“Macro-economics” was explicitly named in the course description for the Harvard undergraduate economics tutorial [Economics 98b] in 1962-63. For the next several years, no course even included “macroeconomics” in its title. Instead graduate students were taught “aggregate economic theory”, an early and one might argue more felicitous name than “macroeconomics”. In an earlier post the reading list for Robert Dorfman’s aggregate economic theory course has been transcribed. This post adds his final exam questions.
During the second term of 1958-1959 the same course content was taught by Dorfman as “Economics 241. Money and Banking”.
_________________________
Course Announcement
Economics 241. Aggregate Economic Theory
Half course (fall term). M., W., (F.), at 12. Professor Dorfman.
Source: Harvard University, Faculty of Arts and Sciences. Courses of Instruction for Harvard and Radcliffe, 1962-1963, p. 106.
_________________________
Course Final Examination
HARVARD UNIVERSITY
Department of Economics
Economics 241
Midyear Examination
January 30, 1963
Answer any THREE questions. Spend about an hour on each, and develop your discussion to corresponding fulness. In each answer include citations to the literature where relevant. Please write legibly. Indicate which questions you answered on the cover of your first book.
- Among the simplifying assumptions made by Keynes are:
- The rate of interest does not enter into the consumption function,
- The level of income does not enter into the marginal efficiency of capital function,
- The level of income does not enter into the liquidity preference function.
Discuss the consequences of relaxing these assumptions, singly and in combination, for the equilibrium analysis and stability of an economy that can be described by a Keynesian-type model.
- It is sometimes argued that the Keynesian theory is nothing but a classical theory where price-rigidities are permitted in certain markets and where the velocity of money circulation depends on the rate of interest. Defend or refute this position.
- Compare the Swedish theory of the cumulative process, as expounded by Wicksell or Ohlin, with Harrod’s explanation of dynamic instability. Bring out the elements common to the two theories as well as the contrasts between them.
- One of Gurley and Shaw’s main conclusions is that if a central bank “stipulates not only the nominal reserves of commercial banks but the reserve-balance as well … [it will be] able to regulate creation of nominal money and the price level. Nominal money, nominal bonds, and money prices of goods and labor are now determinate.” (pp. 261-262) Sketch their model and the argument leading to this conclusion.
- Appraise the importance of the interest rate as a determinant of (a) the level of investment and (b) the level of employment.
Source: Harvard University Archives. Final Examinations. January 1963. Social Sciences. (HUC 700.28, No. 144 of 284).
Image Source: See the 27 June 2002 Boston Globe obituary for Robert Dorfman.