M.I.T. General exams for international economics, 1959

 

It seems safe to assume that Charles Kindleberger was the principal author of these general exams for the field of international economics (i.e. international trade and finance) since the exams come from his papers at the M.I.T. archive. I don’t know whether he had been the sole author. Maybe Samuelson contributed an international trade question or two, but that is much more speculative than Kindleberger’s likely authorship.

The general exams in international economics for 1950-51 have been transcribed and posted earlier.

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INTERNATIONAL ECONOMICS
February 16, 1959

Part I

Write an essay on any two or three of the following topics.

1. The gains from trade.
2. The effect of foreign trade on the distribution of income.
3. Structural disequilibrium in the balance of payments.
4. What determines the commodities and services a country will export and import?
5. Elasticity conditions in international trade.

Part II

Answer any two or three of the following questions.

1. A distinguished economist has stated that an underdeveloped country which is not developing balance of payments trouble, is not trying very hard to develop. Explain this view and discuss it critically.
2. The New York Times recently had an article explaining that the present favorable position of the British and other West European balances of payments was really a bad sign because it was accompanied by a reduction in the volume of world trade. In particular, the improvement in the British balance of payments was due to a sharp improvement in the terms of trade which could not help worsen the situation after a few months.
   What have favorable or unfavorable terms of trade to do with the matter?
3. What is the purpose of two of the following. How well have they filled, or are they filling, that purpose?
   1. The International Bank for Reconstruction and Development.
   2. The International Monetary Fund.
   3. The Colombo Plan.
   4. The Marshall Plan.
   5. The European Payments Union.
4. The following is a real quotation from a distinguished economist: “Under a system of free trade there would be conflicts in interests neither among different nations nor among corresponding classes of different nations.”
   Discuss critically.
5. “If all countries pursued full employment policies and at the same time avoided inflationary pressures, the balance of payments would present no problem.” Discuss theoretically.
6. “There is no reason why a country could not pursue any domestic policy it liked provided it did not care about exchange stability.”
   “A country could have any fixed exchange rate it chose provided it pursued the correct domestic policy.”
   Discuss these quotations critically.
7. Write an essay on the advantages and disadvantages of aiding underdeveloped countries through private capital movements, governmental loans and gifts on a bilateral basis or through multilateral aid.
8. “It is frequently stated that aid should be given ‘with no strings attached.’ And this is a meaningless statement, because you can’t just send an anonymous check and say: do what you want.”
   What is meant by such a statement? What conditions could be attached to aid to make it effective?
9. Write an essay on the instruments of commercial policy and discuss the effectiveness of each.

 

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General Examination in International Economics
May 20, 1959

Answer any five questions

1. Discuss the relevance of the factor-price equalization theorem to the observed facts of international trade.
2. It has been said that the theory of international trade is peculiarly static and that this vitiates its applicability to the problems of growing economies. Do you agree or disagree? Discuss.
3. Analyze the relevance of international trade (and tariffs) to wages and employment in as many contexts as are significant.
4. What differences exist between internal trade in a single country, economic integration between sovereign countries, and international trade between unintegrated countries? Is there more content to economic integration than customs union?
5. Discuss the relative roles of income and price in international adjustment, not in theoretical models, but as they have operated in the real world as observed by historians, by econometricians, or by casual empiricists. What generalizations, if any, can be drawn from this experience regarding the efficacy of exchange depreciation in producing adjustment?
6. Argue for or against central bank intervention in the forward exchange market.
7. What can the economist say about foreign aid?
8. Compare and contrast the impact of foreign trade and lending on economic stability in a developed country and in an export economy? What monetary and commercial policy devices are available to the latter to promote stability?
9. Write brief didactic essays setting forth the “correct view” (conventional wisdom) of international trade economists on two of the following subjects:
   1. the long-run terms of trade facing underdeveloped countries;
   2. the persistent surplus in the German balance of payments;
   3. the regional vs the universal approach to commercial policy and intergovernmental lending;
   4. commodity price stabilization;
   5. multiple exchange rates: blessing, menace, crutch for the feeble?
10. Argue the case for modifying the Articles of Agreement of the International Monetary Fund, or its procedures under the present articles, or for leaving both Articles and Procedures alone.

 

Source: M.I.T. Libraries. Institute Archives and Special Collections. Papers of Charles Kindleberger, 1934-99. Box 22, Folder “Examinations. International Economics, 1959-75”.

Image Source: M.I.T. Yearbook Technique, 1950.