President’s report

“This year, too, M.I.T. was selected as first choice by more Woodrow Wilson Fellows in economics — eighteen out of eighty — than any other school in the country.”

Robert Lyle Bishop was head of the economics department 1958-1964.

John T. Norton served as acting dean of the graduate school in 1961

Robert Solow went to work at the Council of Economic Advisers as a senior economist 1961-62.

___________________________

To: John Norton and Committee on Graduate School Policy
From: Robert L. Bishop

Subject: Second-year Fellowships Out of Woodrow Wilson Funds

For the purpose of immediate discussion, I should like to submit this brief recapitulation of the major points that I made in our conversation yesterday.

The most important question of policy from the point of view of the Institute as e whole concerns the award of these fellowships to engineering students. There are several questions in my mind about this practice: (a) Has this been done in previous years? If so, I think it must have escaped the attention of our representative on C.G.S.P., since I feel sure he would have protested. (b) Has the Woodrow Wilson Foundation been asked whether they approve this practice, since engineering is a specifically excluded field for Woodrow Wilson Fellowships? I strongly doubt that they would approve, and I am convinced that the Institute should seek their approval before beginning or continuing this practice. Even if the Foundation is neutral on the question, however, I think that the practice Is inadvisable for reasons given below.
Originally, as you know, the humanities and social sciences were the only eligible field for Woodrow Wilson Fellowships. Several years ago, when the program was greatly expanded, certain scientific fields such as mathematics, physics, chemistry, and biology were included. After one year on this basis, hoverer, the sciences were placed under a specially restrictive quota, mainly because N.S.F. Fellowships (usually more attractive than Woodrow Wilsons) were available in those fields. This helps explain why the great majority of Woodrow Wilson Fellows at M.I.T., both at present and prospectively, are in economics rather than in the sciences.
This year there are eleven Woodrow Wilson Fellows in economics and only one in the School of Science. This is an abnormal disproportion, but economics is at least likely to have a majority of M.I.T. Woodrow Wilson Fellows in the visible future. Last year our department was the first choice of fourteen applicants initially, and we ended up with eleven fellows (because of some rejections and after several switches in and out). This year we are the initial first choice or eighteen applicants.
The high proportion of M.I.T. Woodrow Wilsons in economics contrasts With thirty per cent of second-year fellowships awarded out of Woodrow Wilson funds to economics students.
In general, fellowships are very important in our department because, with few exceptions, we are unable to give either teaching or research assistantships to first-year or second- year graduate students. Furthermore, in our area N.S.F. fellowships are available only to mathematical economists, who represent a minority of our graduate students. The availability of N.S.F. Fellowships to scientists and engineers, and on a comparably generous basis at all levels of graduate study, means that other departments at M.I.T. do not have the same kind of need that we have for second-year fellowships out of Woodrow Wilson funds.
The present Institute practice is especially prejudicial to our department in relation to its competitors at other universities. Our chief competitor is Harvard, which has the only other economics department with comparable numbers of Woodrow Wilson Fellows currently. Our other significant competitors include California, Chicago, Yale and Princeton. These other economics departments all belong to divisions of their respective universities in which most If not all other departments have at least roughly comparable numbers of Woodrow Wilson Fellows. Hence these other departments have normal expectations that second-year fellowships out of Woodrow Wilson funds will go to their own students in roughly the same proportion as in the first year.

The availability of second-year fellowships is obviously a vital concern to the Woodrow Wilson Fellows themselves in deciding where to do their graduate work, and this is a question that some of them ask specifically. Clearly, the present Institute practice means that Woodrow Wilson Fellows in economics at M.I.T. would have an appreciably lower chance of receiving second-year fellowships than they would at the predominantly liberal arts universities.

Our problem is all the more acute because, unlike such schools as Harvard, California, and Chicago, we have an appreciably more selective admissions policy. That is to say, we have enjoyed a remarkable increase in both the quantity and quality of applicants in recent years; and, since we have not expanded our numbers, we admit only people who would normally stand in the top half or higher of most other departments. Secondly, we have tightened our own grading standards and now give fewer A’s and more B’s, C’s, etc. than before. This year’s regular first- year graduate students, for example, have an aggregate cumulative slightly less than 4.3. In view of our selective admission policy, this means that students with cumulatives of 4.4 or 4.2 are still doing a highly creditable job, even though they are in the vicinity of the median of their own group. This to why we Feel that current Woodrow Wilson Fellows with such cumulatives deserve renewals of their fellowships.
I apologize for the last-minute character of this plea. I should explain that the tentative decisions of the Scholarship Subcommittee come to us as more of a shock than they perhaps should, because — in Robert Solow’s absence –we thought that Institute policy on this question was nearer to our expectations then it has proved to be. For example, Solow said in his parting memorandum, which listed the eight present Woodrow Wilson Fellows whom we were to recommend for second-year fellowships, “If we do not get these, I would like to hear about it right away, because strong protest is in order.”

I should say finally, that we have several other non-Woodrow Wilsons whom we would have recommended for second-year fellowships, except that we felt — and thought it was general policy — that Woodrow Wilsons should have priority for renewals provided that they performed creditably.

Source: M.I.T. Archives. MIT Department of Economics. Records, 1947- (AC 394), Box 4, Folder “W”.

Image Source: Cropped portrait of Robert L. Bishop from the M.I.T. Museum website. Colorized by Economics in the Rear-view Mirror.

Tags Bishop, Solow

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

Exam Questions M.I.T. Suggested Reading Syllabus

M.I.T. Core Dynamic Macro Half-course. Readings and exam. Solow, 1973

Post author By Irwin Collier
Post date 2020-08-24

Reading list and exam questions for the half-term course quantitative macroeconomics taught by Franco Modigliani that preceded Solow’s dynamic macroeconomics course during the first term of 1927-73 were posted earlier.

Economics in the Rear-view Mirror thanks Juan C. A. Acosta who copied this course syllabus and final examination that are found in the Franco Modigliani Papers (Box T7) at the Duke University Economists’ Papers Project and has graciously shared them for transcription here.

____________________

14.454
MACRO THEORY IV
Fall 1973, 2^nd half

I. Growth Theory

background, if necessary: Solow, GROWTH THEORY, Ch. 1, 2

Burmeister and Dobell: MATHEMATICAL THEORIES OF ECONOMIC GROWTH, Ch. 1-4

and/or

Wan: ECONOMIC GROWTH, Ch. 1, 2, 4 (sec. 3)

Kahn: “Exercise in the Analysis of Growth,”
OXFORD ECONOMIC PAPERS, New Series, Vol. 11, 1959
pp. 143-156
(reprinted in GROWTH ECONOMICS, ed. A. K. Sen, Penguin)

Wan: Ch. 4, sec. 4

II. Optimal Growth

background, if necessary: Solow, GROWTH THEORY, Ch. 5

Burmeister and Dobell: Ch. 11

and/or

Wan: Ch. 9, 10

Koopmans: “Objectives, Constraints and Outcomes in Optimal Growth Models”
ECONOMETRICA, Vol. 35, 1967
pp. 1-15
(reprinted in Koopmans, SCIENTIFIC PAPERS, pp. 548-5609)

III. Capital Theory

Malinvaud: LECTURES ON MICROECONOMIC THEORY, Ch. 10

Hirshleifer: INVESTMENT, INTEREST AND CAPITAL, Ch. 2, 3, 4, 6

Dougherty: “On the Rate of Return and the Rate of Profit”
ECONOMIC JOURNAL, December 1972
pp. 1324-1349

Burmeister and Dobell: Ch. 8, 9

Weizsäcker: STEADY-STATE CAPITAL THEORY,
pp. 1-22, 32-47, and passim

____________________

14.454 FINAL EXAM
R. M. Solow
19 Dec 1973

ANSWER TWO QUESTIONS, total time 1½ hours

Suppose an economy with effectively unlimited supply of labor in the sense that any amount of labor is available (from an agricultural pool, say) at an institutionally determined real wage . In other respects the economy is like the standard one-sector model.
1. Analyze the growth of such an economy if saving and investment are proportional to output. What might correspond to the “full employment, full utilization” assumption?
2. What if saving and investment are proportional to profits?
3. How does a once-for-all change in $\bar{w}$ affect the growth path, and the share of wages in total output?
Sketch an analysis of an optimal-capital-accumulation problem in which the criterion function values the capital stock (per worker) as well as consumption, for prestige or power reasons, say, so that instantaneous utility is written u(c,k). In particular, is it true, as we would expect, that such a society should save more than it would if it valued consumption only?
Criticize the “neoclassical” theory of growth and capital; but do not be vague—where you have a complaint you should be prepared to suggest a better way.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Papers of Franco Modigliani, T7.

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

Tags Solow

AEA Berkeley Chicago Cornell Economist Market Economists Johns Hopkins M.I.T. Princeton Stanford Yale

M.I.T. Memo regarding potential hires to interview at AEA Dec meeting, 1965

Post author By Irwin Collier
Post date 2020-08-07

This artifact provides us a glimpse into the demand side of the market for assistant professors of economics in the United States as seen from one of the mid-1960’s peak departments. The chairperson of the M.I.T. economics department at the time, E. Cary Brown, apparently conducted a quick survey of fellow department heads and packed his results into a memo for his colleagues who in one capacity or the other would be attending the annual meeting of the American Economic Association held in New York City in the days following the Christmas holidays of December 1965. The absence of Harvard names in the memo probably only indicates that Brown presumed his colleagues were well aware of any potential candidates coming from farther up the Charles River.

From Brown’s memo, Duncan Foley (Yale) and Miguel Sidrauski (Chicago) ended up on the M.I.T. faculty as assistant professors for the 1966-67 academic year. John Williamson was a visiting assistant professor that year too.

_____________________________

Dating the Memo

The folder label in the M.I.T. archives incorrectly gives the date Dec. 28-30, 1969, where the 1969 has been added in pencil.

Two keys for dating the memo. Brown’s comment to John Williamson (York): “Wants a semester here, Jan.-June 1967″. “Solow is hearing paper at meetings” (Conlisk of Stanford) who presented in the invited doctoral dissertation session “The Analysis and Testing of the Asymptotic Behavior of Aggregate Growth Models” (affiliation given as Rice University (Ph.D., Stanford University) where Solow was listed as a discussant. AEA’s 78^th Annual Meeting was held in New York City at the end of December 1965.

_____________________________

Memo from E. Cary Brown to M.I.T. faculty going to Dec. 1965 AEA meeting

[Pencil note: “Put in beginning of 1966-7”]

Memorandum Regarding Personnel Interviews in New York

To: Department Members Attending AEA Convention
From: E. C. Brown

University of Chicago

Sidrauski, Miguel (26). International Trade, Monetary Theory, Economic Growth, Mathematical Economics

Thesis—“Studies in the Theory of Growth and Inflation” under Uzawa
References: Harberger, Johnson, Lewis

[He came here a year ago to ask about a short-term appointment before he returned to Argentina. Griliches believes him to be tops. Had him in class myself and he was first rate. Called him on phone last week and he still wants to be had.]

Thornber, Edgar H. (24). [H. = Hodson] Econometrics, Mathematical Methods, Computers

Thesis—“A Distributed Lag Model: Bayes vs. Sampling Theory Analyses” under Telser
References: Griliches, Zellner

[Supposed to be equal of Sidrauski. Heavily computer oriented. Doesn’t sound interesting for us, but we should talk to him.]

Treadway, Arthur. Mathematical Economist

Thesis on the investment function

[A younger man who, according to Svi [sic], regards himself as the equal of the above. Stronger in mathematics, and very high grades. Wasn’t on market because thesis didn’t appear as completable. Now it seems that it will be and he wants consideration.]

Evenson, Robert E. (31). Agricultural Economics and Economic Growth, Public Finance

Thesis—“Contribution of Agricultural Experiment Station Research to Agricultural Production” under Schultz
References: Gale Johnson, Berg

[He is just slightly below the others. Mature and very solid and combines agriculture and economic growth where we need strength.]

Gould, John (26).

(Ph.D. in Business School)

[Bud Fackler mentioned him as their best. Uzawa and Griliches are trying to get the Econ. Dept. to hire him. Franco knows him and is after him.]

Princeton

Klevorick, Alvin (22). Mathematical Economics, Econometrics, Economic Theory

Thesis: “Mathematical Programming and the Problem of Capital Budgeting under Uncertainty” (Quandt)
References: Baumol, Kuhn

[Apparently the best they have had for some time. Young and very brash.]

Monsma, George N. (24). Labor Economics, Economics of Medical Care, Public Finance

Thesis: Supply and Demand for Medical Personnel” (Harbison)
References: Patterson, Machlup

[Dick Lester was high on him. While not a traditional labor economist, he works that field.]

Silber, William L. (23). Monetary Economics, Public Finance, Econometrics

Thesis: “Structure of Interest Rates” (Chandler)
References: Goldfeld, Musgrave, Quandt

[One of their best four. Not sure he sounds like what we want in fields, however.]

Grabowski, Henry G. (25). Research and Development, Econometrics, Mathematical Economics

Thesis: “Determinants and Profitability of Industrial Research and Development” (Quandt)
References: Morgenstern, Baumol

[Lester says he is good all around man. His field makes him especially interesting.]

Stanford

Conlisk [John]— Economic growth and development

[Arrow has written about him, recommending him highly. His field should be interesting. Solow is hearing paper at meetings.]

Bradford [David Frantz]— Public finance

[Has been interviewed up here, but more should see him who wish to.]

Yale

Foley [Duncan Karl] (Probably not at meetings. Best Tobin’s had.]

Bryant [Ralph Clement] (Now at Federal Reserve Board. Number 2 for Tobin]

York

Williamson, John

[Wants a semester here, Jan.-June 1967. Alan Peacock at meetings.]

Johns Hopkins

[Ask Bill Oakland]

University of California, Berkeley

[Ask Aaron Gordon or Tibor Scitovsky.]

Cornell

Bridge [John L.] — Econometrics, Foreign Trade

Lindert [Peter]— International Economics

[Their two best as indicated in their letter to Department Chairman.]

Buffalo

Mathis, E.J. [Ask Mitch Horwitz if it’s worth pursuing.]

Columbia U.

[Ask Bill Vickrey]

Pittsburgh

Miller, Norman C. (26). International Economics; Money, Macro, Micro and Math Economics

Thesis: “Capital Flows and International Trade Theory” (Whitman)
References: Marina Whitman, Jacob Cohen, Peter Kenen, Graeme Dorrance

[Letter to Evsey Domar from Mark Perlman (Chm.) recommending him to us for further training.]

Source: Massachusetts Institute of Technology. Institute Archives and Special Collections. MIT Department of Economics records, Box 1, Folder “AEA Chairmen MEETING—Dec. 28-30, 1969 (sic)”.

Image Sources: Duncan Foley (left) from his home page. Miguel Sidrauski (right) from the History of Economic Thought website.

Tags BrownEC, Domar, Foley, Sidrauski, Solow, WilliamsonJ

Funny Business M.I.T.

MIT. Faculty Christmas Party Skit. Seven Stages of a Student, 1964

Post author By Irwin Collier
Post date 2020-07-13

The following faculty skit from the M.I.T. economics department apparently had multiple authors. The last act was penned by Robert Solow–it was the only part of the script that was written in long-hand and only Act VI of this skit is found in Robert Solow’s papers in the Duke archives). Unfortunately Act V “The Thesis Defense” was not included in the Graduate Economics Association (1961-67) folder of the Economics Department Records at the M.I.T. Archives.

Attempts at racial, ethnic and gendered humor need no further comment than to note their respective shelf-lives expired two generations ago.

____________________________

GEA Christmas party 1964

Appetite of a Man; Income of a Boy
(The Seven Stages of a Student)
a play in six acts

Cast

Student—played by [blank]
Registration Officer—played by [blank]
Other students, professors, deans, etc.

Act I—The Admission Interview
Act II—Registration
Act III—Talk to the First-Year Class
Act IV—The General Examination
Act V—The Thesis Defense
Act VI—Employment: Going out into The World

TO THE CAST: IF YOU DON’T LIKE A LINE, IMPROVE ON IT.

Act I: The Admission Interview—Student and Admissions Committee

Student Applicant: Sir, I believe you have an economics department here at MIT. Can you tell me why?

Prof. 1: Why does a dog have fleas? To keep things stirred up. But how did you hear about it?

Student: Oh, I follow the basketball scores very closely. If this is the Admissions Committee, I’d like to apply.

Prof. 2: How did you do in college?

Student: I averaged 27 points a game.

Prof. 3: No, we want to know how you did in your college work. Tell us something about your grades, about your preparation, especially in economics and mathematics.

Student: We’ll get to that jazz in due course. But let me remind you, I am interviewing you, not you me. You tell me about fellowships, about student loans, and about parking stickers, how are the students fixed for the things that count.

Prof. 2: Well, you can get a Woodrow Wilson.

Student: If I was going to deal with Woodrow Wilson, I’d have gone to Princeton where they have the school and $35 million, to say nothing of $5.3 million on the side in history.

Prof. 1: There’s the National Science Foundation.

Student: Whose got the balance-of-payments disequilibrium. I am talking of how much money you are going to give me, not how much money I am going to bring to you. Now get this straight: I have expenses. These Triumphs cost money to maintain, and my girl likes steak. I also want refinance my stock market operations from my broker’s 6% to what I understand are your 2% loans for students. You give me tuition plus $5,000, plus another $5,000 loan, plus a ticket to park my car inside the Grover C. Hermann Building, or I’m on my way to Yale on a NASA.

Chorus: Nasa’s in the cole, cole groun. [Song by Stephen Foster “Masa’s in the Cold, Cold Ground”]

Act II—Registration

Reg. Off.—This stuff is pretty cut and dried: 14.121 Bishop, if you’re strong enough to turn the crank and carry the script; 14.451, mathematics, statistics, and a course like history, labor, trade, money.

Student: Whoa, back. Not so fast. First, let’s worry about the languages. There’s Spanish.

Reg. Off. We don’t let students take Spanish unless they are interested in development in Latin America, and have a need to read the limited literature.

Student: I guess I prefer Portugese.

Reg. Off. Development in Brazil.

Student: The Bossa Nova. But after the language, I think I’ll start on the minor: some of the 15 courses: Social Distance and Proximity during and After the Office Party, that sounds interesting; and maybe Design Packaging, how to get a nickel’s worth of stuff into a buck’s package; and Engineering Social Change for Chemical Engineers, or what to do after the Stink Bomb drops by mistake.

Reg. Off. And 14.121

Student: and some courses in the soft option: what is it this year, trade, labor, development? What about that course I heard about in which the students all graded each other on how they related to one another—a children’s party with an A for each kid.

Reg. Off. And 14.121.

Student: And a course at Harvard with real razz-matazz: Lady Jackson [Barbara Mary Ward, Baroness Jackson of Lodsworth, a development economist], and Man Galbraith, and Senor Chenery, and Don [here the honorific title for a nobleman] Hirschman.

Reg. Off. Look pal. Everybody takes 14.121.

Student: You can’t mean that we do too, those of us here on athletic scholarships.

Act III—Reg. Off. To the First-Year Class.

Student 1 whispering to Student 2: They say it’s a terrible experience. Students faint and dragged out. Chills come over them. There’s a lot of talk of Cs and Ds, and fellowships being taken away, and students walking the plank.

Student 2, whispering to Student 1: Naw, it’s no worse than a bad cold, and you’re not a man until you’ve had it.

Reg. Off. “Look to the right of you, look to the left of you. Of the three of you, only one will be here next term.” What famous book on economics started that way and the edition had to be suppressed. You students really have it made. Appetite of a man; income of a Boy. How much better you are off than my older colleagues, with their income of a man, and appetites of a boy.

Student: What about Grades?

Reg. Off. Grades? Grades? Who pays any attention to grades? Grades are trivial; the second order of smalls; a mere epsilon, nothing. Of course you need one A to get tuition money for the second year, and a second A for every $100 of coffee-and-cakes money. But grades? Who needs ‘em? They’re for undergraduates, for grade hounds, for Phi Beta Kappa or College-Bowl kids. Concentrate on higher things like saying Stolper-Samuelson and not (repeat not) Samuelson-Stolper.

Act IV: The General Examination

Prof 1: Good morning, Mr. Mittlablook.

Prof 2: Good morning, Mr. Pswoom.

Prof 3: Good morning, Mr. Pixyquicksel

Student (aside): Isn’t it lovely, they all know my name after two years.

Prof 1: Let’s get down to business.

Student: Must we?

Prof 2: What would you like to be examined in first? I see we have economic theory, economic history, and textbook writing and consulting fees.

Student: I am afraid I am not responsible for any of those.

Prof 3: We would all like to say the same.

Student: I was told when I came that I could be examined in comparative economic systems, the difference between capitalist and socialist economies, and free enterprise sink or swim.

Prof 1: Those fields were discontinued this morning.

Prof 2: Yes, I am afraid you’ll have to take the exam in economic theory and history.

Student: I think that is dreadfully unfair.

Prof 3: Well let me start you off by asking you a question in economic history. Consider the period which used to be known as the industrial revolution. This was accompanied, as you know by a large population explosion. Would you discuss the relative roles of (a) men and (b) women, in this development?

Student: Well, I suppose you could say that they each contributed something but the truth lies somewhere in between.

Prof 1: Wrong; you are supposed to say that the roles are neither reflexive, symmetric, nor transitive.

(STAGE DIRECTION: The last time we tried that line we stepped on it. It should be read with greater expression.)

Prof 2: That question was meant to combine economic history and economic theory. Let me ask you one about the history of economic theory. Name a business cycle theorist who was also a Russian cowboy.

Student: Evsey Domar.

Prof 3: Wrong again; Tugan Baranowsky. (general groans)

Prof 1: Now we come to your third field which is, I understand, professor imitating.

Student: Yes, I have learned to make noises like a professor now and then.

Prof 2: That will be no doubt fascinating at the Christmas Party.

Prof 3: Imitate a professor.

Student: How can I imitate a professor when I am a professor imitating a student?

Prof 1: Imitate a professor imitating a student imitating a professor.

Student: I am not responsible for infinite sequences.

Prof 2: Could you leave the room while we discuss you please. You’ll hear from us in about three years Thursday. (student leaves)

Prof 3: Well, what shall we do? He is a bright boy but he didn’t do too well.

Prof 1: On the other hand, I thought he was a stupid boy but did very well.

Prof 2: I see that as usual we are in complete agreement.

Prof 3: There is only one thing we can do. Give him an excellent plus and tell him not to write his thesis.

END OF SCENE.

Act V. The Thesis Defense
[missing]

Act VI. Employment

[Handwritten mimeo, author: Robert Solow]

Student sitting grandly in chair, feet on table, cigar? Del Tapley shows in two interviewers, I₁ and I₂.

D.T.: Mr. Auster, sir, these servile wretches represent Princeton and the University of Minnesota. They have an audience, I mean appointment, with you.

Come in chaps. Sorry to have to see you two at the same time like this, but my schedule is very crowded. I have to squeeze in the rest of the Big Ten this morning; and this afternoon I’m seeing Yale, Chicago, and a representative of the Free Speech Movement at Berkeley.

I₁: You mean…

A: Yes. Radner almost made it with that beard. But somehow he was just a little too much Commander Whitehead [president of Schweppes U.S.A. and featured in the Schweppes advertisements] and not enough Fidel. Anyhow, he’s been dropped. The FSM [Free Speech Movement] has eliminated the middleman. Mario [Savio, a leader of the Free Speech Movement] may come himself. We’re sending a delegation to meet him, at the B&A [Boston and Albany Railroad] yards. Must remind Marcelle and Cynthia not to comb their hair. But what can I do for you, or vice versa?

I₂: Well, we do feel Minnesota has a lot to offer a young man…

A: Stop feeling and start offering.

I₂: Sorry, sir. Our special CRAP salaries…

A: What?

I₂: Charles River Assistant Professorships—they start at $17,500. Unfortunately since Walter [Walter Heller] got back they’re only allowed to go up at 3.2% a year, but we try to make it up in sly ways. That’s for 9 months, of course…

A: Nine months?

I₂: Well, not nine full months—we do have a special slush fund to cover the week between terms. And we send you all expenses paid to the annual Christmas meeting any time it is in Miami. Of course if it’s not in Miami, we just send you to Miami.

A: Only fair. Pretty cold out there. Of course Adelman goes to the Virgin Islands every winter.

I₁: I’ve heard that Solow curls up in a hollow tree in Concord and hibernates.

A: How can they tell? Never mind. Seventeen-five sounds reasonable. What about the teaching load?

I₂: Teaching load? I didn’t realize you were actually willing to do any teaching. In that case you begin at 20,000, naturally. What were you thinking of teaching?

A: Why near-decomposability, of course. Is there anything else? By the way, do you have a Community Antenna Television Association [CATV]?

I₂: No, but…

A: No buts. I’m not interested. But you ought to see Bridger Mitchell [MIT graduate student, a telecommunications expert with Charles River Associates] while you’re here—I understand he won’t go to any university within 100 miles of a CATV. Tell me about Princeton.

I₂: But I haven’t told you about the 13/9^th summer pay, or the every-other-year sabbatical, or how you get Leo Hurwicz for a research assistant, and girls, girls, girls,…

A: Sorry. Not interested. Actually, I’m not anxious to leave the East coast anyway. To tell you the truth, I’m not even sure how to do it. Tell me about Princeton.

I₁: I do hope you will think seriously about Princeton, sir. We’re rather different from this Johnny-come-lately place, you know. More like a way of life. Gentlemen-scholars. Culture. Charm[?] Ivy. Yet intellect. We did have Einstone, you know.

A: You mean Einstein?

I₁: Well, we suggested he change his name. Don’t think we’re stuffy, however Princeton had a Negro student as long as 30 years ago. And one of these days we’re going to have another one. Our salaries may not be so high nor our teaching loads as light as those cow colleges’, but we’ve got class.

A: Even if I don’t take the job, I’ll put a tiger in my tank. But just how big is the teaching load?

I₁: Eleven hours.

A: Eleven hours a month isn’t too bad—after all, I run out of material on near-decomposability after 22 hours. But throw in a few trips to Washington, a week or two at the Bureau for decompression, Christmas in Miami, and the term is over.

I₁: The Princeton faculty doesn’t go to Miami. I’m afraid it’s eleven hours a week?

A: You are kidding. How can anybody teach eleven hours a week and still keep up his ONR [Office of Naval Research] project, his NSF [National Science Foundation] grant, and his consulting for oil companies?

I₂: The whole Minnesota department doesn’t teach 11 hours a week. Don’t be hasty, sir. We’ll buy you a Community Antenna Television set-up.

I₁: Don’t listen to him. You don’t have to lecture for 11 hours a week. You can work off some of it by discussion with graduate students.

A: I don’t see why Princeton graduate students should be treated better than MIT students. What’s the pay?

I₁: Eighty-five hundred.

A: Eighty-five hundred! Is that in 1954 dollars or something?

I₂: In Berkeley a teaching assistant gets 8500 just for picketing.

A: You’re having [?] me on.

I₁: I can see you’re not the Princeton type. Hardly anyone is.

A: How clever can you get? Well, gentlemen, thank you for dropping in. I’ll let you know in due course. Don’t call me, I’ll call you.

I₂: By the way, could you tell me what you’re writing your thesis on and how far you’ve got?

A: None of your goddamn business. But if you must know, Kuh once said that one regression is worth a thousand words. I figure 35,000 words makes a pretty fair thesis, so I’m doing 35 regressions.

I₁: On what?

A: On a computing machine, you dope. Now I’m afraid I have another appointment. I suppose some of the other students have agreed to see you. Miss Tapley will show you the way.

D.T.: Your next appointment is ready. The gentlemen from Harvard and Yale are waiting, the Wharton School has sent Albert Ando and two other people he claim are named Flend [Irwin Friend] and Klavis [Irving Kravis], there is a man from Northwestern who drove up in a Brink’s armored car he says is full of bills in small denominations, and the New York Knickerbockers claim they’ve picked the whole class in the draft.

Source: M.I.T. Libraries, Institute Archives and Special Collections. MIT Department of Economics Records. Box 2, Folder “GEA 1961-67”.

Image Source: “From the Flying Car to the Giant R2-D2: The Greates MIT Hacks of All-Time“, by Robert McMillan. Wired, March 20, 2013.

“Boston’s Harvard Bridge is 364.4 Smoots long. And the fact that anybody would remember this in 2013 was probably the furthest thing from MIT freshman Oliver Smoot’s mind on the October 1958 night that he lay himself down, time and again, along the bridge, allowing his fraternity brothers to measure its length (each Smoot is about 5 feet, 7 inches). It was a fraternity prank, but the next year the bridge’s Smoot markers were repainted. Thus, an MIT landmark — and a unique unit of measurement — was born.

Smoot himself went on to become a board member of the American National Standards Institute — a standards man through and through.”

Tags Ando, Domar, Heller, Kuh, Solow

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.

M.I.T. General Examination in Advanced Economic Theory. Sept 1962 and May 1963

Post author By Irwin Collier
Post date 2019-12-14

Edwin Burmeister received an M.A. from Cornell in September 1962 before going on to M.I.T. to complete his Ph.D. in economics in 1965. His papers at the Duke Economists’ Papers Archive include a folder of advanced economic theory general examinations at M.I.T. (May and September 1962; May 1963). The copy of the May 1962 exam has been transcribed and posted earlier. This post adds the remaining two exams to the collection of artifacts. Pro-tip: Burmeister’s papers includes his solutions to the September 21, 1962 exam, most likely prepared during his preparation for the May 1963 exam.

I should mention that on none of the three exams is “M.I.T.” actually written. However, since Samuelson and Solow’s names are typed on the copy of the Sept 1962 exam and since Burmeister was a M.I.T. graduate student for certainly the May 1963 examination (and, like many before and after him, cast an eye on previous exam questions), it is pretty obvious where the exam questions must have come from.

________________________

General Examination
Advanced Economic Theory

Professors P. A. Samuelson and R. M. Solow
Friday, September 21, 1962

Do as many problems as you have time.

Derive the demand function, X_i = Dⁱ(I, p₁, …, p_n) ≥ 0 for a consumer with income I and having positive prices and having respectively preferences satisfying the following utility functions:
1. 1. U = k₁ log X₁ + … + k_n log X_n
  2. U = mX₀ +logX₁ [Be careful!]
  3. U = a₁X₁ + a₂X₂ + … + a_nX_n [where] a_i≥0

Extra credit

1. 1. U = Min (X₁/b₁, X₂/b₂, …, X_n/b_n)

A firm owning some fixed and non-transferable “capital” has a production function

Q = f(labor, land) = 20L^.5T^.25

It sells in a competitive market at $P_q. It rents labor in a competitive factor market at $W and rents land at $R.
What are its demand relations for factors, and its supply relation for output? What are its “profits” or “quasi-rents to owned capital.”
It will suffice for you to write down all the relations that define these desired functions and describe how they could be solved. (In other words, you don’t have to do the explicit solving.)

In a Hicksian general equilibrium model all income effects turn out to be negligible. Comment decisively on its

(a) Property of dynamic stability (or possible instability)
(b) Property of imperfect stability (or possible instability)
(c) Property of perfect stability (or possible instability)

Let H(X,y) be a function of non-negative vectors X(of dimension m) and y (of dimension n). Define X*, y* as a saddle point of H if

H(X*,y) ≥ H(X*,y*) ≥H(X,y*)

For all non-negative (X,y).
Prove that X* and y* are optimal vectors for a pair of dual linear programs if and only if they provide a saddle point for the function

H(X,y) = C’X+b’y – y’AX.

Show that a simple Leontief model is capable of producing any positive vector final demands (given enough labor) if and only if (I-A)^-1 is non-negative.

Consider the von-Neumann model with 3 activities and 4 commodities and with input matrix

$\text{A}=\left[ \begin{matrix} 0 & 1 & 0 \\ 1 & 0 & 0 \\ 0 & 0 & 1 \\ 0 & 1 & 0 \\ \end{matrix} \right]$ and output matrix $\text{B}=\left[ \begin{matrix} 1 & 0 & 0 \\ 0 & 0 & 1 \\ 0 & 2 & 0 \\ 0 & 0 & 1 \\ \end{matrix} \right]$

Find the optimal activity and price vectors in the von-Neumann sense, and the associated expansion rate.

________________________

General Examination in Advanced Economic Theory: May 1963

Answer any 4 questions.

Suppose all of the N people in a market have identical indifference maps, that are homothetic (i.e., with unitary income elasticities everywhere). Let each j^th man have his endowment

$\left( \bar{Q}_{1}^{j},\bar{Q}_{2}^{j},\ldots ,\bar{Q}_{r}^{j} \right)$

1. 1. Show that the final equilibrium of exchange is quite independent of the distribution among men of the fixed totals
$\begin{array}{l}\bar{Q}_{1}^{1}+\bar{Q}_{1}^{2}+\ldots +\bar{Q}_{1}^{N}={{A}_{1}}\\...................................\\\bar{Q}_{r}^{1}+\bar{Q}_{r}^{2}+\ldots +\bar{Q}_{r}^{N}={{A}_{r}}\end{array}$
1. Show that the equilibrium prices can be found by treating any man as the single Robinson-Crusoe living under autarky.
2. What can you, therefore, state about the i) Imperfect, ii) Perfect, and iii) Dynamic stability of the equilibrium?
A Kaldor-Goodwin model defines[sic]
$\text{a}\frac{\text{dK}}{\text{dt}}=\beta \text{Y}-\text{K, }\left( \text{a,b,}\beta \right)>0$
$\text{b}\frac{\text{dY}}{\text{dt}}=\frac{\text{dK}}{\text{dt}}-\text{S}\left( \text{Y} \right)$
(i) Explain the meaning of each equation. (ii) Give an equation for its stationary equilibrium solution. (iii) What does its local stability and oscillation depend on? (iv) What shape for the only arbitrary function will give rise to unique-amplitude oscillation?
In Mitopia
$\text{C}+\frac{\text{dK}}{\text{dt}}=\sqrt{\text{KL}}\text{ and L = }{{\text{L}}_{0}}{{\text{e}}^{\text{gt}}}$ .
How must K(t) grow if C/L, per capita consumption, is to remain at a maximum constant level? What will then be the interest rate, and the relative share of labor?
A machine with a length of life T costs $f(T). The machine is known with certainty to yield a net income stream of $a per year steadily throughout its lifetime. Find the equation determining the optimal length of life of a machine under each of the following assumptions.
1. The instantaneous rate of interest in a perfect capital market is r; the length of life is chosen to maximize the present value of net cash flow (including initial cost).
2. The interest rate r is used to discount net income, and durability is chosen to maximize the capital value of a new machine per dollar of initial cost.
3. The internal rate of return (i.e. the discount rate that equates capital value and initial cost) is maximized.

Suppose that in cases (a) and (b) the interest rate is such that the capital value of the machine equals its initial cost. Show that all three solutions then coincide. Which is the “right” way to look at the problem?

In a Leontief system with n commodities and one primary factor, labor, let P_i be the money price of commodity i, P₀ the money wage, a_oithe direct labor input per unit output of commodity i, X_i the output of commodity i, and C_i the final demand for commodity i. Show that the increase in P_j/P₀ resulting from a unit increase in a_0iequals the increase in X_ineeded for a unit increase in C_j.
Consider an individual whose life is divided into two periods, Present and Future. He is endowed with some physical good in each period.
1. Show how to construct a supply curve relating the amount of saving he will do in the Present as a function of the rate of interest.
2. Show that in a society of identical individuals with no time preference, the equilibrium rate of interest is zero if corresponding to each individual with endowment X in the Present and Y in the Future, there is another individual with endowment Y in the Present and X in the Future.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edwin Burmeister papers. Box 23, (unlabeled) Folder.

Tags Burmeister, Samuelson, Solow

Solow at Work

Solow at Play

Establishing 1961 as the likely year of Bishop’s memorandum

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

14.454 MACRO THEORY IV Fall 1973, 2nd half

I. Growth Theory

II. Optimal Growth

III. Capital Theory

14.454 FINAL EXAM R. M. Solow 19 Dec 1973

Dating the Memo

Memo from E. Cary Brown to M.I.T. faculty going to Dec. 1965 AEA meeting

Memorandum Regarding Personnel Interviews in New York

University of Chicago

Princeton

Stanford

Yale

York

Johns Hopkins

University of California, Berkeley

Cornell

Buffalo

Columbia U.

Pittsburgh

GEA Christmas party 1964

Appetite of a Man; Income of a Boy (The Seven Stages of a Student) a play in six acts

Cast

Act I: The Admission Interview—Student and Admissions Committee

Act II—Registration

Act III—Reg. Off. To the First-Year Class.

Act IV: The General Examination

Act V. The Thesis Defense [missing]

Act VI. Employment

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

General Examination Advanced Economic Theory

Professors P. A. Samuelson and R. M. Solow Friday, September 21, 1962

General Examination in Advanced Economic Theory: May 1963

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

14.454
MACRO THEORY IV
Fall 1973, 2^nd half

14.454 FINAL EXAM
R. M. Solow
19 Dec 1973

Appetite of a Man; Income of a Boy
(The Seven Stages of a Student)
a play in six acts

Act V. The Thesis Defense
[missing]

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

General Examination
Advanced Economic Theory

Professors P. A. Samuelson and R. M. Solow
Friday, September 21, 1962