Category: Suggested Reading

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Harvard Suggested Reading Syllabus Undergraduate

Harvard. Principles of Economics. Course outline, readings, exam questions, 1949-50

 

Of particular interest in this two-track (for economics concentrators and non-concentrators, respectively) principles of economics course is that the Keynesian Cross chapter (XII) of Paul Samuelson’s new textbook Economics was assigned in the concentrators’ version.

The course was taught by Professor Burbank and the newly minted Harvard Ph.D. Wesley Glenn Campbell who would later be hand-picked by former President Herbert Hoover to head to the Hoover Institution.

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Course Description

ECONOMICS
1949-50

Primarily for Undergraduates

Economics 1 (formerly Economics Aa and Ab). Principles of Economics

Full course. Tu., Th., Sat., at 11. This course is conducted by sections. It will be divided into sections for concentrators and for non-concentrators. There will be sections at other hours. (Radcliffe sections will meet Tu., Th., Sat., at 11 and at such other times as the enrolment may justify.) Professor BURBANK, Dr. [Wesley Glenn] CAMPBELL [Harvard Ph.D., 1948], and other MEMBERS OF THE DEPARTMENT.

Economics 1 may be taken by properly qualified Freshmen with the consent of the instructor.

Economics 1 provides an introduction to the principles required for the analysis of economic problems. The development of principles in the main fields of economics and the study of economic organization give the non-concentrator a background for the understanding of economic problems and are indispensable for the concentrator’s further work in advanced courses.

 

Source:  Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 4, Folder “Economics, 1949-1950 (1 of 3)”.

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Course Enrollment

[Economics] 1 (formerly Economics Aa and Ab). Principles of Economics. (Full Co.) Professor Burbank, Dr. Campbell, and other Members of the Department.

(Fall) Total 441: 1 Graduate, 16 Seniors, 68 Juniors, 220 Sophomores, 110 Freshmen, 21 Radcliffe, 5 Special.
(Spring) Total 434: 1 Graduate, 18 Seniors, 72 Juniors, 240 Sophomores, 73 Freshmen, 26 Radcliffe, 4 Special.

 

Source: Harvard University. Annual Report of the President of Harvard College, 1949-50, p. 72.

 

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ECONOMICS I—CONCENTRATORS
1949-50
First Half

Sources:
Benham and Lutz Economics, American Edition (1941)
*Bowman and Bach Economic Analysis and Public Policy, Second Edition (1949)
Burns, Neal & Watson Modern Economics(1948)
Hart, A.G. Money, Debt, and Economic Activity(1948)
Merrill, Lynch, et al, How to Read a Financial Report
*Peach and Krause Basic Data of the American Economy, Revised Edition, (1949)
Peterson, S. Economics(1949)
Schumpeter, J. A. Capitalism, Socialism, and Democracy
Slichter, S. H. Modern Economic Society(1931)
Slichter, S. H. The American Economy(1948)
Williamson, H. F. The Growth of the American Economy

*To be purchased by students.

 

PART I. Introduction

  1. The Economic Problem
    Benham: Ch. 1, General Survey
  2. Economic Institutions and Economic Development
    Burns: Ch. 2, Change and Growth in the Economy
    Bowman & Bach: Ch. 6, Economic Analysis and Public Policy

PART II. National Income, Money, Banking and Price Levels

  1. National Income
    Burns: Ch. 4, National Income and National Output
    Peach & Krause: Section I, National Income
  2. Money, Banking and Price Levels
    Merrill, Lynch, et al.: How to Read A Financial Report
    Peach & Krause: Section 4, Money and Banking
    Peterson: Ch. 10, Exchange Media. Hand-to-Hand Money
    Bowman & Bach: Ch. 10, The Banking System, the Money Supply, and Investment; Ch. 11, The Government and the Money Supply
    R.B.: Banking and Monetary Statistics, Section 10, pp. 360-366
    National Debt Series: 2, Our National Debt and the Banks; 3, Our National Debt and Interest Rates; 6, Our National Debt and Life Insurance
    Hart: Ch. 10, Inflation and Deflation

PART III. Role of Markets in the Allocation of Resources and the Determination of Relative Prices

  1. Markets—An Introduction to the Problems of Production, Distribution, Exchange and Consumption
    Bowman & Bach: Ch. 2, Income and Consumption; Ch. 3, The Economic System—A Summary View; Ch. 4, Private Enterprise, Profits, and the Price System; Ch. 5, Business Enterprise in the Modern Economy—omit appendix
  2. Price Determination and Resource Allocation
    Bowman & Bach: Book III, Production, Individual Prices, and the Allocation of Resources
    Williamson: Ch. 25, The Location of Economic Activity
    Benham: Ch. 2, Markets, pp. 38-46
    Slichter: Ch. 10, Speculative Production, pp. 215-221
  3. Public Control of Markets
    Bowman & Bach: Ch. 33, Government Policy and Business Practice
    Schumpeter: Ch. 8, Monopolistic Practices
    Peterson: Ch. 23, Market Control Policies in the United States, pp. 618-631
    Peach & Krause: Section 9, Agriculture
  4. The Productive Performance of the American Economy
    Slichter: Ch. 1, The American Economy; Ch. 6, How Good is the American Economy
    Peach & Krause: Section 2, Population and the Working Force in the United States
    Peach & Krause: Section 3, National Resources

 

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Lecture Schedules and Reading Lists, 1942-1970”, Subfolder “49-55”.

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ECONOMICS I—NON-CONCENTRATORS
1949-50
First Half

Sources:
Arnold, T. The Bottlenecks of Business(1940)
Benham and Lutz Economics, American Edition (1941)
Bowman and Bach Economic Analysis and Public Policy, Second Edition (1949)
*Federal Reserve System Federal Reserve Charts on Bank Credit, Money Rates and Business(Latest edition)
Hart, A.G. Money, Debt, and Economic Activity(1948)
Johnson, E. A. J. Some Origins of the Modern Economic World
Merrill, Lynch, et al., How to Read a Financial Report
*Peterson, S. Economics(1949)
Slichter, S. H. Modern Economic Society(1931)
*Slichter, S. H. The American Economy(1948)
Williamson, H. F. The Growth of the American Economy
*Wright, D. M. Democracy and Progress

*To be purchased by students.

 

PART I. Introduction

  1. The Economic Problem
    Benham: Ch. 1, General Survey
  2. Economic Institutions and Economic Development—An Historical Approach
    Johnson: Ch. 2, The Late-Medieval Background; Ch. 3, The Emergence of Capitalism; Ch. 4, The Beginnings of Scientific Technology
    Williamson: Ch. 3, The Organization of Production During the Colonial Period
    Bowman & Bach: Ch. 6, Economic Analysis and Public Policy

PART II. The Role of Markets in the Allocation of Resources and the Determination of Relative Prices

  1. A Comprehensive View of the Market System
    Peterson: Ch. 2, The Occupational and Industrial Structure; Ch. 3, Production and Income—Individual and National; Ch. 4, Framework and Problems of the Economic System
  2. The Determinants of Productive Power and the Organization of Production Under Capitalism
    Peterson: Ch. 5, Natural and Human Resources; Ch. 6, Capitalistic Production; Ch. 7, The Organization of Production; Ch. 8, Business Enterprise and the Corporate Form
    Merrill, Lynch, et al.: How to Read a Financial Report
    Peterson: Ch. 9, Finance, pp. 207-214 and 221-236
    Williamson: Ch. 14, The Capital Markets, 1789-1860; Ch. 28, The Investment Market After the War Between the States
  3. Price Determination and Resource Allocation
    Peterson: Ch. 17, The Role of Prices; Ch. 18, Supply, Demand, and Market Price
    Benham: Ch. 2, Markets, pp. 38-46
    Slichter: Ch. 10, Speculative Production, pp. 215-221
    Peterson: Ch. 19, Nature and Role of Demand and its Elasticity; Ch. 20, Cost and the Expansion and Contraction of Industries
    Williamson: Ch. 25, The Location of Economic Activity
    Peterson: Ch. 21, Output from Existing Capacity
  4. Public Regulation of Markets
    Peterson: Ch. 22, Monopoly and the Public Interest
    Williamson: Ch. 30, Industrial Concentration and Government anti-Trust Policy
    Arnold: Ch. 2, How Restraints of Trade Affect Your Standard of Living; Ch. 3, How Restraints of Trade Unbalance the National Budget; Ch. 7, Procedure under the Sherman Act; Ch. 8, The Clarification of Law; Appendix I
    Peterson: Ch. 23, Market Control Policies in the United States
    Wright: Ch. 8, The Problems of Competition
  5. The Production and Distribution of Wealth
    Slichter: Ch. 1, The American Economy; Ch. 6, How Good is the American Economy
    Wright: Ch. 7, Economic Goals and the Distribution of Wealth

PART III. Money, Banking, Price Levels and the National Income

  1. Money, Banking and Price Levels
    Peterson: Ch. 10, Exchange Media. Hand-to-Hand Money
    Bowman & Bach: Ch. 10, The Banking System, the Money Supply, and Investment; Ch. 11, The Government and the Money Supply
    R.B.: Banking and Monetary Statistics, Section 10, pp. 360-366
    National Debt Series: 2, Our National Debt and the Banks; 3, Our National Debt and Interest Rates; 6, Our National Debt and Life Insurance
    Hart: Ch. 10, Inflation and Deflation
  2. Mechanics of the International Monetary Exchange
    Benham: Ch. 26, Balance of Payments
    Hart: Ch. 15, The Foreign Exchange Market
    Benham: Ch. 27, Free Exchange Rate; Ch. 28, The Gold Standard

 

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Lecture Schedules and Reading Lists, 1942-1970”, Subfolder “49-55”.

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ECONOMICS I—CONCENTRATORS
1949-50
Second Half

Sources:
Benham and Lutz Economics, American Edition (1941)
*Bowman and Bach Economic Analysis and Public Policy,Second Edition (1949)
**Committee for Economic Development The Uses and Dangers of Direct Controls in Peacetime
**Economic Outlook Consumers, Workers Pay Cost of New Factories
Hart, A. G. Money, Debt, and Economic Activity(1948)
**International Bank for Reconstruction and Development Fourth Annual Report, 1948-49
**International Monetary Fund Annual Report, 1949
**Murray, P. The Steelworkers’ Case for Wages, Pensions and Social Insurance
*Peach and Krause Basic Data of the American EconomyRevised Edition (1949)
Peterson, S. Economics(1949)
Samuelson, P. Economics
Slichter, S. H. Basic Criteria Used in Wage Negotiations
**Slichter, S. H. Profits in a Laboristic Society
**Slichter, S. H. The Taft-Hartly Act
**Steel Industry Board Report to the President of the United States
**Voorhees, E. M. Statement before the Presidential Steel Board
Wright, D. M. Democracy and Progress

* To be purchased by students
**To be handed out in section meeting.

 

PART IV. The Distribution of Income

  1. Introduction
    Bowman & Bach: Ch. 28, Introduction to the Study of Income Distribution
  2. Personal Income Distribution
    Bowman & Bach: Ch. 29, Personal Income Distribution in the United States
    Wright: Ch. 7, Economic Goals and the Distribution of Wealth
  3. Determination of Returns to the Factors of Production
    Bowman & Bach: Ch. 30, Wage and Salary Income; Ch. 32, Property Income
  4. Labor Organization and Labor Markets
    Bowman & Bach: Ch. 31, The Economics of Labor Unionism
    Slichter: Basic Criteria Used in Wage Negotiations, pp. 7-31, and 36-40
    Bowman & Bach: Ch. 35, Government Policy and Labor, pp. 651-673
    Slichter, The Taft-Hartley Act
  5. The Wages, Pensions, Prices and Profits Controversy
    Economic Outlook: Consumers, Workers Pay Cost of New Factories
    Slichter: Profits in a Laboristic Society
    Murray, The Steelworkers’ Case for Wages, Pensions and Social Insurance, pp. 9-29
    Voorhees, Statement before the Presidential Steel Board
    Steel Industry Board, Report to the President of the United States, pp. 1-11

PART V. International Economic Problems

Benham: Ch. 25, The Theory of International Trade; Ch. 26, Balances of Payments
Peach & Krause: Section 5, International Trade and Finance
Hart: Ch. 15, The Foreign Exchange Market
Benham: Ch. 27, Free Exchange Rates; Ch. 28, The Gold Standard; Ch. 29, Exchange Control; Ch. 30, Import Duties and Quotas
Hart: Ch. 18, International Monetary Cooperation
International Monetary Fund: Annual Report, 1949, pp. 1-46
International Bank for Reconstruction and Development: Fourth Annual Report, 1948-49, pp. 7-37

PART VI. Public Finance and the Economic Problem

Peach & Krause: Section 6, Government Expenditures, Tax Collections, Public and Private Debt
Bowman & Bach: Ch. 36, Introduction to the Public Economy; Ch. 37, Public Expenditures; Ch. 38, Public Revenues—Taxation; Ch. 39, Taxation (Continued)
Peterson: Ch. 30, Public Policy and the Distribution of Income

PART VII. The Nature of Economic Fluctuations and Policies Directed Toward Their Control

Samuelson: Ch. 12, Saving and Investment
Peach & Krause, Review Section 1, National Income
Hart: Review Ch. 10, Inflation and Deflation
Bowman & Bach: Ch. 13, The Rate of Economic Growth; Ch. 14, Economic Fluctuations
Peach & Krause: Section 7, Price Levels and Business Fluctuations
Wright: Ch. 6, Progress and Instability
Bowman & Bach: Ch. 40, Monetary Policy and Economic Stabilization; Ch. 41, Fiscal Policy and Economic Stabilization; Ch. 42, Antimonopoly Measures, Wage-Price Policy, and Direct Controls
C.E.D.: The Uses and Dangers of Direct Controls in Peacetime

 

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Lecture Schedules and Reading Lists, 1942-1970”, Subfolder “49-55”.

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ECONOMICS I—NON-CONCENTRATORS
1949-50
Second Half

Sources:
Benham and Lutz Economics, American Edition (1941)
Bowman and Bach Economic Analysis and Public Policy,Second Edition (1949)
**Economic Outlook Consumers, Workers Pay Cost of New Factories
Hart, A. G. Money, Debt, and Economic Activity(1948)
**International Bank for Reconstruction and Development Fourth Annual Report, 1948-49
**International Monetary Fund Annual Report, 1949
Jewkes, J. Ordeal by Planning(1948)
*Peterson, S. Economics(1949)
*Schumpeter, J. A. Capitalism, Socialism and Democracy(1947)
*Slichter, S. H. The American Economy(1948)
Slichter, S. H. Basic Criteria Used in Wage Negotiations
**Slichter, S. H. Profits in a Laboristic Society
Sweezy, P. M. Socialism
*Wright, D. M. Democracy and Progress

* To be purchased by students
**To be handed out in section meeting.

 

PART IV. The Distribution of Income

  1. Personal Income Distribution
    Peterson: Ch. 24, Inequality—Extent and Significance; Ch. 25, Inequality in the Return from Labor
  2. Determination of Returns to the Factors of Production
    Peterson: Ch. 26, Productivity and Income; Ch. 28, The Basis of Property Incomes; Ch. 29, Profits, Interest, and Wealth
  3. Labor Organization and Labor Markets
    Bowman & Bach: Ch. 31, The Economics of Labor Unionism, pp. 492-501
    Peterson: Ch. 27, Wage-raising Policies and Practices
    Slichter: Basic Criteria Used in Wage Negotiations, pp. 7-31, and 36-40
    Bowman & Bach: Ch. 35, Government Policy and Labor, pp. 651-681
    Slichter: Ch. 2, Co-operation or Conflict in American Industry
  4. The Wages, Prices and Profits Controversy
    Economic Outlook: Consumers, Workers Pay Cost of New Factories
    Slichter: Profits in a Laboristic Society

PART V. International Economic Problems

Benham: Ch. 25, The Theory of International Trade; Review Chs. 26, 27, 28
Hart: Review, Ch. 15
Benham: Ch. 29, Exchange Control; Ch. 30, Import Duties and Quotas
Hart: Ch. 18, International Monetary Cooperation
International Monetary Fund: Annual Report, 1949, pp. 1-46
International Bank for Reconstruction and Development: Fourth Annual Report, 1948-49, pp. 7-37

PART VI. Public Finance and the Economic Problem

Bowman & Bach: Ch. 36, Introduction to the Public Economy; Ch. 37, Public Expenditures; Ch. 38, Public Revenues—Taxation; Ch. 39, Taxation (Continued)
Peterson: Ch. 30, Public Policy and the Distribution of Income

PART VII. The Nature of Economic Fluctuations and Policies Directed Toward Their Control

Peterson: Ch. 14, Total Demand and the Depression Problem; Ch. 15, Cyclical Fluctuations
Wright: Ch. 6, Progress and Instability
Slichter: Ch. 3, The Problem of Economic Stability
Wright: Ch. 11, Three Plans

PART VII. The Prospects for Economic Progress under Capitalism and Other Systems

Schumpeter: Part II, Can Capitalism Survive
Wright: Ch. 1, Science, Democracy, and Capitalism; Ch.2, The Moral Dilemma of Progress; Ch. 3, The Meaning and the Method of Democratic Progress; Ch.4, Political Democracy and the Alternatives to Competition
Schumpeter: Part III, Can Socialism Work?
Sweezy: Ch. 10, Can Socialism Provide Incentives to Work and to Efficiency?; Ch. 12, Are Socialism and Freedom Compatible?
Jewkes: Ch. 1, The Spread of Fashion; Ch.2, Is the Business Man Obsolete; Ch. 5, Confusion Among the Planners; Ch. 6, Planners as a Species; Ch. 7, Planning as a Scientific Method; Ch. 8, Planning and Prosperity; Ch. 9, Planning and Economic Stability; Ch. 10, Planning and Freedom

 

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Lecture Schedules and Reading Lists, 1942-1970”, Subfolder “49-55”.

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1949-50
HARVARD UNIVERSITY
ECONOMICS I
Non-Concentrators

Mid-Year Examination
January, 1950

I
(One hour and a half)
Answer both questions

  1. A member of the Board of Governors of the Federal Reserve System has recently advised Congress that the policy of the Treasury has made it impossible for the Federal Reserve authorities to use their powers as controllers of the country’s money supply. Explain carefully why Treasury and Federal Reserve policies must be coordinated and in what ways they are likely to come in to conflict. Illustrate by reference to the national debt and other problems which arose in the war and the postwar periods.
  2. The problem of the allocation of scarce resources among a multitude of possible uses is one which is largely solved automatically in our economy.
    Explain how this problem is solved. Give careful attention to the role of and inter-relationships among each of the following: consumer decisions, producer decisions and markets.

II
(One hour and a half)
Answer any THREE questions

  1. The monetary control authorities generally attempt to control the level of prices and the level of income through control of the supply of money. Using the equation of exchange as an analytic framework, analyze how a policy which changes the supply of money might work out.
  2. Answer either (a) or (b) of the following
    1. Distinguish “rate level” from “rate structure.” Discuss the criteria relied on by regulatory commissions in determining each for a public utility, noting the major problems involved.
    2. What are the major economic arguments for and against monopoly? In the light of these arguments what elements do you think should be contained in any balanced government policy toward monopoly?
  3.      a. Explain the relationship between gross and net national product; between national income and aggregate personal income.
    1. Discuss a purpose for which each one of the above aggregates can be used.
    2. In the light of the above explanation and additional pertinent facts comment on the following statement: “A comparison of national income at the depth of a depression with that during a period of prosperity overstates the impact of the depression on the consuming public.”
  4. Answer TWO of the following:
    1. Explain how speculative markets control the rate of use of periodically produced goods.
    2. Restate the Malthusian thesis (law of population) using the principle of diminishing returns.
    3. Distinguish the short-run stabilization and long-run adjustment of the market for farm products. Consider both the objectives and the implied policies.
    4. Discuss the respective roles of technological change and savings and capital accumulation in the emergence of modern economic society.

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Economics 1, Exams 1939-1962”.

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1949-50
HARVARD UNIVERSITY
ECONOMICS I
Concentrators

Mid-Year Examination
January, 1950

 

I
(One hour and a half)
Answer both questions

  1. A member of the Board of Governors of the Federal Reserve System has recently advised Congress that the policy of the Treasury has made it impossible for the Federal Reserve authorities to use their powers as controllers of the country’s money supply. Explain carefully why Treasury and Federal Reserve policies must be coordinated and in what ways they are likely to come in to conflict. Illustrate by reference to the national debt and other problems which arose in the war and the postwar periods.
  2. Consumers’ preferences change, thus increasing the demand for a certain product which is produced under conditions of pure competition. Trace in precise fashion the results of this increase in demand on the output of the individual firms and of the industry, and on the price of the product:
    1. in the short run,
    2. in the long run.

 

II
(One hour and a half)
Answer any THREEquestions

  1. The monetary control authorities generally attempt to control the level of prices and the level of income through control of the supply of money. Using the equation of exchange as an analytic framework, analyze how a policy which changes the supply of money might work out.
  2. What are the major economic arguments for and against monopoly? In the light of these arguments what elements do you think should be contained in any balanced government policy toward monopoly?
  3. Answer TWO of the following:
    1. Discuss three important factors determining the location of economic activity.
    2. “When there is oligopoly, even without collusive agreements, price competition will tend to be ‘nonaggressive’, and price will usually be higher than otherwise.” Discuss.
    3. “Competition on a nonprice basis has become more and more important in recent years.” Discuss the effects of this trend on the allocation of resources.
    4. Discuss the process of hedging in a commodity market and its significance to the non-speculative businessman.
  4. Define Gross National Output (Product), National Income, and Income Payments (Personal Income).
    1. What is the general use of these concepts and how might each one be used specifically?
    2. How is Gross national Output related to Aggregate Demand or Expenditure?
    3. How will the relation between National Income and income Payments vary in prosperity and depression?
    4. Can we place great reliance on these concepts as measures of economic welfare?

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Economics 1, Exams 1939-1962”.

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1949-50
HARVARD UNIVERSITY
ECONOMICS I
Non-Concentrators

Final Examination
June, 1950

I
(One hour and a half)
Answer both questions

  1. Investment is often said to play a “strategic role” in the business cycle. What is meant by this statement? What are its implications for counter-cyclical policy?
  2. “Remuneration for labor services and a share in the social dividend are the only sources of personal income under socialism. Therefore, the socialist planners can ignore rent, interest, and profits even though they are fundamental to the functioning of a capitalist system.” Discuss.

II
(One hour and a half)
Answer both questions

  1. Without stating general conclusions as to the merits of either side, explain the basic issues involved in the dispute between labor and industry over wages, prices and profits.
  2. Discuss the elements to be considered in the establishment of a model tax system for the United States at the present level of expenditures. (This includes all levels of Government.)

III
(Thirty minutes)
Answer one question

  1. An adverse balance of payments can be corrected by (1) changes in exchange rates, (2) changes in prices and incomes, or (3) exchange and import controls.
    1. Discuss briefly how each of the above three methods may be used to correct a country’s adverse balance of payments.
    2. Discuss the extent to which the member countries of the International Monetary Fund may make use of the above three methods.
  2. Comment on the following statement: “The object of American tariff policy should be to impose sufficient duty on goods of every kind to equalize the cost of production at home and abroad.”

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Economics 1, Exams 1939-1962”.

________________________

1949-50
HARVARD UNIVERSITY
ECONOMICS I
Concentrators

Final Examination
June, 1950

I
(One hour and a half)
Answer both questions

  1. Investment is often said to play a “strategic role” in the business cycle. What is meant by this statement? What are its implications for counter-cyclical policy?
  2. The establishment of product prices and of returns to factors of production are two sides of the same economic process.
    1. Analyze the forces of supply and demand which determine the return to a factor of production.
    2. Explain (in terms of producer and consumer decisions) how these returns determine and are determined by the prices of products.

II
(One hour and a half)
Answer both questions

  1. Without stating general conclusions as to the merits of either side, explain the basic issues involved in the dispute between labor and industry over wages, prices and profits.
  2. Discuss the elements to be considered in the establishment of a model tax system for the United States at the present level of expenditures. (This includes all levels of Government.)

III
(Thirty minutes)
Answer one question

  1. An adverse balance of payments can be corrected by (1) changes in exchange rates, (2) changes in prices and incomes, or (3) exchange and import controls.
    1. Discuss briefly how each of the above three methods may be used to correct a country’s adverse balance of payments.
    2. Discuss the extent to which the member countries of the International Monetary Fund may make use of the above three methods.
  2. Comment on the following statement: “The object of American tariff policy should be to impose sufficient duty on goods of every kind to equalize the cost of production at home and abroad.”

Source:  Harvard University Archives. Department of Economics. Course Reading lists, syllabi, and exams 1913-1992, Box 2, Folder “Economics 1, Exams 1939-1962”.

Image Source:  H. H. Burbank in the Harvard Class Album 1947.

Categories
M.I.T. Suggested Reading Syllabus

M.I.T. Open Economy Macroeconomics. Syllabus and bibliography. Dornbusch, 2000.

 

A genuine regret from my graduate school education was that I had not taken a course with Rudiger Dornbusch. Ex post it became clear that I would have been personally better served not having taken economic history at M.I.T. (all told, I had four semesters of solid economic history courses as an undergraduate at Yale), but unfortunately nobody shared with me the tip to take a trip on this rising star of open economy macroeconomics who began teaching at M.I.T. in 1975.

Rudi Dornbusch inspired many a classmate of mine at M.I.T. and I am sure many an economist beyond. (c.v. at M.I.T.)

_______________

14. 582 — OPEN ECONOMY MACROECONOMICS

R. Dornbusch 
Spring 2000

COURSE OUTLINE:

I.    Some Monetary History

II.    The Basic Open Economy Model

Gold Standard and the Classical Open Economy 
The Dependent Economy Model

III.    Nominal Rigidities and Policy.

Money, Wages, and Employment. 
PPP and Real Exchange Rates 
Pricing in the Open Economy

IV.    Intertemporal Trade.

V.    Finance, Exchange Rates, and Macro Implications

Capital Mobility, Exchange Rates, and Employment. 
Portfolio Diversification and Risk Premia

VI.    Policy Issues

Target Zones 
Currency Boards 
Stabilization and Exchange Rate Management 
Global Capital Markets 
Feldstein-Horioka and Capital Mobility 
Balance of Payments Crises 
Vulnerability, Crises, and Contagion 
EMU and New International Financial Architecture

TEXTS AND SOURCES:

Required readings are denoted with two asterisks (**), recommended readings with one asterisk (*).

** Grossman, G. and K. Rogoff (eds.). Handbook of International Economics. Vol. III, North Holland, 1995.
** Obstfeld, M. and K. Rogoff. Foundations of International Macroeconomics, MIT Press, 1996
Obstfeld, M. and K. Rogoff. Foundations of International Macroeconomics Workbook, MIT Press, 1998.
* Dornbusch, R. Open Economy Macroeconomics, Basic Books, 1980.
* Dornbusch, R. Exchange Rates and Inflation, MIT Press, 1988.
** See also the IMF website (http://www.imf.org) or recent IMF research reports.

Several journals are available online through JSTOR, including The Journal of Money, Credit, and Banking, The Journal of Economic Perspectives, The Journal of Political Economy, The Quarterly Journal of Economics, and The American Economic Review. Please visit JSTOR’s main page if you experience difficulty connecting to any articles from these journals to determine whether you qualify to use their site.

I.  Some Monetary History.

  • Bordo, M. and Capie. Monetary Regimes in Transition. Cambridge University Press, 1994.
  • Bordo, M. and A.Schwartz (eds.). A Retrospective on the Classical Gold Standard 1821- 1931. University of Chicago Press and NBER, 1984.
  • Cassel, G.  Money and Foreign Exchange After 1914, Constable, 1922.
  • Eichengreen, B. (ed) The Gold Standard in Theory and History, Methenu, 1985, Chapter 1.
  • DeGrauwe, P. International Money Post War Trends and Theories. Clarendon Press 198x.
  • Friedman, M.  Money Mischief. Harcourt Brace Hovanovich, 1992.
  • Kindleberger C.  Manias, Panics and Crashes : A History of Financial Crises. Basic Books 1989.
  • Kindleberger C. A.  Financial History of Western Europe. Allen & Unwin 1984.
  • Obstfeld, M. and A.M. Taylor.  Global Capital Markets: Integration, Crises and Growth, unpublished manuscript.
  • Taussig, F.  International Trade, Macmillan,1928. Parts II and III.
  • Yeager, L.  International Monetary Relations, Harper & Row, 1966 Part II.

II. The Basic Open Economy Model.

Gold Standard and The Classical Open Economy

  • ** Calvo, G. “Devaluation: Level versus Rates” Journal of International Economics, Vol ll, No. 2, Pages 165-172, May 1981.
  • * Dornbusch, R. and Mussa, M. “Consumption, Real Balances and the Hoarding Function”, International Economic Review, June 1975. Also in Exchange Rates and Inflation, Chapter 18.
  • ** Dornbusch, R., S. Fischer and P. Samuelson.“Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods” American Economic Review Dec 1977. Also in Exchange Rates and Inflation, Chapter 14.
  • Dornbusch, R.  Open Economy Macroeconomics. Chapter 7.

The Dependent Economy Model

  • Calvo, G. and Rodriguez, C. “A Model of Exchange Rate Determination Under Currency Substitution and Rational Expectations”, Journal of Political Economy, No. 3, 1977, pgs 617-625.
  • * Dornbusch, R. “Real and Monetary Aspects of the Effects of Exchange Rate Changes” in Exchange Rates and Inflation, MIT Press 1988, Chapter 3.
  • * Dornbusch, R.  Open Economy Macroeconomics. Chapter 6.
  • ** Mundell, R. A. Monetary Theory, chapt. 10.
  • Salter,W. “Internal and External Balance” Economic Record, 1960.
  • Swan, T. “Economic Control in a Dependent Economy” Economic Record, 1960.

III. Nominal Rigidities and Policy.

Money, Wages and Employment

  • Brock, P. “Investment, the Current Account and the Relative price of Nontraded Goods in a Small Open Economy.” Journal of International Economics, May 1988.
  • ** Calvo, G. “Staggered Contracts and Exchange Rate Policy” in J.Frenkel (ed.) Exchange Rates and International Macroeconomics. University of Chicago Press and NBER, 1983.
  • ** Dornbusch, R.  Open Economy Macroeconomics, chapter 9.
  • * Dornbusch, R. “PPP Exchange Rate Rules and Macroeconomic Stability” In Exchange Rates and Inflation, Chapter 11.
  • Dornbusch, R. “Real Exchange Rates and Macroeconomics: A Selective Survey” Scandinavian Journal of Economics 91: (2), 1989.
  • Kouri, P. “Profitability and Growth in a Small Open Economy” in A. Lindbeck(ed.) Inflation and Employment in Open Economies, North Holland 1979.
  • * Krugman, P. and Taylor,L. “The Contractionary Effects of Devaluation”, Journal of International Economics, August 1978 pp. 445-456.
  • Lizondo, S. and P. Montiel. “Contractionary Devaluation in Developing Countries. An Analytical Survey.” International Monetary Fund Staff Papers, March 1989.
  • ** Obstfeld, M. and Rogoff, K. “Sticky-Price Models of Output, the Exchange Rate, and the Current Account” In Foundations of International Macroeconomics, Ch.9.
  • Rodriguez, C. “A Stylized Model of the Devaluation-Inflation Spiral.” International Monetary Fund Staff Papers, March 1978.
  • Dornbusch, R.  The Effectiveness of Exchange-Rate Changes, Oxford Review of Economic Policy, Vol. 12, No. 3. Pgs. 26-38.
  • ** Dornbusch, R. “The Latin Triangle“

PPP and Real Exchange Rates.

  • Keynes, J.M.  A Tract on Monetary Reform, MacMillan, 1923, chapt. 3.
  • Dornbusch, R. “Purchasing Power Parity” In Exchange Rates and Inflation,Chapter 5.
  • * Frankel, J. and A. Rose. “A Panel Project on Purchasing Power Parity: Mean Reversion Within and Between Countries”Journal of International Economics,40(1) 209-224, 1996.
  • Marston, R. “Real Exchange Rates and Productivity Growth in the United States and Japan” in S. Arndt and D. Richardson (eds.) Real-Financial Linkages Among Open Economies, Cambridge: MIT Press.
  • Obstfeld and Rogoff, K. “Perspectives on PPP and Long-Run Real Exchange Rates” chapter 32 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995. 

Pricing in the Open Economy.

  • Dornbusch, R. “Exchange Rates and Prices” American Economic Review, March 1987. Also in Exchange Rates and Inflation, Chapter 5.
  • ** Frankel, J. and A. Rose “Empirical Research on Nominal Exchange Rates.” chapter 33 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995.
  • * Goldberg P.K. and M. Knetter “Goods Prices and Exchange Rates: What have we learned?” Journal of Economics Literature, vol. XXXV, September 1997, pp.1243-1272.

IV. Intertemporal Models Of The Open Economy

  • Obstfeld, M. and Rogoff,K.  Foundations of International Macroeconomics, parts 1-4.
  • * Obstfeld, M. and Rogoff, K. “The Intertemporal Approach to the Current Account” chapter 34 in Grossman G. and K. Rogoff (eds.) Handbook of International Economics, Vol. III., North Holland, 1995.
  • Fisher, E. O’N and K. Kasa.  Generational Accounting in Open Economies in FRBSF Economic Review, 1997, Number 3.
  • * Dornbusch, R. “Real Interest Rates, Home Goods and Optimal External Borrowing, Journal of Political Economy, Feb 1983 (also in Exchange Rates and Inflation, Chapter 16.)
  • ** Dornbusch, R. “Notes  on Intertemporal Trade”.

V. Finance, Exchange Rates and Macro Implications 

Capital Mobility, Exchange Rates, and Employment.

  • * Dornbusch, R. “Expectations and Exchange Rate Dynamics”, Journal of Political Economy, Dec. 1976 (also in Exchange Rates and Inflation, chapter 4)
  • Frankel, J. and K. Froot. “Using Survey Data to Test Propositions Regarding Exchange Rate Expectations.” American Economic Review Vol. 77, 1987, pp. 133-153.
  • Frenkel, J. and Mussa, M. “Asset Markets, Exchange Rates and the Balance of Payments” in R. Jones and P. Kenen (eds.) Handbook of International Economics, Vol.2, North-Holland 1985.
  • * Krugman,P.  Exchange Rate Instability, MIT Press, 1988.
  • Taylor M. “The Economics of Exchange Rate”.Journal of Economic Literature, Vol.XXXIII, March 1995, pp.13-47.
  • Mundell, R.  International Economics, chapts. 14 -18.
  • De Long, J. Bradford, Shleifer A. , Summers L. , Vishny R.  “Noise Trader Risk in Financial Markets” Journal of Political Economy; V98 n.4 August 1990, pp. 703-38.
  • Frankel, Jeffrey A.; Galli, Giampaolo; Giovannini, Alberto, Editors.  “The Microstructure of Foreign Exchange Markets”.  National Bureau of Economic Research Conference Report Series. Chicago and London: University of Chicago Press, 1996.

Portfolio Diversification and Risk Premia.

  • * Dornbusch, R. “Exchange Rate Risk and the Macroeconomics of Exchange Rate Determination, in Exchange Rates and Inflation, Chapter 7.
  • Frankel, J. and Froot, K. “Forward Discount Bias: Is it an Exchange Risk Premium?”Quarterly Journal of Economics 104:1, 139-162.
  • ** Froot, K. and R. Thaler. “Anomalies: Foreign Exchange”,Journal of Economics Perspectives, vol 4, No. 3, Summer 1990, Pages l79-l92.
  • Krugman, P. “Consumption Preferences, Asset Demands, and Distribution Effects in International Financial Markets.”NBER Working Paper No. 651, March 1981.
  • Mussa,M. “Official Intervention and Exchange Rate Dynamics” in J.Bhandari (ed.) Exchange Rate Management Under Uncertainty,MIT Press 1985.
  • Sachs, J. and Wyplosz, C. “Real Exchange Rate Effects of Fiscal Policy.” NBER Working PaperNo. 1256, Jan. 1984.
  • Neely, Christopher J. “Technical Analysis and the Profitability of U.S. Foreign Exchange Intervention”.  Federal Reserve Bank of St. Louis, July/August 1998.
  • Solnik, Bruno.  “Global Asset Management: Too Hedge or Not to Hedge–a Question That Cannot be Ignored”.  The Journal of Portfolio Management, Summer 1998.
  • Stein, Jerome L. and G. Paladino.  Recent Developments in International Finance: A Guide to Research Journal of Banking and Finance,21 (1998) 1685-1720.
  • Stulz, Rene M.  “International Portfolio Choice and Asset Pricing: An Integrative Survey”, in R. Jarrow et al (eds)Handbooks in OR & MS, vol. 9, Elsevier Science B.V., 1995.

VI. Policy Issues

Target Zones

  • Bertola, G. “Continuos-Time Models of Exchange Rates and Intervention ” In F. van der Ploeg, ed.Handbook of International Macroeconomics, Blackwell, 1994.
  • Bertola, G. and Caballero, R.“Target Zones and Realignments”, American Economic Review, 1992.
  • ** Krugman, P. and M. Miller. (eds.) Exchange Rate Targets and Currency Bands. Cambridge University Press, 1992.
  • ** Svensson, L. “An Interpretation of Recent Research on Exchange Rate Target Zones.”Journal of Economics Perspectives, Vol 6, No. 4, pp. 119-144, Fall 1992.
  • Werner, A. “Exchange Rates and Target Zone Width”. Economic Letters. Dec 1992.

Exchange Rate Regimes and Currency Boards

  • Calvo, G. “On Dollarization”,1999 (www.bsos.umd.edu.econ.calvo.htm)
  • Dornbusch R. and F. Giavazzi,“Hard Currency and Sound Credit: A Financial Agenda for Central Europe” May 1998.
  • Eichengreen, B.“The Choice of Exchanage Rate Regime” (incomplete).
  • Eichengreen, B.  Golden Fetters, Oxford University Press, 1992.
  • Friedman, M. “The Case for Flexible Exchange Rates” in his Essays in Positive Economics. U. of Chicago Press, 1953.
  • **Goldstein, M. Exchange Rate System and the IMF. Institute for International Economics, 1995
  • Hanke, S. and K. Schuler  Currency Boards for Developing Countries. ICS Press, 1994.
  • List of References to Currency Boards by C. Broda.
  • Mihalke D. “Currency Board Arrangements: Issues and Experiences”.International Monetary Fund Occasional Paper No. 151, 1997.
  • Mundell, R. “A Theory of Optimum Currency Areas”, American Economic Review 51, September 1961.
  • Obstfeld, M. and K. Rogoff, “The Mirage of Fixed Exchange Rates” Journal of Economic Perspectives 9, Fall 1995
  • Perry G. E. “Currency Boards and External Shocks: How Much Pain, How Much Gain?”, World Bank Latin American and Caribbean Studies, February 1997.
  • Taussig, F. International Trade, Macmillan, 1928.  Parts II and III.
  • Tornell, A. and A. Velasco, “Fixed vs. Flexible Exchange Rates: Which Provides More Fiscal Discipline?”NBER WP. No. 5108, 1995.
  • * Williamson, J. What Role for Currency Boards? Institute for International Economics, Washington D.C., Sep. 1995.
  • Ghosh, A., A. Gulde and H. Wolf.  “Currency Boards: The Ultimate Fix?” IMF, wp. 98/8
  • ** Williamson, J.  The Crawling Band as an Exchange Rate Regime: Lessons from Chile, Colombia and Israel, Institute of International Economics, 1996.

Stabilization and Exchange Rate Management

  • Alesina, A. and A. Drazen. “Why are Stabilizations Delayed?” American Economic Review, December 1991.
  • Bruno, M. et. al.  Lessons of Economic Stabilization and its Aftermath.MIT Press, 1991.
  • Calvo, G. “Incredible Reforms” in G.Calvo (ed.) Debt, Stabilization and Development. Oxford: Basil Blackwell, 1989.
  • Caballero, R. Structural Volatility In Modern Latin America, April, 2000
  • Calvo, G. and C. Vegh. “Credibility and the Dynamics of Stabilization Policy: A Basic Framework.” IMF, Staff Papers, November 1990.
  • * Dornbusch, R. “Credibility and Stabilization”, Quarterly Journal of Economics, August 1991, pp. 837-850. Also in R.Dornbusch Stabilization, Debt, and Reform, Prentice Hall 1993.
  • * “The New Classical Macroeconomics and Stabilization Policy.”American Economic Review, May 1990. Also in R. Dornbusch Stabilization, Debt, and Reform, Prentice Hall 1993.
  • Dornbusch, R., and S. Edwards, S (eds)The Macroeconomics of Populism in Latin America. University of Chicago Press, 1991.
  • Dornbusch, R. and Fischer, S. “Stopping Moderate Inflations.” World Bank Review, 1992.
  • Dornbusch, R., Goldfajn, I. and Valdes, R. “Currency Crisis and Collapses”, Brookings Papers, 2, 1995.
  • Drazen, A. and Helpman, E. “Stabilization With Exchange Rate Management” Quarterly Journal of Economics, 1987.
  • Fernandez, R. and D. Rodrik. “Resistance to Reform. Status Quo Bias in the Presence of Individual Specific Uncertainty” American Economic Review, December 1991.
  • Goldfajn I. and R. O. Valdes“The Aftermath of Appreciations”. NBER WP#5650, July 1996.
  • ** Vegh, C. “Stopping High Inflation: An Analytical Overview,” International Monetary Fund, Staff Papers, September 1992.
  • * Williamson, J. “The Crawling Band as an Exchange Rate Regime: Lessons from Chile, Colombia and Israel”, Institute of International Economics,1996.

Feldstein-Horioka and Long Term Capital Mobility.

  • Cardoso, E. and R. Dornbusch. “Foreign Private Capital Flows” Handbook of Development Economics, Vol II, North Holland, 1989.
  • **Dooley, M., J. Frankel and D. Mathieson “International Capital Mobility: What do Saving-Investment Correlations Tell US?” International Monetary Fund, Staff Papers, September 1987.
  • ** Feldstein, M. and Horioka, C. “Domestic Savings and International Capital Flows”. Economic Journal, June 1980, pages 314-329.
  • Frankel, J. “Measuring International Capital Mobility: A Review.”American Economic Review. Papers and Proceedings. May 1992.
  • Harberger, A.“Vignettes on the World Capital Market”, American Economic Review, May 1980.
  • ** Ventura, J. & A. Kraay, “Current Accounts in Debtor and Creditor Countries”, March 1999. ECONOMETRICS SEMINAR (Joint Harvard/MIT) 

Balance of Payments Crises.

  • Calvo, G. “Balance of Payments Crises in a Cash in Advance Economy”, Journal of Money, Credit and Banking,1987.
  • Dornbusch, R. “Collapsing Exchange Rate Regime”, Journal of Development Economics, Vol 27, No 1-2, Pgs 7l-83, October 1987.
  • Flood, R. and P.Garber, 1984, “Collapsing Exchange Rate Regimes: Some Linear Examples.” Journal of International Economics,1/2, 1-13.
  • Froot K and M. Obstfeld, “Exchange Rate Dynamics Under Stochastic Regime Shifts: A  Unified Approach”, NBER WPNo. 2835, February 1989.
  • ** Garber, P. and L. Svensson “The Operation and Collapse of Fixed Exchange Rate Regimes” chapter 36, section 3, in Grossman G. and K. Rogoff (eds.) Handbook of International Economics,Vol. III., North Holland, 1995.
  • ** Krugman, P. “A Model of Balance of Payments Crises.”Journal of Money, Credit and Banking, 3, 1979 ,311-325.
  • ** Salant,S. and D. Henderson, 1978,”Market Anticipations of Government Policies and the Price of Gold” Journal of Political Economy, 4, 627-648.

Crises and Contagion

  • Caballero, R. and Krishnamurthy, “Emerging Markets Crises: An Asset Market Perspective”, MIT mimeo, 1998.
  • Calvo, Guillermo A.”Capital FLows and Capital-Market Crises: The Simple Economics of Sudden Stops”, unpublished manuscript, U. of Maryland, 1998 (http://www.bsos.umd.edu/econ/ciecalvo.htm)
  • Calvo, Guillermo A. “Understanding the Russian Virus”, unpublished manuscript, U. of Maryland, 1998 (http://www.bsos.umd.edu/econ/calvo.htm)
  • Chang and Velasco, “Financial Crises in Emerging Markets: A Canonical Model” NBER WP No. 6469, 1997.
  • Diaz Alejandro, C. “Good-bye Financial Repression, Hello Financial Crisis” Journal of Development Economics, 19, 1985.
  • Dornbusch,R. “Asian Themes”, (http://web.mit.eud/rudi/www)  Feb. 1998.
  • Dornbusch,R. “Brazil’s Incomplete Stabilization and Reform”, Brookings Papers on Economic Activity 1:1997, pp.367-404 (http://web.mit.eud/rudi/www.)
  • Eichengreen B., A. Rose, C. Wyplosz. “Contagious Currency Crises”. Scandinavian Journal of Economics,December 1996.
  • Goldfajn, I. and Valdes, “Capital Flows and the Twin Crisis: The Role of Liquidity” IMF WP 97/87.
  • IMF, World Economic Outlook, Fall 1998 (http://www.imf.org)
  • IMF, International Capital Markets, Fall 1998 (http://www.imf.org)
  • *Kaminsky G. and C.Reinhart, “On Crises, Contagion and Confusion.” Unpublished manuscript, George Washington University and U. of Maryland, 1998.
  • Kaminsky, G. “Leading Indicators of Currency Crises” Board of Governors of the Federal Reserve, mimeo.  Board of Governors of the Federal Reserve, December, 1997.
  • Krugman P. “The Myth of Asia’s Miracle”. Foreign Affairs, November/December 1994.
  • Krugman P. “What happened to Asia?” January 1998 (http://web.mit.edu/krugman/www)
  • Obstfeld, M., “The Logic of Currency Crises”, Cahiers Economique and Monetaires, 43, 1995.
  • ** Tobin, J.  “A Proposal for International Monetary Reform” in his Essays in Economics, MIT Press, 1982, chapt. 20.

EMU and New International Financial Architecture

  • Dornbusch,R., C.Favero and F. Giavazzi “Challenges for the European Central Bank” Economic Policy, April 1998, pp. 15-64, CEPR (http://web.mit.edu/rudi/www).
  • Eichengreen, B. “Toward a New International Financial Architecture: A Practical Post-Asia Agende”, IIE Press, 1999.
  • Eichengreen, B.”European Monetary Unification: Theory, Practice, Analysis”, MIT Press, 1997.
  • Fischer, S. “Reforming the International Monetary System” David Finch lecture, November, 1998 (http://www.imf.org/external/np/speeches/1998/110998.HTM).
  • Fischer, S. “On the Need for an International Lender of Last Resort” New York, January 3, 1999.
  • McCaughley, “The Euro and the Dollar”, Princeton Essays in International Finance, 1997

Source: August 17, 2000 webpage capture by Internet Archive Wayback Machine.

Image Source: Rudiger Dornbusch from the website of the MIT Museum.

Categories
Chicago Exam Questions Suggested Reading Undergraduate

Chicago. Undergraduate Money and Banking. Exams, readings. Friedman, 1946-49

 

Besides teaching in the core graduate price theory course at Chicago, Milton Friedman also covered undergraduate money and banking upon joining the faculty of the economics department. Below some material transcribed from a folder of course material found in Milton Friedman’s papers at the Hoover Institution Archives. Where answers were provided to some examination questions, they have been transcribed [and placed in square brackets] and included below.

Fun Fact: According to class rolls kept by Friedman, Marc Nerlove was a student in the Autumn 1951 Money and Banking class taught by Friedman.

_________________

Course Announcement and Description

[Economics] 230. Introduction to Money and Banking. Study of factors which determine the value of money in the short and in the long run; and operation of the commercial banking system and its relation to the price level and general business activity. Prereq: Soc Sci 2 and Econ 210, or equiv. Aut: MWF 10:30 Friedman; Win: MWF 2:30; Mints.

Source:   University of Chicago. Announcements. The College and the Divisions, Sessions of 1947-1948. Vol. XLVII, No. 4 (May 15, 1947), p. 224.

_________________

Text for Economics 230:

L. V. Chandler, The Economics of Money and Banking. Harper & Brothers.

The Book will be used again as a text when the course is given in the Winter Quarter. Give the number in class as that of the Autumn, 1947.
Reserve List & Bookstore.

_________________

Economics 230
Autumn 1947
Library Book List

Robertson, D. H. Money

Gregory, T. E. The Gold Standard and Its Future (3rd)

Board of Governors. Federal Reserve System.Its Purposes and Function

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Economics 230
Autumn 1951

Supplementary Readings and Problem for Reading Period

Readings

Text: Lester Chandler, Economics of Money and -Banking

  1. American Economic Association, Readings in Monetary Theory, edited by Friedrich Lutz and Lloyd W. Mints.
  2. Goldenweiser, E.A., American Monetary Policy.
  3. Gregory, T.E., The Gold Standard and Its Future.
  4. Hardy, C.O., Credit Policies of the Federal Reserve System.
  5. Keynes, J.M., Essays in Persuasion.
  6. Mints, Lloyd W., Monetary Policy for a Competitive Society.
  7. Robertson, D.H., Money.
  8. S. Board of Governors of the Federal Reserve System, The Federal Reserve System, Its Purposes and Functions.

 

Problem

            For a convenient date in 1951, estimate the maximum amount of currency and deposits that would have been outstanding if the banking system had used all the possibilities of monetary expansion available under the then existing laws and regulations about reserve requirements of member and non-member banks and about reserve requirements of Federal Reserve Banks. For purposes of the computation, assume (a) an unchanged amount of Treasury currency outstanding; (b) elimination of Treasury deposits with Federal Reserve Banks through purchase of government securities held by the Federal Reserve Banks. With respect to all other factors—such as percentage distribution of public’s money holdings among currency, demand deposits, and time deposits—you are to choose your own assumptions, the choice of reasonable assumptions and the presentation of evidence for them being an essential part of the problem.

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MIDQUARTER EXAMINATION IN ECONOMICS 230
[no date, though likely 1947]

  1. Indicate the factors that principally determine—
    1. (15 points) The ratio of the amount of currency in circulation to the amount of bank deposits.
    2. (15 points) The ratio of the amount of bank deposits to the amount of reserves held by the banking system when there are no legal reserve requirements.
  2. (35 points) In country A, important new discoveries of oil are made, driving down the price of oil in that country relative to the world price. Assume that this is the only important change relevant to international trade. Trace the effects of this change on exchange rates, gold flows, price levels, imports and exports, and incomes, in country A and in the rest of the world on the assumption (a) that a strict gold standard is in operation; (b) that inconvertible paper standards and fluctuating exchanges are in operation.
  3. (35 points) Explain in detail the effects on Bank A and on the banking system as a whole arising from the deposit in bank A of $100 of newly-printed currency. The deposit is made by a worker who has just received the currency from the government. Assume the bank is fully exploiting its lending power.

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Economics 230
Midquarter Examination
November 5, 1948

  1. (25 points) It has been argued that it would be profitable for a member bank to borrow from its Federal Reserve bank even at a rate of interest considerably higher than the rate the member bank charges to its customers; and that this is so because one dollar of additional reserves can support several dollars of additional deposits. For example, if $1 of additional reserves can support $5 of additional deposits, it is argued that it would be profitable (if we neglect the cost of making the loan) for a member bank that can lend at 6% to borrow at any rate up to 30%. Evaluate this argument.
  2. (25 points)
    1. Nondeposit currency currently in circulation in the United States include Federal Reserve notes, silver certificates, United States notes (greenbacks) and National Bank Notes. In addition, there is a large volume of gold certificates outstanding but not in circulation. Indicate brieflythe historical origin of each of these types of currency, and the major episode in our monetary development each one symbolizes.
    2. What is the FDIC? What, in your view, is its essential function (which may not be the same as its announced purpose) in our current monetary structure?
  3. (50 points) Indicate whether the operation described in the first column would, in the first instance, increase (+), leave unchanged (0), or reduce (-) the item listed at the top of each column. For simplicity, assume (a) that nonmember banks are notinvolved in any of the transactions, (b) that the Treasury deposits all funds received in a Reserve Bank and pays for all expenditures by checks on a Reserve Bank, (c) that all nondeposit currency is in the form of Federal Reserve Notes. Take account only of the essentially bookkeeping effects of the operation, not of subsequent effects. For example, in operation (1) the decline in currency outside banks and the Treasury might so disturb the public’s relative holdings of deposit and nondeposit currency as to lead subsequently to a conversion of deposits into nondeposit currency. Do nottake such subsequent effects into account.
    [+1 for each correct, -1 for each wrong, 0 for no entry]

 

Operation Currency outside banks and Treasury Member bank Federal Reserve Bans
Demand Deposits Excess Reserves Deposits Excess Gold Reserves
Purchase of government bond by public
From Federal Reserve Bank
(1) with non deposit currency [-] [0] [0] [0] [+]
(2) by check [0] [-] [-] [-] [+]
From Treasury
(3) with non deposit currency [-] [0] [0] [+] [0]
(4) by check [0] [-] [-] [0] [0]
From public
(5) with non deposit currency [0] [0] [0] [0] [0]
(6) by check [0] [0] [0] [0] [0]
Purchase of government bond by Treasury from
(7) public a [0]
b [+]		 [+]
[0]		 [+]
[0]		 [0]
[-]		 [0]
[0]
(8) member bank [0] [0] [+] [0] [0]
(9) Federal Reserve bank [0] [0] [0] [-] [+]
Conversion of demand deposit by public into
(10) non deposit currency [+] [-] [+] and [0]
[-] and [-]
[only if both]		 [0]
(11) time deposit [0] [-] [0] [0] [0]

_________________

Final Examination for Economics 230
Autumn, 1946
3 hours and overnight.

Part I

  1. Define briefly the following terms:
    1. Required reserves
    2. Open market policy
    3. Gold points
    4. Rediscount rate
    5. Inconvertible paper currency
    6. Transactions velocity of circulation
    7. The equation of exchange
  2. What techniques are available to the Federal Reserve System for controlling the total volume of currency? How does each technique work? Under what conditions is each technique likely to be effective?
  3. It is often asserted that in returning to gold at the pre-first-world-war parity Britain “overvalued” the pound. What does this statement mean? What kind of evidence would be required to test its validity and how should this evidence be interpreted? If the statement is true, what effects would overvaluation of the pound be expected to have on Great Britain? What factors would operate to remove these effects and to correct the overvaluation? What kinds of governmental policy, if any, would speed up the process of correcting the overvaluation?

Part II

  1. (20 points) What is the 100% reserve proposal? Discuss its advantages and disadvantages as compared with the present system.
  2. (30 points) A newspaper story of January 21, 1946, on President Truman’s budget message, had the following headlines and first two paragraphs:

“TRUMAN MAPS FIRST DEBT CUT SINCE 1930
CASH ON HAND TO OFFSET ’47 DEFICIT

“Washington—President Truman’s first budget proposes to spend $4,300,000,000 more than the government will collect, but for the first time since 1930, it won’t increase the national debt.
“Mr. Truman proposes to withdraw from the Treasury cash balance sufficient funds not only to offset this deficit but also to reduce the debt by $7,000,000.”

In answering this question assume that Government cash balances are held on deposit in member banks, and that no reserves are required for government balances.

(a) What is the monetary effect of financing the deficit by use of cash balances? Would this effect be deflationary or inflationary compared with such alternatives as raising additional revenue from taxes, or borrowing additional sums from (1) the nonbanking public, (2) member banks, (3) reserve banks.

(b) What is the monetary effect of using cash balances to reduce the debt? Discuss the effects if the bonds are purchased from 81) the nonbanking public, (2) member banks, (3) reserve banks.

_________________

FINAL EXAMINATION, ECONOMICS 230, FALL, 1947

Part I

  1. In speaking of monetary developments in the United States at the beginning of the nineteenth century, H. L. Reed remarks, “the country was so inadequately provided with specie that the advantages of a money economy were not sufficiently extended and diffused.” What do you think this statement means? Does it make sense as it stands? If not, can you suggest an interpretation of it that makes sense?
  2. Explain in detail how, in a fractional reserve system, a given deficit in reserves may force a much larger contraction in currency. In your statement, indicate the factors that set a limit to the contraction and contrast the single bank with the banking system.
  3. To what causes does Gregory attribute the breakdown of the Gold Standard in Great Britain in 1931?

 

Part II

  1.    a. Assume that there is a free market in which English pounds exchange for American dollars. Indicate whether each of the following would, by itself, tend to raise or lower the price of a pound in terms of dollars.

1) An increase in tourist travel by Americans in England. [A. Raise]
2) A rise in dividend payments on American common stocks owned by British. [A. Raise]
3) A sudden craze in Britain for American films leading to increased showings of American films. [A. Lower]
4) Increased repayment by Britain of loans from the U.S. [A. Lower]
5) The raising of abnormally large amounts of relief funds in the United States to finance the shipment of special food packages to Great Britain. [A. Raise]

b. If England and the United States were both on a gold standard what words would it be reasonable to substitute for “raise the price of a pound in terms of dollars”? [A. “ship gold to Britain”] for “lower the price of a pound in terms of dollars”? [A.“ship gold to U.S.”]

c. You are asked what the total amount of money in the United States is. Discuss the problems of definition that would arise, indicating the considerations that would be relevant in deciding what to count as money.

d. Marriner Eccles, chairman of the Federal Reserve Board, recently proposed to Congress that member banks be required to set up a special reserve of 25 per cent of deposit liabilities in addition to existing reserves. Three members of the Federal Advisory Council—a council composed of private bankers who advise the Federal Reserve Board—testified against the proposal. The N. Y. Times reports them as maintaining that “it would reduce loans needed to finance production, and thus prove inflationary.” Discuss this statement.

_________________

Economics 230
Final Examination
December 16, 1949

  1. (100 points) Indicate whether each of the following statements is true (T), false (F), or uncertain (U) and state briefly the reason for your answer.
    1. Legal reserves held by a bank are a liability of the bank.
    2. Banks that are members of the Federal Reserve System may not count cash in their vault as part of their legal reserves.
    3. Every bank that is a member of the Federal Reserve System must carry Federal Deposit Insurance.
    4. Every bank that carries Federal Deposit Insurance must be a member of the Federal Reserve System.

5 and 6. Bank A sells a government bond to Bank B, both banks being members of the Federal Reserve Stem. This…

    1. …increases total member bank reserves.
    2. …does not change total deposit liabilities of member banks.

7, 8, 9. Bank A, which is a member of the Federal Reserve System sells a government bond to Mr. Jones. Bank A deposits the proceeds in its account with a Federal Reserve Bank. This…

    1. …increases total member bank reserves.
    2. …does not change total deposit liabilities of member banks.
    3. …increases the ratio of reserves to deposit liabilities.
      *  *  *  *  *
    4. Since banks can expand loans by several times the amount of excess reserves, a bank that could make additional sound loans at 5 per cent, could afford to pay much more than 5 per cent to induce individuals to deposit currency in the bank, since such a deposit would increase the bank’s excess reserves.
    5. The economic function of legal reserve requirements is to protect depositors in a bank against undue extensions of loans by banks.
    6. An expansion of investments and an expansion of loans by commercial banks have identical effects on the quantity of money.

13 through 16. Mr. Jones pays his Federal income tax with a check on a member bank. The Federal government uses this check to buy a government bond from a Federal Reserve Bank. This operation…

    1. …reduces total member bank deposit liabilities.
    2. …reduces total member bank reserves.
    3. …increases the ratio of member bank reserves to member bank deposit liabilities.
    4. …increases the excess gold reserves of the Federal Reserve System.
      *  *  *  *  *
    5. The post-war rise in prices in the United States was one of the factors making necessary the recent devaluation of the British pound.
    6. Any phenomena that would lead to an outflow of gold from the United States under a gold standard would lead to a fall in the price of the dollar in terms of foreign currencies under a system of inconvertible currencies and flexible exchange rates.

19, 20, 21. Suppose that under an international gold standard, foreign payments and receipts by the United States balance so that there is no net outflow or inflow of gold.

    1. A sudden increase of gifts by residents of the United States to non-residents would tend to lead to an outflow of gold from the United States.
    2. A reduction in the tariffs imposed by France on goods imported into France would tend to lead to an outflow of gold from the United States.
    3. A large technological advance in Great Britain lowering the price of automobiles produced in Great Britain would lead to an outflow of gold from the United States.
      *  *  *  *  *
    4. Under a gold standard, a decline in the rate of interest will tend to narrow the spread between the gold points.
    5. Under existing laws governing bank reserve requirements, a tendency for people to move from farms and small communities to large cities is, by itself, a factor tending to reduce the total quantity of money.
    6. A lengthening in the average pay-period (through, say, an increase in the proportion of workers paid monthly instead of weekly) is, by itself a factor tending to reduce the price level.
    7. K, in the cash balance equation, will be increased by anything that leads people to expect price to fall.
    8. The numerical value of V in the transactions type of equation of exchange depends on the definition of M.
    9. The equation of exchange demonstrates that an increase in the quantity of money must lead to an increase in prices.
    10. Since one man’s receipts are another man’s expenditures, it follows that the quantity of money can be changed only by capital transactions.
    11. The rediscount rate is used by the Federal Reserve system to discourage purchase of government securities.
    12. Monetary policy can be more effective in preventing inflation than in preventing deflation.

 

  1. (50 points) “In the early history of our country there was a dearth of currency and specie. It was difficult to have cash on hand, especially when most of the specie was used to pay for imports.” (E. R. Taus, Central Banking Functions of the United States Treasury, 1789-1941, p. 22).

Discuss the economic meaning of these sentences. Do they make sense as they stand? If so, explain. If not, can you suggest any interpretation of them that does make sense? In your answer, emphasize analysis, not economic history.

  1. (50 points)

“One method proposed for bringing the reserve position under control while protecting the market for government securities held by banks is to require banks to keep a reserve of government securities against deposits, in addition to present cash reserves…..In all essential respects, raising required reserve ratios by adding a security-reserve requirement is identical with a straight increase of cash reserve requirements, combined with an equivalent purchase of government securities by the Reserve Banks. The only significant difference is that the security-reserve proposal provides the member banks with the equivalent of a subsidy (in the form of interest on the bonds) to compensate for the loss of earnings on additional assets tied up as reserves.”
Do you agree? Justify your answer.

  1. (50 points) Under our present monetary system, a desire on the part of the pubic to hold an increased fraction of its money in the form of currency and a decreased fraction in the form of deposits is said to be a factor making for a decrease in the total amount of money (currency plus deposits) in existence. Explain this statement in detail. In your explanation, distinguish between the effect of an outflow of cash on the individual bank and on the system.
  1. (50 points) Currency in public circulation (“cash in pocket”) was approximately one-sixth of the total amount of money (currency plus demand deposits plus time deposits) in the United States in 1892, it fell fairly steadily to about one-twelfth in 1930, and then rose more or less steadily until it is again approximately one-sixth, or about the same level as in 1892. The initial decline was interrupted by a rise during the first World War; and the subsequent rise was accelerated during the second World War.
    How would you explain the long decline to 1930? The subsequent rise? This tendency for the ratio to rise during war time? (Note that there is no unambiguously “right” answer to this question. So far as I know, those movements have not been exhaustively studied, and hypotheses to explain them have not been tested. You are being asked to construct hypotheses about them).

 

Source:  Hoover Institution Archives. Papers of Milton Friedman, Box 76, Folder 8 “University of Chicago, Econ. 230”.

Image Source:  Cropped from a photograph of Milton Friedman, George Stigler, and Aaron Director at the founding meeting of the Mont Pelerin Society, 1947, Milton Friedman papers, Hoover Institution Archives,

 

 

Categories
Agricultural Economics Exam Questions Harvard Suggested Reading Syllabus

Harvard. Marketing of agricultural commodities. John D. Black, 1947-48.

 

 

John D. Black took over the agricultural economics courses at Harvard that were previously the responsibility of Thomas Nixon Carver. The course of this post was co-taught by Professor Black and Dr. Charles D. Hyson and was simultaneously taught to both Harvard undergraduates and graduate students. Following the course syllabus for 1947-48 are the midyear exams for both the undergraduate and graduate courses and the final year-end exam for the undergraduates. I have been unable to find the graduate examination questions for the year-end final (they were not included in the collection of examinations archived at Harvard).

_________________________________

Course Enrollment

[Economics] 7a. Professor Black and Dr. Hyson.—Consumption, Distribution and Prices (F)

Total 86: 43 Seniors, 30 Juniors, 11 Sophomores, 1 Freshman, 1 Radcliffe.

 

[Economics] 7b. Professor Black and Dr. Hyson.—Consumption, Distribution and Prices (Sp).

Total 44: 25 Seniors, 15 Juniors, 4 Sophomores.

 

[Economics] 107a. Professor Black and Dr. Hyson.—Consumption, Distribution and Prices (F)

Total 13: 5 Graduates, 5 Public Administration, 3 Radcliffe.

 

[Economics] 107b. Professor Black and Dr. Hyson.—Consumption, Distribution and Prices (Sp).

Total 8: 1 Graduate, 4 Public Administration, 3 Radcliffe.

 

Source.  Harvard University. Report of the President of Harvard College 1947-1948, pp. 89.

_________________________________

SYLLABUS FOR ECONOMICS 7 AND 107
1947-1948

The required readings for Economics 7 and Economics 107 will be chosen from the references given below. The symbols used for frequently cited references are as follows:

**S.D.—Stewart and Dwehurst, DOES DISTRIBUTION COST TOO MUCH?, Twentieth Century Fund, 1942.

**Shep.—Shepherd, G.S., AGRICULTURAL PRICE ANALYSIS, Iowa State College Press, 1947 (revised edition).

**Waite—Waite and Cassady, THE CONSUMER AND THE ECONOMIC ORDER, McGraw-Hill Co., 1939.

*Cassels—Cassels, J.M., A STUDY OF FLUID MILK PRICES, Harvard University Press, 1937.

**T.N.E.C.—PRICE BEHAVIOR AND BUSINESS POLICY, Temporary National Economic Committee, Monograph No. 1, Government Printing Office, Washington, D.C., 1941.

**Nourse—Nourse, E.G., PRICE MAKING IN A DEMOCRACY, Brookings Institution, 1944.

**Dew.—Dewhurst and Associates, AMERICA’S NEEDS AND RESOURCES, Twentieth Century Fund, New York, 1947.

**Stig.—Stigler, G.J., THE THEORY OF PRICE, Macmillan Company, 1946.

**M.B.—Maynard and Beckman, PRINCIPLES OF MARKETING, Ronald Press, 1947.

*Nicholls—Nicholls, W.H., IMPERFECT COMPETITION WITHIN AGRICULTURAL INDUSTRIES, Iowa State College Press, (reprinted 1947).

**Com.—Department of Commerce, MARKET ANALYSES FOR BUSINESS, May, 1947.

 

PART I—INTRODUCTION

Ch. 1. Definition of the Field

M.B., Ch. 1.
Black, J.D. and Galbraith, J.K., “The Quantitative Position of Marketing in the United States”, Quarterly Journal of Economics, May, 1935.
S.D., pp. 3-14; 115-123.

Ch. 2. The Importance of the Field

Cassels, J.M., “The Significance of Early Economic Thought on Marketing,” Journal of Marketing, October 1936, Vol. 1, No. 2, pp. 129-133.
S.D., pp. 15-22; 123-126.

Ch. 3. The Evolution of Markets and Marketing

Marshall, A., PRINCIPLES OF ECONOMICS, 8th ed., Bk. V, Ch. 1.
M.B., Ch. 2.

PART II—CONSUMPTION ASPECTS

Ch. 4. The Field of Consumption Economics Considered in Relation to Marketing.

M.B., Chs. 3, 4, and 5.

Ch. 5. The Nature and Classification of Human Wants and Goods or Utilities

Dew., Chs. 5, 6, 7.
Waite, Chs. 1 and 14.
Scope and Method Bulletin No. 11, Research in Farm Family Living. Social Science Research Council, (1933), pp. 3-8; 45-58.

Ch. 6. The Dimensions of Utility and Its Measurement

Stig., Ch. 5.
Dew., Ch. 4.
The Review of Economic Statistics, November 1946, Five Views of the Consumption Function”.
Inadequate Diets and Nutritional Deficiencies in the U.S. Their Prevalence and Significance. Bulletin of National Research Council, November 1943.
Scope and Method Bulletin, cited above, pp. 13-18; 31-42.

Ch. 7. Levels of Consumption

Scope and Method Bulletin, cited above, pp. 8-18.
Dew.—Ch’s. 8, 9, and 10.
Waite—Ch’s. 3, 12, and 13.

Ch. 8. Consumer Income and Income Elasticity

Dew.—Ch’s. 11 and 12.
Woytinsky, W.S., “Relationship Between Consumers’ Expenditures, Savings, and Disposable Income”, Review of Economic Statistics, February, 1946.

Ch. 9. The Consumer Purchases and Related Studies

Waite—Ch’s. 9, 13, 16, and 17.

Ch. 10-11. Administration of Income

Dew.—Ch’s 13 and 14.
Waite—Ch’s 20 and 21.

Ch. 12. The Cost of Living and its Measurement

Bureau of Labor Statistics, The Cost of Living Index of the BLS, and appraisal of “The Cost of Living” by George Meany and R. J. Thomas, labor members of the President’s Committee on the Cost of Living, February 28, 1944.
Bureau of Labor Statistics, Report of the President’s Committee on the Cost of Living, Monthly Labor Review, January, 1945.
Mills, Bakke, Cox, Reid, Schultz, and Stratton (Special Committee of the American Statistical Association), “An Appraisal of the BLS Cost of Living Index”, Journal of the American Statistical Association, December, 1943.
National Industrial Conference Board. A Critical Analysis of the Meany-Thomas Report on the Cost of Living, April 1944.
Waite—Ch. 5.

Ch. 13. Consumer Sovereignty

Dew.—Ch. 15.

PART III—MARKETING ORGANIZATION

Ch. 14. Production Economics Aspects of Marketing

M.B.—Ch’s 6 to 8.

Ch. 15. Approaches to Marketing Organization Analysis

[note: no reading item listed here]

Ch. 16. The Definition of a Market

Fetter, “The Economic Law of Market Areas”, Quarterly Journal of Economics, May, 1924.
Price, Marketing of Farm Products, Ch. 16.
Shepherd, MARKETING OF FARM PRODUCTS, Appendix A.

Ch. 17. Marketing Agencies

M.B.—Ch’s. 9 to 11.

Ch. 18. Classification by Commodities

M.B.—Ch’s. 13 to 15.

Ch. 19. The Census of Distribution

M.B.—Ch’s. 16 to 18.

Ch. 20. The Location of Markets

Dean, W.H., THE THEORY OF THE GEOGRAPHIC LOCATION OF ECONOMIC ACTIVITIES, Edward Brothers, Ann Arbor, Michigan, 1938.
S.D.—Ch. 4.

Ch. 21. Inter-Unit Marketing Organization

M.B.—Ch. 19 and 20.

Ch. 22-23. Intra-Unit Marketing Organization

M.B.—Ch. 36.
S.D.—Ch. 2, pp. 33, 36, 37.
Com.—pp. 86-91.

 

PART IV—MARKET PRICE

Ch. 24. The Function of Market Prices

M.B.—Ch. 32.
Stig.—Ch. 2.
S.D.—Ch. 2.
Waite—Ch’s. 14, 15.

Ch. 25. The Behavior of Prices

Shep.—Ch’s. 1, 2, and 3.
Cassels, J.M.—Ch’s 1, 5, and 9.
Com.—pp. 43-50.
Nicholls—Ch. 18.

Ch. 26. Demand

Stig.—Ch. 6.
Shep.—Ch’s. 4, 5, and 6.
Cassels—Ch’s 1, 6, and 9.
Working, E.J.—“What Do Statistical Demand Curves Show?” Quarterly Journal of Economics, February, 1927.
Waite—Ch. 10.

Ch. 27. Supply

Stig.—Ch’s 7 to 10, inclusive
Shep.—Ch’s. 10 and 11
Black, J.D., “The Elasticity of Supply of Farm Products”, Journal of Farm Economics, 1924.
Cassels—Ch’s 1 and 2.
Cassels, J.M., “The Nature of Statistical Supply Curves”, Journal of Farm Economics, April, 1933.
Mighell, R.L. and Allen, R.H., “Supply Schedules—Long Time and Short Time”, Journal of Farm Economics, August, 1940.
Reynolds, L.G., “The Canadian Baking Industry: A Study of an Imperfect Marekt,”Quarterly Journal of Economics, August, 1938.
Reynolds, L.G., “Competition in the Rubber Tire Industry,” American Economic Review, September 1938.
Waite—Ch. 6.

Ch. 28. Selling Prices under Imperfect Competition

Cassels—Ch’s. 9 and 10.
Nicholls—Ch’s 5 to 11, inclusive
Stig.—Ch’s 11 to 14, inclusive
TNEC—Part I, Ch’s 2 and 3.
Hyson, G.D. and Sanderson, F.H., “Monopolistic Discrimination in the Cranberry Industry”, Quarterly Journal of Economics, May, 1945.
Waugh, F.V. et al, “The Controlled Distribution of a Crop Among Independent Markets”, Quarterly Journal of Economics, November, 1936.
Waite—Ch. 6.

Ch. 29. Buying Prices under Imperfect Competition

Nicholls, Ch’s—16 and 17.
TNEC—Part III, Ch’s 1 and 2.

Ch. 30. Futures markets and Speculation

M.B.—Ch’s. 28 and 29.
Howell, L.D., Cotton Prices in Spot and Futures Markets, USDA Technical Bulletin No. 6851, 1939.
Shepherd, THE MARKETING OF FARM PRODUCTS, Ch’s 9 and 10.

Ch. 31. Price Forecasting

Shep.—Ch’s 7, 8, 9, and 13.

 

PART V—SELLING AND BUYING

Ch. 32. The Selling Function

TNEC—Part I, Ch. 4[?].
S.D.—p. 225.

Ch. 33. Advertising

M.B.—Ch. 23.
S.D.—pp. 225-229.
Borden, Neil, “Findings of the Harvard Study on the Economic Effects of Advertising”, Journal of Marketing, April, 1942.
Waite—Ch. 11.

Ch. 34. The Buying Function

M.B.—Ch. 22.
TNEC—Part I, Appendix 2.
Nicholls, Ch’s. 12-15, inclusive.

Ch. 35-36. Price Policy

S.D.—Ch. 2.
Cassels—Ch. 6.
Nourse—Ch’s 6, 10, and 11.
TNEC.—Part I, Preface and C-h. 1.

 

PART VI—MARKETING MARGINS, COSTS, INCOME, AND EFFICIENCY

Ch. 37. Margins and Costs

S.D.—Ch’s. 2, 6, and 7.
TNEC.—Part III, Ch’s. 2 and 3.

Ch. 38. The Incidence of Marketing Costs

S.D.—Ch’s. 10 and 11, pp. 333-349[?].
Nourse—Ch’s. 8 and 9.
TNEC., Part II, Ch. 1.

Ch. 39. Incomes in Commodity Distribution

S.D.—Ch. 5.

Ch. 40. Marketing Efficiency

M.B.—Ch’s. 37 and 38.

 

PART VII—AUXILIARY FUNCTIONS

Ch. 41. Transportation

M.G.—Ch. 24.
S.D.—Ch. 8, pp. 210-222.

Ch. 42. Warehousing and Storage

M.B.—Ch. 25.
S.D.—p. 225.

Ch. 43. The Financing of Marketing

M.B.—Ch. 27.
S.D.—pp. 229-244.

Ch. 44. The Insurance of Commodity Distribution

[note: no reading item listed here]

 

PART VIII—COOPERATION IN COMMODITY DISTRIBUTION

Ch. 45. Principles and Philosophy of Cooperation as Exhibited in Commodity Distribution

Black, J.D., Cooperative Central Marketing Organization, University of Minnesota Exp. Sta. Bulletin No. 211, April, 1924.
Childs, Marquis, SWEDEN: THE MIDDLE WAY, 1938, (conclusions only).

Ch. 46. Cooperative Selling

M.B.—Ch. 21.
S.D.—pp. 85-94.

Ch. 47. Cooperative Buying and Consumer Organization

M.B.—Ch. 12.
Sorenson, THE CONSUMER MOVEMENT, Ch’s 1, 4-9, inclusive.
Waite—Ch. 18.

 

PART IX—PUBLIC ACTIVITY IN COMMODITY DISTRIBUTION

Ch. 48. The Functions of Government in Commodity Distribution and Prices

M.B.—Ch’s. 37 to 39.
S.D.—Ch. 11, pp. 349-367.
Nourse—Ch’s. 1 to 5 inclusive.

Ch. 49. The Marketing Services

M.B.—Ch’s. 26 and 30.
Waite—Ch’s 6 and 7.

Ch. 50. Government Controls

Nourse—Ch’s 12 to 14, inclusive.
S.D.—Ch. 11; pp. 333-348.

Ch. 51. Price Control

Shep.—Ch’s 14 and 155.
TNEC.—Part III, Ch. 1.

Ch. 52. Marketing Operations

Shepherd, G.S., MARKETING OF FARM PRODUCTS, Ch. 14.

Ch. 53. Intergovernmental Commodity Agreements

Mason, Edward, CONTROLLING WORLD TRADE, McGraw-Hill, 1946, Part II.
Davis, J.S., INTERNATIONAL COMMODITY AGREEMENTS: HOPE, ILLUSION, OR MENACE?, The Committee on International Economic Policy, New York, 1947.
REPORT OF THE DRAFTING COMMITTEE OF THE PREPARATORY COMMITTEE OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT, United Nations Economic and Social Council. Lake Success, New York, January 20 to February 25, 1947, Ch’s 5 to 7, inclusive.

 

PART X—CONCLUSION

Ch. 54. Outlook and Policy

Com.—pp. 1-42; 51-85.
Dew.—Ch’s 6 and 26.
S.D.—Ch. 11.
Hyson, C.D., “Savings in Relation to Potential Markets”, American Economic Review, December, 1946.
Hyson, C.D., “Maladjustments in the Wool Industry and Need for New Policy,” Journal of Farm Economics, May, 1947.
Waugh, F.V., “Does the Consumer Benefit From Price Stability?”, Quarterly Journal of Economics, August, 1944.

 

Source:  Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003.   Box 4, Folder “Economics, 1947-1948 (1 of 2)”.

_________________________________

1947-48
HARVARD UNIVERSITY
MIDYEAR EXAMINATION
January 1948
ECONOMICS 7a

Commodity Consumption, Distribution and Prices

Answer No. 1, and 5 of the remaining 6.

  1.      a.  Cite all the conditions that may make competition “imperfect”.
    1. Point out the differences between Maynard and Beckman’s and Stigler’s sets of conditions.
    2. Why do Maynard and Beckman object to the term “imperfect” competition?
    3. Is their objection valid? Give reasons for your answer.
  2.      a.  Explain the statement that “utility has a time dimension,” and show the relevance of this time dimension to determination of the relative productivity of four or five different types of marketing operations or activities.
    1. Comment on the statement: Introducing the time dimension into measurement of utility does not introduce ethical considerations.
  3.      a. Explain and illustrate by a diagram unit elasticity of demand, elastic demand, and inelastic demand.
    1. Explain income elasticity.
    2. Show how demand elasticity and income elasticity are related to each other.
  4.     Outline the four approaches to analysis of marketing organization and indicate the advantages of each.
  5.      a. Make a classification of markets on two or more bases.
    1. Outline briefly the principles that are involved in the location of major types of markets.
  6.      Contrast the marketing systems for farm products and for manufactured products, defining the functions performed by the marketing agencies engaged in each.
  7.     Explain briefly 4 of the following 5:
    1. Standard of living.
    2. Consumer sovereignty.
    3. Inter-unit marketing organization.
    4. Regular wholesaler.
    5. Supplementary relationship.

MIDYEAR EXAMINATION
January 1948
ECONOMICS 107a

Commodity Consumption, Distribution and Prices

Answer No. 1; 4 questions out of the remaining 6 listed above; and 2 out of the following 3.

  1. Explain the aggregate consumption function and the individual consumption function, and show their significance in marketing analysis.
  2. Comment on the several attempts to determine the relative growth of marketing and other forms of economic activity in the United States.
  3. Explain briefly 3 of the following 4:
    1. Indifference curves (as explained, for example, in Stigler’s Chapter 5.)
    2. LePlay’s approach to consumption analysis.
    3. Principal features of the Consumer Purchases Study.
    4. Either Wicksteed’s or Patton’s main lines of thought on consumption economics.

 

Source:  Harvard University Archives. Harvard University. Final Examinations, 1853-2001.Box 15. Faculty of Arts and Sciences, Papers Printed for Final Examinations, History, History of Religions, …,Economics, …, Military Science, Naval Science. January, 1948.

_________________________________

1947-48
HARVARD UNIVERSITY
FINAL EXAMINATION
May 1948
ECONOMICS 7b

Commodity Consumption, Distribution and Prices

(Answer No. 1, and any 5 of the remaining 6)

  1. Outline the basic doctrines of a sound price policy as presented by Nourse. Appraise his doctrines and discuss them critically with particular reference to the price policy and business behavior of the individual firm. (45 minutes)
  2. Explain how the relative elasticities of the demand for Class I and for Class II milk are related to the practice of discriminative marketing. Illustrate with diagram. (27 minutes)
  3. What is the effect of speculation in futures contracts upon commodity prices? Does speculation stabilize prices? Appraise. (27 minutes)
  4. Prices of what types of commodities are flexible, inflexible? Why these differences? (27 minutes)
  5. Outline a group of measures and procedures that will promote efficiency in commodity distribution. (27 minutes)
  6. Discuss cost analysis as a tool of marketing analysis. (27 minutes)
  7. In what ways can cooperation contribute most effectively to efficiency in commodity distribution? (27 minutes)

[Note: examination questions for Economics 107b not included in collection]

Source:  Harvard University Archives. Harvard University. Final Examinations, 1853-2001.Box 15. Faculty of Arts and Sciences, Papers Printed for Final Examinations, History, History of Religions, …,Economics, …, Military Science, Naval Science. May, 1948.

Image Source:  Professor John D. Black in Harvard Class Album 1945.

Categories
Johns Hopkins Suggested Reading

Johns Hopkins. Reading List for Macroeconomic Theory course. Carl Christ, 1963

Carl Christ

 

The life and career of Carl Christ has been honored at Economics in the Rear-view Mirror in an earlier post. His syllabus for an econometrics course he taught in 1957 at the University of Chicago has been posted as well. Today we have a new-economics themed macroeconomics course, perhaps inspired by the first year of the legendary Council of Economic Advisers under President John F. Kennedy.

_____________________

Political Economy 302:
Economic Theory (Macroeconomics)

Spring 1963
Johns Hopkins University

Dr. Christ

Reading List

  1. Texts

Bailey, Martin J., National Income and the Price Level, Appendix on Income and Chs. 1, 2, 6,8, 3.

U.S. President, Economic Report, January 1963, as assigned after publication.

  1. Other Readings

Ackley, Gardner, Macroeconomic Theory, pp. 3-120, Ch. XV, pp. 505-42 and pp. 549-53 (see next item)

Ruggles, Richard and Nancy, National Income Accounts and Income Analysis, 2d ed., pp. 1-143 (an alternative to Ackley, pp. 3-101).

Keynes, J. M., The General Theory of Employment, Interest and Money.

Chs. 1,3; Ch. 6, Sec II; Ch. 7, Sec V; Chs. 8-11; Ch. 12, Secs I-II and p. 164; Chs 13-15; Ch 17, Secs I-IV; Chs 18, 2; Ch 20, Sec [II? or III?].

Samuelson, P.A., “The Simple Mathematics of Income Determination,” in L. Metzler et al, Income Employment and Public Policy

Samuelson, P.A., “Interactions Between the Multiplier Analysis and the Principle of Acceleration,” Rev. Econ. Stat., Vol. 21, No. 2 (May, 1939), pp. 75-78; also in Readings in Monetary Theory.

Patinkin, Don, “Price Flexibility and Full Employment,” in Readings in Monetary Theory.

Mitchell, W. C., “Business Cycles”, in Readings in Business Cycle Theory.

Abramovitz, Moses, “Resource and Output Trends in the U.S. since 1870; Am. Econ. Rev. Vol 36, No. 2 (May, 1956), pp. 5-23; reprinted as N.B.E.R. Occasional Paper No. 52.

Harris, S. E., P. A. Samuelson, G. Haberler, A. H. Hansen, H. C. Wallich, C. L. Schultze, O. Eckstein, and W. L. Smith, “Economic Policy for 1962: A Symposium”, Rev. Econ. Stat.Vol. 44, No. 1 (Feb., 1962), pp. 1-24.

Friedman, Milton, “A Monetary and Fiscal Framework for Economic Stability,” Amer. Econ. Rev. Vol. 38, No. 1 (June, 1948), also in Readings in Monetary Theory, also in Friedman’s Essays in Positive Economics.

 

Source:  Johns Hopkins University. Milton S. Eisenhower Library, Ferdinand Hamburger, Jr. Archives. Department of Political Economy. Series 6, Box 1, Folder 3 “Department of Political Economy, Course Outlines and Reading Lists. C. 1900, c. 1950, 1963-68.”

Image Source: Clipped from the Johns Hopkins University yearbook, Hullabaloo 1964, p. 42.

Categories
Courses Curator's Favorites Exam Questions Lecture Notes M.I.T. Problem Sets Suggested Reading Syllabus Uncategorized Undergraduate

M.I.T. Principles of Macroeconomics. Slides, problems sets, exams. Krugman, 1998

 

One might think that putting together robust links to economics course materials found in the internet archive, Wayback Machine, would be relatively straightforward, and sometimes it is. But most of us are inconsistent with the use of folders and sometimes pages get updated by other people so that traditional archival persistence is generally required to find missing pieces to the historical puzzle. In any event, today’s post manages to pack links to course content for a principles of macroeconomics course taught at M.I.T. exactly two decades ago by Paul Krugman.

I remember that semester well, because immediately after Paul Krugman finished his teaching obligations at M.I.T. for that fall term, he came to Berlin to receive an honorary doctorate from Freie Universität Berlin. The audio recording to his lecture “The return of demand-side economics” can still be heard (beginning around minute 2:00) at a webpage maintained by the John-F.-Kennedy Institute for North American Studies of Freie Universität.

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14.02 Principles of Macroeconomics
Fall 1998
Professor Paul Krugman

Course Syllabus

Text: Olivier Blanchard, Macroeconomics.

Schedule (with links to lecture slides and exams)

Note: the lecture slides may differ slightly from those presented in class.

September 14 — Chapter 2: Preliminary Concepts

Slides: Tracking the Macroeconomy: Five Key Aggregates

September 16 — Chapter 3 & 4: The Goods Market (lecture by Roberto Rigobón)

September 21 — Chapter 5: Financial Markets

Slides: Review. Multiplier Analysis

Handout by Adam B. Ashcroft on bond yields about here

September 23 — Chapter 5: More on Financial Markets

Slides: The Federal Reserve and the Money Supply

September 28 — Chapter 6: IS-LM

Slides: The IS-LM Model

September 30 — Chapter 7: Expectations

Slides: Expectations and Macroeconomics

October 5 — Chapter 8: Expectations, Consumption, and Investment

Slides: Consumer Behavior–Not that simple

October 7 — Banks and the Banking System

Slides: Banking and the Financial System

October 8
Exam 1

Exam #1 Questions
Solutions

October 13 — Chapter 9: Expectations and Financial Markets

Slides: (missing)

October 14 — Chapter 10: Expectations and Policy

Slides: Expectations and Macroeconomic Policy 

October 19 — Chapter 11: Introduction to the Open Economy

Slides: The Open Economy

October 21 — Chapter 12: The Open Economy Goods Market

Slides: Macroeconomics in the Open Economy

October 26 — Chapter 13: Interest Rates and Exchange Rates

Slides: What Determines Exchange Rates

Handout on exchange rates about here.

October 28 — Chapter 13: Exchange Rate Regimes

Slides: Fixed Exchange Rates

November 2 — Chapter 14: Expectations, Crises, and General Mayheim

Slides: (missing)

November 4 — Chapter 15: The Labor Market

Slides: Why Study the Labor Market?

November 5
Exam 2

Exam #2 review
Exam #2 questions
Solutions

November 9 — Chapter 16: General Equilibrium

Slides: Putting It All Together–AS-AD

November 16 — Chapter 17: The Phillips Curve

Slides: From Aggregate Supply to the Phillips Curve

November 18 — Chapter 18: Disinflation

Slides: Long-run Unemployment-Inflation Dynamics [note: “?” for the greek letter pi, i.e. rate of inflation]

November 23 — Chapter 19 & 21: Seigniorage and Devaluation

Slides: Inflation, Interest Rates, and Hyperinflation

November 25 — Chapter 22 & 23: Long-run Growth

Slides: Economic Growth

November 30 — Chapter 24: Technical Progress

Slides: Savings, Investment, and Growth

Handout on growth about here.

December 2 — Chapter 20: Great Depression and European Unemployment

Slides: High Unemployment and Growth Slowdowns 

December 7 — Zuckerman & Krugman Foreign Affairs articles (lecture by Roberto Rigobón)

[Paul Krugman, Debate: America the Boastful, and Mortimer B. Zuckerman, Debate: A Second American Century,  Foreign Affairs (May/June 1998)]

December 9 — Course Review

Slide: Overview Graphic [Note: graphic cut-off on right hand side]

Final Examination (December, 2018)

Final Exam Review
Pablo Garcia’s Review
Final Exam Questions 

 

Problem Sets

Set Number Assigned Due Returned
1 9-11 9-18 9-21
2 9-18 9-25 9-28
3 9-25 10-2 10-5
4 10-9 10-16 10-19
5 10-16 10-23 10-26
6 10-23 10-30 11-2
7 11-6 11-13 11-16
8 11-13 11-20 11-23
9 11-20 12-4 12-7

 

Problem Set 1
Solutions

Problem Set 2
Solutions

Problem Set 3
Solutions (missing)

Optional Problem Set 1
Solutions

Problem Set 4
Solutions

Problem Set 5
Solutions

Problem Set 6
Solutions

Problem Set 7
Solutions

Optional Set 2
Solutions

Problem Set 8
Solutions

Problem Set 9
Solutions

Optional Set 3
Solutions

 

Image: Photograph taken in December 1998 at Cecilienhof, Potsdam (Germany). Irwin Collier and Paul Krugman.

Categories
M.I.T. Suggested Reading Syllabus

M.I.T. Undergraduate intermediate macroeconomics. Blanchard, 1984

 

Since relatively few people can be expected to stumble upon an M.I.T. course syllabus of Olivier Blanchard in Evsey Domar’s papers, I figure it is part of the value-added of Economics in the Rear-view Mirror to provide a transcription of such hidden treasure. Earlier Blanchard’s graduate M.I.T. course syllabus for 1997 was posted.

__________________

Intermediate Macro Theory
14.06
O.J. Blanchard
Fall 1984

This course is a continuation and extension of 14.02. It is divided in two parts of approximately equal length The first builds on the aggregate demand and aggregate supply apparatus developed in 14.02. The second examines three topics of current interest.

There will be a midterm exam, covering the first part of the course, and counting for half of the course grade. Students will then have the option of taking a final exam or writing a course paper on one of the three topics covered in the second part of the course.

 

Background Readings

Dornbusch and Fischer, Macroeconomics, 3rded. (D.F.)

Economic Report of the President, February 1984.

R.J. Gordon, “Postwar Macroeconomics: The Evolution of Events and Ideas”, Chap. 2, in the American Economy in Transition, Feldstein, ed.

As the course starts, you may want to review Chapters 1 to 5 in D.F.

 

Part I. Aggregate demand and aggregate supply

  1. The ISLM in the closed economy

D.F. Chapters 6 to 9

F. Modigliani, “Monetary Policy and Consumption”, (in xerox packet at Graphic Arts). pp. 12-46.

L. Summers, “Taxation and Corporate Investment: A q-theory approach”, Brookings Papers (BPEA), 1981, 68-119.

J. Tobin, “Monetary Policies and the Economy: The Transmission Mechanism”, Southern Economic Journal, January 1978.

  1. The ISLM in the open economy

D.F. Chapters 18, 19-1.

Economic Report of the President, 1984, chapter 2.

R. Dornbusch and S. Fischer, “The Open Economy, Implications for Monetary and Fiscal Policies”, mimeo, MIT 1984.

R. Dornbusch, Open Economy Macroeconomics, chap. 3 (optional)

  1. Aggregate demand aggregate supply

D.F. Chapters 11, 12, 13, 14, 19-2.

R. Lucas, “Understanding Business Cycles”, in “Studies in the Business Cycle Theory”, 215-239.

J. Tobin, “How Dead is Keynes?”, Economic Inquiry, Oct. 1977.

J. Tobin, “The Wage-Price Mechanism”, in The Econometrics of Price Determination”, Eckstein ed., 1972, 5-15.

 

Part 2. Three topics

  1. Real wages and unemployment in Europe

E. Malinvaud, “The Theory of Unemployment Reconsidered”, Wiley 1977.

R. Dornbusch et al., “Macroeconomic Prospects and Policies for the European Community”, CEPS Paper 1, 1983.

J. Sachs, “Wages, Profits and Macroeconomic Adjustment: A Comparative Study”, BPEA 1979-2, 269-332.

J. Sachs, “Real Wages and Unemployment in the OECD Countries”, BPEA 1983-1, 255-289.

  1. The Volcker disinflation

W. Poole, “The Theory of Monetary Policy under Uncertainty”, in Readings, W.L Smith and R. L. Teigen, 1974, 360-369.

O. Eckstein, “Disinflation”, DRI Economic Studies 114, October 1983.

W. Buiter and M. Miller, “Changing the Rules: Economic Consequences of the Thatcher Regime; BPEA 1983, 305-365 (optional).

T. Sargent, “the Ends of Four Big Inflations”, on Reserve (optional).

B. Friedman, “Lessons from the 1979-82 Monetary Policy Experiment”, American Economic Review P&P, May 1984, 382-87.

M. Friedman, “Lessons from the 1979-82 Monetary Policy Experiment”, American Economic Review P&P, May 1984, 397-400 (Authors not related).

R. Gordon, “The Conduct of Domestic Monetary Policy”, on Reserve, pp. 1-33 only (optional)

  1. U. S. fiscal deficits and the world economy

D.F. Chapter 15

“Setting National Priorities: The 1984 Budget”, J. Pechman ed., Chapters 2, 8.

M. Feldstein, “Budget Deficits, Economic Activity and Net Capital Formation”, Testimony to Congress, 1983.

R. Dornbusch, “The Overvalued Dollar”, mimeo, MIT 1984.

O. Blanchard and R. Dornbusch, “U.S. Deficits, Europe and the Dollar”, mimeo MIT 1983 (optional).

O. Blanchard and L. Summers, “High Real Interest Rates”, on Reserve (optional).

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Evsey D. Domar Papers, Box 15, Folder “Macroeconomics. Lecture Notes, Exams, Paper: ‘Stability Without Planning? The American Experience’”.

Image Source:Olivier Blanchard’s MIT homepage, captured June 2, 2001 by   Wayback Machine.

Categories
Harvard Suggested Reading Syllabus

Harvard. Advanced Economic Theory, Second Term. Schumpeter, 1948

 

 

In 1947-48 the advanced economic theory sequence of two semester courses featured the pairing of Gottfried Haberler and Joseph Schumpeter in the Winter and Spring terms, respectively. In this post you will find course enrollment data along with the course outline and assigned readings for the Spring term taught by Schumpeter. Alas I could not find the final examination questions for this course in the otherwise fairly complete collection of course examinations in the Harvard Archives.

Materials from the Winter Term course 1947-48 taught by Gottfried Haberler.

__________________

Course Enrollment

[Economics] 103b. Professor Schumpeter.—Advanced Economic Theory (Sp).

Total 10:  8 Graduates, 1 Public Administration, 1 Radcliffe.

Source: Harvard University. Report of the President of Harvard College, 1947-48, p. 90.

__________________

Advanced Economic Theory
Joseph Schumpeter

Economics 103b
Spring Term 1947-48

Plan of Course and Suggestions for Reading

The plan of the course is to start from and to build upon Professor Haberler’s lectures in the Fall Term (103a). We shall start from the statics of equilibrium and then discuss at some lengths the use and limitations of the method of Comparative Statics. After this, we shall survey various Dynamic Models. These models will be made the starting points of excursions into relevant fields of pure and applied theory.

Professor Haberler’s reading list remains in force. Wicksell’s Lectures I being particularly recommended. In addition, perusal of the following items will prove helpful. The more important ones are marked by an asterisk. The list is intended to cover also suggestions for the reading period.

J. Tinbergen*, Suggestions on Quantitative Business Cycle Theory, Econometrica, July 1935.

F. Modigliani*, Liquidity Preference, Interest, and Money, Econometrica, January 1944.

N. Kaldor*, Stability and Full Employment, Economic Journal, December 1938

F. Lavington, Approach to a Theory of Business Risks, Economic Journal, June 1925

L. Metzler, Factors Governing the Length of Inventory Cycles, Review of Economic Statistics, February 1947

M. V. Jones, Secular and Cyclical Saving Propensities, Journal of Business of the University of Chicago, January 1944

L. M. Lachmann, Uncertainty and Liquidity Preference, Economica, August 1937

M. Kalecki, A Theorem on Technical Progress, Review of Economic Studies, June 1941

P. A. Samuelson*, Foundations of Economic Analysis, 1947

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 4. Folder “Economics, 1947-48 (2 of 2)”.

Image Source: Joseph Schumpeter in Harvard Class Album 1946.

 

 

Categories
Harvard Suggested Reading Syllabus

Harvard. Advanced Economic Theory. Outline and readings. Haberler, 1947

 

 

In 1947-48 the advanced economic theory sequence of two semester courses featured the pairing of Gottfried Haberler and Joseph Schumpeter in the Winter and Spring terms, respectively. In this post you will find course enrollment data along with the course outline and assigned readings for the Winter term taught by Haberler. Alas I could not find the final examination questions for this course in the otherwise fairly complete collection of course examinations in the Harvard Archives.

Materials from the Spring Term course 1947-48 taught by Joseph Schumpeter.

__________________

Course Enrollment

[Economics] 103a. Professor Haberler.—Advanced Economic Theory (F).

Total 20:  15 Graduates, 2 Seniors, 2 Public Administration, 1 Radcliffe.

Source:Harvard University. Report of the President of Harvard College, 1947-48, p. 90.

__________________

Advanced Economic Theory
Gottfried Haberler

Economics 103a
Fall Term, 1947

This course will be devoted to a discussion of some selected topics centering around the theory of capital and interest. An attempt will be made to conduct the course in a seminar-like fashion.

Content

  1. Introduction

Types of economics

Theoretical vs. non-theoretical approach.

Logical types of economic theory

Individualistic—collectivistic economics
Microscopic—Macroscopic (aggregative) theories
Psychological—behavioristic approach
Static—dynamic analysis
Equilibrium—disequilibrium
General—Partial equilibrium
Price theory—welfare theory
Pure—monetary economics

Some major schools

Classical and neo-classical economics
Marxian economics
Keynesian economics
Others

  1. Brief recapitulation of modern time-less theory

Theory of household
Theory of firm
Theory of distribution

  1. Theory of capital and interest

“Pure” vs. “Monetary” theories of capital and interest
Time preference
“Productivity” of capital
Liquidity preference theory of interest
Dynamic theory of interest
Profits and interest
Uncertainty and time

  1. Topics in the theory of capital and interest

Substitutability of “capital” and “labor”
Influence of changes in wage and interest rates or the substitution of capital for labor
The “Ricardo” effect
“Capital intensity” and the trade cycle
Theoretical problems of capital accumulation

*  *  *  *  *  *

Reading

  1. [Introduction] No definite assignments. Suggestions:

Joan Robinson: An Essay on Marxian Economics
P. M. Sweezy: “Orthodox and Marxian Economics,” Science and Society, Summer 1947.
L. R. Klein: The Keynesian Revolution
L. R. Klein: “Theory of Effective Demand and Employment,” Journal of Political Economy, April 1947.

  1. [Brief recapitulation of modern time-less theory]

Hicks: Theory of Wages, Part I.
Hicks: Value and Capital, Parts I and II.
Readings in the Theory of Income Distribution, Chs. 5, 7, 8, 12.
P. H. Douglas: The Theory of Wages, Chs. I, II, III.

  1. [Theory of capital and interest]

I. Fisher: Theory of Interest, mainly Part II and first two chapters of Part III.
F. H. Knight: Articles on Capitaland Interest in Ethics of Competitionor in Readings.
F. A. Hayek: “Mythology of Capital,” in Readings
Schumpeter: Theory of Economic Development, Chs. IV and V.
D. H. Robertson: “Mr. Keynes and the Rate of Interest,” in Readings
K. Wicksell: Lectures, Vol. I, Chs. on interest.
F. Lutz: “The Criterion of Maximum Profits in the Theory of Investment,” Quarterly Journal of Economics, November 1945.

  1. [Topics in the theory of capital and interest]

Hayek: Profit, Interest and Investment, first essay.
Hayek: “The Ricardo Effect,” Economica, May 1942.
Haberler: Prosperity and Depression, 1941, pp. 481-491.
N. Kaldor: “Capital Intensity and the Trade Cycle,” Economica, 1939.
N. Kaldor: “Professor Hayek and the Concertina-effect,” Economica, 1942.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 4. Folder “Economics, 1947-48 (2 of 2)”.

Image Source: Gottfried Haberler, Harvard Class Album 1946.

 

Categories
Bibliography Harvard Suggested Reading Syllabus

Harvard. Course outlines and reading lists. Business Cycles and Economic Forecasting, Haberler & Hansen, 1955-56

 

The pairing of Gottfried Haberler and Alvin Hansen at Harvard for business cycle teaching spanned decades.

For comparison, the reading list and final exam for the course 17 years earlier:   Haberler and Hansen, 1938.

________________

Economics 245a
Business Cycles

Professor Haberler — Fall Term, 1955

Part I. Basic Facts and Concepts.

Types of economic changes and fluctuations

Definition of business cycles

Constant and varying characteristics

Income, production, employment, unemployment
Prices, wages, interest rates, etc.

Cyclical phases

Amplitude, length

Short cycles, intermediate cycles, long waves

Cycles and crises

Cycle history

Approaches to the study of business fluctuations

Descriptive and historical
Statistical and econometric
Theoretical

Part II. Explanation of Business Cycles

Theory of business cycles and theory of employment

Economic fluctuations and long-term growth

Formal characteristics of cycle theories

Statics-dynamics
Exogenous-endogenous theories

Older Cycle Theories

“Monetary” theories vs. “real” theories
Savings — investment
Inventions, innovations; Schumpeter’s theory
Psychological factors: Pigou, Keynes
Agriculture and the business cycle

Modern Cycle Theories

Keynesian contribution
Multiplier — acceleration models
Harrod, Hansen, Samuelson, Kaldor, Kalecki, Metzler
Hicks’ “Contribution to the Theory of the Trade Cycle”
Inventory cycles
The role of wage and price rigidity in the cycle
Competition and monopoly and the business cycle
Many-cycle hypothesis
Is there still a business cycle?

Part III. Economic Growth

Part IV. Business Cycle Policy

Cycle Policy and Employment Policy

Can and should the Cycle be suppressed?

Have depressions a useful function?

Should business booms be prevented?

Preventive and curative depression policy?

Instruments of Policy

Monetary and credit policies
Fiscal policies
Price and wage policies
The role of business forecasting
Other measures

International aspects of business cycles and business cycle policy

Business cycles in planned economies

 

General Texts and Comprehensive Monographs

A. F. Burns, The Frontiers of Economic Knowledge (National Bureau of Economic Research, 1954)

Hansen, Business Cycles and National Income

Schumpeter, Business Cycles

Achinstein, Introduction to Business Cycles

Mitchell, Business Cycles

Bratt, Business Cycles and Forecasting

Pigou, Industrial Fluctuations (2ndedition, 1929)

Tinbergen and Polak, Dynamics of Business Cycles

Haberler, Prosperity and Depression

Gordon, Business Fluctuations

Readings in Business Cycle Theory (Blakiston)

Hansen-Clemence, Readings in Business Cycles and National Income

Readings in Monetary Theory (Blakiston)

N.B.E.R., Conference on Business Cycles

Speithoff, in International Economic Papers, III

Post Keynesian Economics. Kurihara, editor, Rutgers University Press, 1955.

 

Specific Readings

Part I.

Blakiston, Readings in Business Cycle Theory, Chs. 1, 2, 3.

Haberler, Prosperity and Depression, Ch. 9

Hansen, Business Cycles and National Income, Part I

Hansen-Clemence, Readings, Chs. 2, 3, 4 (for Part II: Chs. 11, 12, 16; for Part III: Chs. 28, 33, 36)

Mitchell, What Happens During Business Cycles? Chs. 2, 3, 4, 8, 10

N.B.E.R., Conference on Business Cycles, Gordon, Klein

Tinbergen-Polak, Dynamics of Business Cycles, Part I

H. L. Beales, “The Great Depression,” Economic History Review, October 1934

Slichter, “The Period 1919-1936….,” RES, 1937

Gordon, R. A., “Investment Behavior and Business Cycles,” RES, (to be published)

Ames, “A Theoretical and Statistical Dilemma—the Contributions of Burns, Mitchell, and Frickey to Business Cycle Theory, Econometrica, October 1948

K. D. Roose, “The Empirical Status of Business Cycle Theory,” Journal of Political Economy, October 1952

K. D. Roose, The Economics of Recession and Revival, New Haven, 1954

Part II.

(1) Haberler, Chs. 3, 8, 13
Hansen, Part III

(2) Schumpeter, Theory of Economic Development, Ch. 6
Frisch, “Propagation Problems and Impulse Problems….,” in Economic Essays in Honor of G. Cassel
Goodwin, “Innovations and Irregularity…,” RES, 1946

(3) Harrod, Toward a Dynamic Economics
Baumol, Economic Dynamics, Ch. 4

(4) Hicks, Trade Cycle
Goodwin, “Secular and Cyclical Aspects of Multiplier and Accelerator” in Income, Employment and Public Policy
Goodwin, “A Nonlinear Theory of the Cycle,” RES, Nov. 1950
Alexander, “Issues of Business Cycle Theory,” AER, Dec. 1951
Duesenberry, “Hicks on the Trade Cycle,” QJE, August 1950
Chenery, “Overcapacity and the Acceleration Principle,” Econometrica, Jan. 1952
Alexander, “Accelerator as a Generator of Steady Growth,” QJE, May 1949
Matthews, “Capital Stock Adjustement—Theories of the Trade cycle and the Problem of Policy” in Post-Keynesian Economics, Kurihara, ed.
Kaldor, “Economic Growth and Cyclical Fluctuations,” Economic Journal, March 1954
Meyer and Kuh, “Acceleration and Related Theories: An Empirical Inquiry,” RES, August 1955

(5) Keynes, General Theory…, Ch. 22
New Economics, Harris, ed., Ch. 36 (Goodwin), Ch. 39 (Smithies), Ch. 40 (Tobin)
Readings, Ch. 5 (Ohlin), Ch. 12 (Samuelson)
Kaldor, “A Model of the Trade Cycle,” Economic Journal, 1940
Kalecki, Essays in Theory of Economic Fluctuations
Fellner, “Employment Theories and Business Cycles,” in Survey of Contemporary Economics, 1948, Vol. I, Ellis, editor.

(6) Metzler, “Nature and Stability of Inventory Cycles,” RES, 1941
Abramovitz, Inventories and Business Cycles (and in Conference, above)
Nurkse, “The Cyclical Pattern of Inventory Investment,” QJE, August 1952

(7) Readings, Part IV, Monetary Theory
Haberler, Ch. 2
Wicksell, Lectures, II, pp. 209 ff.
Fisher, “Debt-Deflation…,” Econometrica, 1933

Part III.

Domar, “Capital Expansion, Rate of Growth and Employment,” Econometrica, April 1946
Harrod, Dynamic Economics
Harrod, “An Essay in Dynamic Theory,” in Harrod, Economic Essays
N.B.E.R., Studies in Income and Wealth, No. 16, Long-Range Economic Projection
L. B Yeager, “Some Questions about Growth Economics,” AER, March 1954
Meier, “Some Questions about Growth Economics—Comment,” and Yeager, “Reply,” AER, December 1954

Part IV.

Bishop, “Alternative Expansionist Fiscal Policies…,” in Income, Employment and Public Policy
Readings in Monetary Theory (Friedman)
Hansen, Part IV
N.B.E.R., Conference on Regularization of Business Investment, 1951
N.B.E.R., Studies in Income and Wealth, No. 17, Short-term Economic Forecasting Readings in Fiscal Policy (Richard Irwin).

*  *  *  *  *  *  *  *

BUSINESS CYCLES AND ECONOMIC FORECASTING
Economics 245b
Spring 1956
Professor Hansen

  1. Archibald, G.C., “Inventory Investment and the Share of Wages”, THE ECONOMIC JOURNAL, June, 1955.
  2. Brems and Ozga, “Economic Growth and the Price Level”, THE ECONOMIC JOURNAL, March, 1955.
  3. Kaldor, N., “The Relation of Economic Growth and Cyclical Fluctuations”, THE ECONOMIC JOURNAL, March, 1954.
  4. Blyth, C.A., “The 1948-49 American Recession”, THE ECONOMIC JOURNAL, September, 1954.
  5. Marris, R.L., “The Position of Economics and Economists in the Government Machine”, THE ECONOMIC JOURNAL, December, 1954.
  6. Gordon, R.A., “Investment Behavior and Business Cycles”, REVIEW OF ECONOMICS AND STATISTICS, February, 1955.
  7. Matthews, R.C.O., “The Saving Function and the Problem of Trend and Cycle”, REVIEW OF ECONOMIC STUDIES, Vol. XXII, 1954-55.
  8. Stigler, George J., “The Early History of Empirical Studies of Consumer Behavior”, THE JOURNAL OF POLITICAL ECONOMY, April, 1954.
  9. Brems, Hans, “Business Cycles and Economic Policy”, THE JOURNAL OF POLITICAL ECONOMY, June, 1954.
  10. Lewis, John P., “The Lull that Came to Stay”, THE JOURNAL OF POLITICAL ECONOMY, February, 1955.
  11. Brown, E. Cary, “The Static Theory of Automatic Fiscal Stabilization”, THE JOURNAL OF POLITICAL ECONOMY, October, 1955.
  12. Nurkse, Ragnar, “Period Analysis and Inventory Cycles”, OXFORD ECONOMIC PAPERS, September, 1954.
  13. Mills, E.S., “Professor Nurkse on Inventory Cycles”, OXFORD ECONOMIC PAPERS, June, 1955.

*  *  *  *  *  *  *  *

BUSINESS CYCLES AND ECONOMIC FORECASTING
Economics 245b
Spring 1956
Professor Hansen

  1. National Bureau of Economic Research, Studies in Income and Wealth, Vol. 16, LONG-RANGE ECONOMIC PROJECTIONS.
  2. Goldsmith, A STUDY OF SAVINGS IN THE U.S. 1955.
  3. Dewhurst, AMERICA’S NEEDS AND RESOURCES, 1955.
  4. Creamer, PERSONAL INCOME DURING BUSINESS CYCLES, (National Bureau of Economic Research), 1956.
  5. Fellner, TRENDS AND CYCLES IN ECONOMIC GROWTH, (Holt), 1956.
  6. Schumpeter, HISTORY OF ECONOMIC ANALYSIS.
  7. Klein, ECONOMIC FLUCTUATIONS IN THE U.S.
  8. Tinbergen, ECONOMETRICS.
  9. Abramovitz, INVENTORIES AND BUSINESS CYCLES.
  10. Baumol, ECONOMIC DYNAMICS.
  11. Harrod, TOWARDS A DYNAMIC ECONOMICS.
  12. Ricardo, Vol. II, NOTES ON MALTHUS, (ed. by Sraffa).
  13. Colean and Newcomb, STABILIZING CONSTRUCTION, (McGraw-Hill).
  14. Smithies, THE BUDGETARY PROCESS IN THE U.S.
  15. Smithies and Butters, READINGS IN FISCAL POLICY.
  16. Colm, ESSAYS IN PUBLIC FINANCE AND FISCAL POLICY.
  17. Burns, THE FRONTIERS OF ECONOMIC KNOWLEDGE.
  18. Hicks, THE TRADE CYCLE.
  19. Kurihara, POST-KEYNESIAN ECONOMICS.
  20. Lundberg, THE BUSINESS CYCLE IN THE POST-WAR WORLD.
  21. Wallich, MAINSPRINGS OF THE GERMAN REVIVAL.
  22. National Bureau of Economic Research, BUSINESS CONCENTRATION AND PRICE POLICY.
  23. Svenniloson, GROWTH AND STAGNATION IN THE EUROPEAN ECONOMY.
  24. Joint Committee on the Economic Report, (Nov. 9, 1955), FEDERAL TAX POLICY FOR ECONOMIC GROWTH AND STABILITY.
  25. PRESIDENT’S ECONOMIC REPORT, 1956.
  26. Lane and Riemersma, ENTERPRISE AND SECULAR CHANGE.

 

Source:  Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 6, Folder “Economics, 1955-56 (2 of 2)”.

Image Source:  Hansen (left) and Haberler (right). Harvard Class Album, 1942.