International trade and finance were covered at M.I.T. in a two semester sequence from the late 1940s through the mid-1970s mostly by Charles Kindleberger who handed off “his” courses to Jagdish Bhagwati and Rudiger Dornbusch. In his papers at the M.I.T. archives we find two folders with many, if not most, of the exams for these courses. Today I add transcriptions of the exam questions from the 1953-54 and 1954-55 years.
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Posted earlier:
M.I.T. International Economics Examinations. Kindleberger, 1950-51
https://www.irwincollier.com/m-i-t-international-economics-examinations-1950-51/
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Course Announcement
14.581, 14.582. International Economics. [Kindleberger] The foreign exchange market, foreign trade and commercial policy, with emphasis on the relation of the items in the current account to national income; international finance and the achievement and maintenance of equilibrium in the balance of payments as a whole: current problems of international economics.
Source: Massachusetts Institute of Technology. Catalogue Issue for 1954-1955 (June 1954), p. 147.
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14.581 One hour quiz
November 15, 1955
- (10 minutes)
In balance-of-payments accounting, practice differs or is disputed in connection with the following items, among others. What are the various ways in which a country may treat three of them, and what is the justification for each of these.- Immigrants’ remittances
- Payments to one’s own nationals for carriage of imports
- Official international grants, such as Marshall Plan aid
- Profits of a foreign enterprise, located within the reporting country’s borders
- (10 minutes)
Define, sketch the content of discuss the usefulness of the purchasing power parity doctrine. - (30 minutes)
In what major respects does the classical theory of international trade differ from modern theory, with particular reference to the origin of trade and the mechanism of adjustment?
Source: MIT Archives. Charles Kindleberger Papers, Box 22, Folder “Examination 14.481, 1949-1966.”
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Typed Kindleberger notes
for 14.581 Quiz of November 23, 1954
[Quiz question sheet not available]
- True or False
Some ambiguity attached to three questions:
#3. Where purchasing power parity said to relate merely to foreign trade goods. Originators thought of it as much more than this and therefore false. Foreign trade goods always equated through law of one price.
#4 may depend on which multiplier used [this item added as handwritten note]
#5. Is trade possible with identical endowments and tastes: yes because of decreasing costs (answer yes with different states of arts, i.e. different production functions).
- What factors determine what goods and services a country will export and import?
Answer should encompass
law of comparative costs or advantage
production possibilities curves and tastes
possibly the many-commodity case
factor endowments underlying the production possibility curve, decreasing costs as a special case
possible qualification for transport costs
No need to discuss question of price, offer curves at any length in the two commodity case. Does become important in the many-commodity case.
- Demonstration either mathematical, prose, arithmetic, geometrical
Points should be mentioned: offer curves or average revenue curves
elasticities of supply
initial size of deficit
not partial but complete elasticity (i.e. income effects)
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MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMICS 14.581
Wednesday, January 26, 1954
Time 9:00-12:00 A.M.
NOTE: Students are not permitted to use any books, notebooks or papers in this examination. If brought into the room, they must not be left on the desks.
Answer 6 questions. All have equal weight.
- Argue for or against including four of the following in the current account of the balance of payments:
- Immigrants’ remittances
- Payments to own nationals for carrying imports
- Domestic gold production
- Government shipments of supplies to own troops abroad
- Government shipments of supplies to foreign troops abroad under military assistance programs
- Increase of inventories abroad held by domestic firms
- Discuss the relation of a forward market to the ease and cost of hedging and speculation in foreign exchange under various conditions.
- Indicate in what ways the effects of discriminatory state trading can be duplicated by multiple exchange rates and by a system of tariffs and subsidies on exports and imports.
- What is the role of demand in the pure theory of international trade?
- Describe differences and similarities in the process of adjustment in international trade, starting say with a domestic crop failure in an export commodity, under the fixed-exchange standard on the one hand and the fluctuating exchange standard on the other.
- What difference does it make whether a country uses tariffs or quotas in carrying out its commercial policy?
- Attack or defend anti-dumping tariffs.
- Analyze the forces non engaged in trying to change or modify the tariffs of the United States.
* * * * * * * * * * * * *
[Kindleberger’s typed comments in the margins of examination.
These appear to have been written (at least in part) after having graded the examinations.]
- natl income vs fx budget
treatment of M
monetary vs non-monet
residents
exports and donation
capital not current - some neglected severance of arbitrage
- Question 3 should be reworded effects of state trading can be duplicated by multiple exchange rates and a system of taxes and subsidies
- offer curves
indif curves
Graham
not elasticities (pure) - Question five drew 3 blanks of people who looked only at short run mechanism and not at long run.
[following list spans questions 5 and 6 in the margin]
income effects
price effects
symmetry and dif.
redistribution
protective
but revenue - Question six should include in answer reference to multiplier, potential monopoly
- many mercantilists discovered
Source: MIT Archives. Charles Kindleberger Papers, Box 22, Folder “Examination 14.481, 1949-1966.”
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Mid-Term Quiz
14.582
March 22, 1955
(Twenty-five minutes each)
- What happens to the terms of trade in the course of a capital transfer?
- Evaluate the contribution which direct investment can make to economic development.
or
- Discuss the problem of economic stability in an “export economy.”
Source: MIT Archives. Charles Kindleberger Papers, Box 22, Folder “Examination 14.482, 1951-1976.”
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MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Scheduled Examination in
INTERNATIONAL ECONOMIC—14.582
Saturday, May 28, 1955
Time: 9.00-12.00 A.M.
NOTE: Students are not permitted to use any books, notebooks or papers in this examination. If brought into the room, they must not be left on the desks.
Answer 1 and 2; and three of the remaining five questions, but not 5, 6, and 7
- Write a review of the monograph on capital movements which you read, setting out in particular what the author was trying to demonstrate, how effectively he (or she) succeeded, and whether the passage of time and the development of economic theory have made it possible to modify his (or her) conclusions.
- Discuss the principal problems concerning foreign trade in a country engaged in economic development with which you are familiar.
……………………….
- To what extent and under what circumstances can short-term capital movements give rise to or substitute for gold movements under a fixed-exchange standard?
- Compare and contrast the International Monetary Fund and the European Payments Union. What are the strengths and limitations of each institution?
- Discuss the effects of differential rates of productivity increase on international economic equilibrium.
- Compare exchange depreciation and deflation as remedies for balance-of-payments disequilibrium.
- To what extent, in your judgment, is the present disequilibrium state of balances of payments due to the failure to create institutions which provide for international, long-term capital movements.
Source: MIT Archives. Charles Kindleberger Papers, Box 22, Folder “Examination 14.482, 1951-1976.”
Image Source: Charles P. Kindleberger from the MIT Museum.