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Wisconsin. Business Cycles. Readings and Exam. Friedman 1940-41



One of the courses taught by Milton Friedman in his year at the University of Wisconsin (1940-41) was on business cycles. A few charts and notes have survived from that course (in Milton Friedman’s papers at the Hoover Institution Archives) but also found in the same folder for that course are three pages of handwritten references that likely were readings for the course. These are listed below, most of which have been linked to the respective books/papers. The bibliographic data have been corrected and expanded where necessary. His incomplete notes, actually more of a log of the sessions, include a reference to “Mitchell & Burns, first chapter” for the third lecture “What is business cycle?”. I guess this must have been from an early draft of the 1946 NBER publication by Burns and Mitchell,  Measuring Business Cycles.


Business Cycle Readings

Wesley Clair Mitchell. Business Cycles: The Problem and Its Setting. NBER, 1927. Chapter 2. Economic Organization and Business Cycles, pp. 61-188.

Friedrich A. Hayek. Monetary Theory and the Trade Cycle (translated by N. Kaldor and H. M. Croome). New York: 1933.
____________. Prices and Production. London: 1935.

R. G. Hawtrey. Currency and Credit. London: 1919, 1923, 1927.  First ed. 1919 Second ed. 1923.

____________. The Art of Central Banking. London: 1932
____________. Capital and Employment, 1937

Ludwig von Mises. The Theory of Money and Credit, 1934 (based on second German edition of 1924). Yale University Press 1953 ed.

Lionel Robbins. The Great Depression, 1934.

W. Ropke. Crises and Cycles (Vera C. Smith, trans. and rev.). 1936.
____________.  “Trends in German Business Cycle Policy”, Economic Journal, Sept. 1933.

Knut Wicksell.  Interest and Prices (R. F. Kahn, trans.). London: 1936.
____________. Lectures on Political Economy (E. Classen, trans.). London: 1935.  Volume I;  Volume II.
____________. “Influence of Rate of Interest on Prices”, Economic Journal, June 1907.

Alvin Hansen, Full Recovery or Stagnation. New York: 1938.

Chap. 1. Keynes, pp. 13-34;
Ch VI & VII pp. 137-60 Purchasing power: government deficit financing in various forms including consumer reserves[?];
Ch XVI through XX, 267-329. The economic outlook, Interpretation of 1937 recession, consequences of reducing expenditure, [illegible word beginning with “P”] pricing[?], Investment outlets & secular stagnation, The Fear[?] of Inflation

Walter Salant’s contribution to the discussion of Chapter 4 (“The Volume and Components of Saving in the United States 1933-1937”) in Conference on Research in National Income and Wealth. Studies in Income and Wealth, Volume 3. NBER, 1939. Vol. III. pp. 305-15.

Gottfried Haberler. Prosperity and Depression. League of Nations, 1937. Chapter 2 “The Purely Monetary Theory”, pp. 14-28.

  1. C. H. Douglas, Social Credit. Edinburgh: 1924. Part II, Ch I & II, 78-107 [sic, pp. 89-122]
  2. J. A. Hobson, The Economics of Unemployment. London: 1922. Ch. II “The Failure of Consumptions”, pp. 29-42
  3. William Trufant Foster and Waddill Catchings. Profits. Boston: 1925. pp. 398-418
  4. J. E. Meade, An Introduction to Economic Analysis and Policy. London: 2nd ed, 1937. Ch. 1 “Can the Economic System Work?”, pp. 1-11.
  5. E. F.M. Durbin, Purchasing Power and the Trade Depression. Toronto, 1934. Ch. I-III, pp. 17-102

National Resources Committee. Consumer Expenditures in the United States: Estimates for 1935-36. Washington, DC: USGPO, 1939. App. C[?]

Lester V. Chandler, Introduction to Monetary Theory. New York, 1940. Ch VI & VII, pp. 115-83



Final Examination
January 30, 1941

  1. One device proposed for mitigating the severity of cyclical fluctuations is the concentration of governmental expenditures on public works in depressions, the extra expenditures at such times to be financed from surpluses accumulated during prior periods of prosperity, from borrowing, from the creation of new money, or from current taxes. Under what conditions, if any, would you recommend the adoption of this proposal? If adopted, what method of financing would you endorse? Justify your answers in detail. Discuss both the merits and demerits of the proposal and of the various methods of financing. Discuss also the observed features of cyclical fluctuations that make the proposal appear strategically desirable or undesirable.
  2. “The business cycle in the general sense may be defined as the alternation of periods of prosperity and depression, of good and bad trade.” Discuss.
  3. Distinguish between “a theory of business cycles” and a “description of the cyclical process”. What characteristics would an adequate cycle theory possess?
  4. Does the fact that there has not yet been developed an adequate cycle theory known to be consistent with the observed course of cyclical fluctuations mean that there is no basis for judging the desirability of governmental measures designed to mitigate cyclical fluctuations? Does it mean that society is condemned either to inaction or to irrational intervention? Give the reasons for your answers.


Source: Hoover Institution Archives. Papers of Milton Friedman. Box 75, Folder “University of Wisconsin, Econ. 176”.

Image Source:  Milton Friedman on the Columbia University 250th Anniversary Website.

Irwin Collier

Posted by: Irwin Collier