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Exam Questions M.I.T.

M.I.T. General Exams in Macroeconomics, 1959-71

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The original plan of Economics in the Rear-View Mirror was to provide a single artifact for each post. Larger (composite) data sets are given dedicated pages (e.g. Harvard Ph.D.’s in economics 1875-1926; Chicago Ph.D.’s in economics 1894-1926; Economics Rare Book Reading Room). Sometimes I come along a group of artifacts that are best kept together so I end up with a post like today’s that prints out as more than 25 pages of text. 

Today’s treasure is a fairly complete run of MIT general examination questions in macroeconomics for the period 1959-1971 found in a folder in the Evsey Domar papers at the Economists’ Papers Archive at Duke University. For a few of the exams we even have handwritten records indicating the questions chosen by the examinees and the grades awarded (I have omitted the names).

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May 22, 1959
General Examination in Macroeconomics

Answer four questions, including at least one from each group.

I.

  1. (a) Explain the basic economic philosophy which forms the foundation of modern national income (and gross product) estimates in Western countries.
    (b) Show how this philosophy is transformed into specific criteria used by the U.S. Department of Commerce in their estimates of Gross National Product, National Income, and Consumer Disposable Income. Be as specific as you can.
  2. Present a careful analysis of the problem of “Price Flexibility and Employment” and trace its discussion (that is, of its principal points) through economic literature beginning with Keynes’ General Theory.
    What practical conclusions follow from this discussion?
  3. It was repeatedly said in 1946 that “Increased production is the best cure against inflation.” Comment on this statement as completely as you can. (Hint: Consider the dual aspect of the production process.) In the light of your finding, do you think a labor strike to be deflationary or inflationary?

II.

  1. Construct a “flexible” multiplier-accelerator model in which the government plays an active role. That is, it levies a proportional income tax and engages in stabilizing expenditures.
    1. Imagine first that the tax on last year’s income is collected this year, while consumers recon their disposable income on a cash basis (i.e. income earned minus taxes actually paid). Government expenditures are constant. How do changes in the tax rate affect the behavior of the model?
    2. If the tax system should go on a withholding basis, so that the tax on this year’s income is collected this year, how does that affect the stability and other characteristics?
    3. Taking taxes as in (b), suppose government expenditures are proportioned to the gap between full employment income and last year’s income. Is this stabilizing?
    4. Suppose government outlays are a decreasing linear function of the observed rate of change of income. Is this stabilizing?
  2. It is often said that the cause of any depression is the previous boom and its “excesses.” Does this make sense in terms of modern business cycle theory?

III.

  1. “The purpose of taxation is never to raise money but to leave less in the hands of the taxpayer.” Comment fully and critically. Can you identify the author? (No great penalty if you cannot.)
  2. To the best of your ability, try to analyze the incidence of a corporate income tax. What empirical information would you need for this purpose? (Please be reasonable).
  3. “People are always willing to become wealthier. The problem of economic growth in advanced countries is: will the public be willing to add to its holdings of physical assets an amount equal to the unconsumed portion of full employment output?” Discuss fully including a description of the alternatives to holding physical assets, the efficacy of the price system, policy measures.

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February 8, 1960
GENERAL EXAMINATION IN ECONOMIC THEORY

For the old-style exam (microeconomics alone), answer the first question (one hour) and any three of the others in Part I (two hours). For the new-style exam, answer any three questions in Part I (two hours) and any three questions in Part II (two hours), but without including both 3 and 4. Use separate books for Parts I and II.

PART I

  1. In a purely competitive economy, the only goods are food (F) and clothing(C), and the only factors are labor (L) and land (T), both fixed in supply. Each household supplies either L or T, but not both. Both goods are produced at constant returns to scale with both L and T. Isoquants are normally curved for both products; and, at any given marginal rate of substitution, a higher ratio of T to L is implied for F than for C.
    1. Show how the economy’s transformation curve for F and C is derived. Could it be either concave or convex or linear, and why?
    2. If everyone in the economy always divides his income equally between F and C, show how this determines uniquely what goods are produced, how they are produced, and for whom.
    3. How is that general equilibrium modified if the government imposes a tax on F and distributes the entire proceeds equally among all of the labor-supplying households. (Assume for simplicity that the tax and subsidy involve no administrative costs.)
    4. Would there be better ways of achieving the same redistribution of income? Explain fully why or why not.
  2. The demand for a monopolist’s produce is given by p = 50 – .001q. Within the relevant range, his total cost as a function of his output is C = 40q – .0005q2.
    1. In the monopolist’s long-run equilibrium, what are his price, output, and profit?
    2. How are those magnitudes affected if demand now increases to p= 56 – .001q?
    3. In general, what factors determine whether a monopolist’s equilibrium price will rise or fall in response to an increase in demand? Explain how the actual result in the present example fits in with those general principles.
  3. Plant capacity for a certain product costs $6 per year per unit of output. Given a plant of any particular size, any output up to the capacity level can be produced at a variable cost of $12 per unit; and outputs in excess of capacity are impossible. Demand is given by p = 24 – .001q (where p is the price of the product in dollars per unit and q is the quantity of product demanded per year).
    1. What are the long-run-equilibrium prices, outputs, and profits under conditions of (i) monopoly and (ii) pure competition?
    2. How are those equilibrium magnitudes affected in both the short and long run if new technological knowledge suddenly makes it possible to produce the product with a new type of equipment at a capacity cost of $5 per year per unit of output and a variable cost of $9 per unit of output. (Assume that, in the short run, new capacity can be added but none of the pre-existing capacity wears out. In the long run, all of the old capacity does wear out.)
  4. Show how an individual’s labor-supply curve can be derived from his basic preferences for leisure and income, assuming that he also has a fixed income from other sources. Then show the comparative effects of three alternative taxes that might be imposed to extract the same revenue from this man: (a) a lump-sum or poll tax, (b) a proportional income tax, and (c) a progressive income tax.
  5. Summarize Ricardo’s theory of rent, and evaluate its correctness and realistic relevance. In what sense, if any, does rent not enter into cost? Explain carefully.

PART II

  1. Discuss the role played by population growth in modern theories of economic development and business cycles. Be specific.
  2. Write an essay on the subject of “The General Theory After Twenty-Five (almost) Years.” Include in it, among other things, your evaluation of the usefulness of the book from the point of view of: (a) an advanced capitalist economy like the U.S.; (b) an underdeveloped mixed economy like India; (c) a centrally directed socialist economy like the USSR.
  3. Present your favorite theory (traditional, eclectic or entirely original) of the business cycle. Explain the empirical tests which you would subject it to. Be specific.
  4. Present an explanation of the causes of the current inflation in this country. Indicate the empirical tests which your explanation would have to pass. Be specific.
  5. (a) Explain the reasons why the economic activities of the government create special problems in national income (or gross product) accounting. Analyze critically the treatment of these problems by the U.S. Department of Commerce.
    (b) “Existing methods of international comparisons of per capita national income have an upward bias in favor of advanced countries.” Comment. “Don’t forget to indicate what these methods are.)

 

Comprehensive Exam Grades in Macro Theory
MIT Feb. 1960

[Student]

 Q1 Q2 Q3 Q4 Q5 Average Remarks
[1] 50 (F) 30 (F) 60(D) F+ Fail
[2] 60(C-) 20(F-) 60(C-) D ? [guess: “Directed information to who? , ≥4 fail”]
[3] 70 (C) 65 (C) 70 (C) C Fair –
[4] 70 (C) 70 (C) C Fair –

A: 90-100
B: 75-89
C: 60-74
D: 50-59
F: less than 50

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September 19, 1960
General Examination in MACROECONOMICS

Answer three questions; at least one from each part.

I.

  1. Discuss Savings as an economic problem.
  2. a. Write an essay on the subject of “The Problem of Intermediate Products in National Income and Product Accounting.” Be as comprehensive as you can.
    b. Compare briefly the treatment of intermediate products in the Input-Output and Flow-of-Funds systems.
  3. Write a comprehensive essay on the subject of “The Economic Significance of the Rate of Interest.”

II.

  1. Write on the capital-output ratio as a tool for economic analysis, including some comment on:
    1. The problem of defining, measuring and interpreting the concept.
    2. Known facts about the historical course of the ratio..
    3. The role the concept plays in theories of growth and fluctuations.
  2. What are the facts about the relative magnitude of cyclical fluctuations in the output of capital goods and consumer goods? What are the theoretical implications of the facts as you know them? Discuss in this light the mildness of post-war economic fluctuation in the U.S.
  3. Write an essay on the contribution to the theory of economic growth of one of the following: Wicksell, Schumpeter, Kaldor, Tobin.

 

Macroeconomics Grades
Sep. 1960

Part I Part II Aver.
Q1 Q2 Q3 Q1 Q2 Q3
[1] G- G- F+/G- G-
[2] G F+ F-/Fail
[3] G+ F+ G- G-
[4] G+ G/G+ G- G/G+
[5] G G+ G- G
[6] G G G G

 

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February 6, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Part II—Macroeconomics—Two Hours

Answer THREE questions, at least ONE from each Part. Use a separate examination book for each question.

Part I.

  1. Write a comprehensive essay on the subject of “International Comparisons of National Income and Product”.
  2. Discuss saving as an economic problem. Trace the treatment of saving in the relevant economic literature.
  3. Write a comprehensive essay on the subject of “The Economic Significance of the Rate of Interest”.

Part II.

  1. Assume that inventory behavior is governed in the following Metzlerian way:
    1. Desired inventory is proportional to expected sales.
    2. Planned inventory investment behaves according to the capital stock adjustment principle (“flexible acceleration”).
    3. Expected sales equal last period’s sales.
    4. Current sales are proportional to current income, with unexpected sales made from stock.
    5. Income is the sum of Sales, exogenous government and fixed investment expenditures, and inventory investment (including unplanned!).

Now suppose operations research succeeds in (i) reducing the desired inventory-sales ratio and (ii) increasing the speed of adjustment. What effects will this have on the cyclical behavior of the system?

  1. Discuss the role of (i) floors and ceilings and (ii) autonomous investment in theories of growth and fluctuation, and say something about the realism of each concept.
  2. Formulate a one-sector model of economic growth using the following assumptions:
    1. One commodity, usable either as consumer good or as capital good.
    2. Its output is given by a production function with the stock of the capital good and labor as inputs, under constant returns to scale. (Consider various degrees of substitutability.)
    3. Depreciation proportional to stock of capital.
    4. Supply of labor grows geometrically, and exogenously, and is inelastically supplied.
    5. Competitive profit-maximizing rules.
    6. All profits are saved, all wages consumed.

Within this model, discuss the properties of the full-employment growth path (i.e. the development of output capital, wages, etc., which will equate desired saving and investment at full employment).

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May 22, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two Hours

Answer THREE questions, at least ONE from each part. (Course XV students answer ONE question from each part only.) USE A SEPARATE EXAMINATION BOOK FOR EACH QUESTION.

Part I.

  1. Write a comprehensive essay on the subject of “The Measurement of Economic Growth”. Include in it the description of existing methods, their rationale (the most important part) and your suggestions for improvement.
  2. Write an essay on “The General Theory after Twenty-Five Years”.
  3. a. Explain the nature and the rationale of the definition of the concept of money in “Price Flexibility and Employment” problems.
    b. “If the ‘Balanced-Budget Multiplier’ is correct, isn’t Say’s Law also correct?” Comment fully.

Part II.

  1. “By making existing capital assets obsolete, technological progress is alleged to create new investment opportunities and thus raise the level of income and employment. But to the extent that such obsolescence was foreseen, the assets were depreciated over a shorter period and thus gave rise to larger gross savings. Therefore, expected technological progress fails to stimulate the economy.” Comment fully.
  2. Present your favorite (traditional, eclectic, or original) business cycle theory. Indicate the empirical tests to which it will be subjected.
  3. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity; price increases will thus be avoided.”
    Comment fully and critically; indicate and justify your wage and price policy.

 

General Exam Grades “MacroTheory” May 22, 1961

[Part] I [Part] II
[Student] Q1 Q2 Q3 Q4 Q5 Q6 Average
[1] G G-/F+ F+ G-
[2] G- G-/F+ F- F+
[3] F+ G- G G-
[4] E- G- E- G+
[5] G+ G- F G-
[6] E-/G+ G F G
[7] G+ G- F- G-
[8] E- E- G+ E-
[9] Failed F F-/Failed Fail+
[10] F+ G G- G-
[11] G G F- G-
[12] G- G-/F+ F- F+
[13] F+ G- G G-
[14] G+ G- G G
[15] Failed G G-/F+ F+
[16] F-/Failed Failed Failed
[17] G-/F+ F F+

 

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September 18, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two Hours

Answer FOUR questions, TWO from each part. USE A SEPARATE EXAMINATION BOOK FOR EACH QUESTION.

Part I.

  1. State, explain and justify the treatment of government expenditures (Federal, state and local) in the computation of national product and its components. Why is government treated differently from other sectors? What is the logical foundation for such treatment?
  2. Compare and contrast the Keynesian and the so-called Classical systems.
  3. Contrast the investment criteria applicable to (a) an individual firm, (b) the U.S. government, (c) the government of an undeveloped country. Explain clearly your reasons for such differences, if any.
  4. Write an essay on “The History of the Consumption Function.” Indicate and evaluate the major contributions. How significant are they? Which one do you prefer and why?

Part II.

  1. Describe fully the “economic indicator” approach to economic forecasting. Evaluate its performance. Compare it with the use of projected models of GNP.
  2. Describe the long-term trends in (a) population, (b) output, (c) capital, (d) real wage rates, (e) interest, (f) relative shares, (g) capital-output and other important ratios. What constancies have people claimed to observe? What behavior is explicable by a simple neoclassical model? What points to technological change or to various non-neoclassical growth theories? Mention authors as well as theories.
  3. Summarize briefly the historical facts on business cycles or fluctuations here and abroad. What theories have been suggested? Besides naming names, give your own best way of cataloguing the different theories (e.g. non-linear, etc.).
  4. Give the basic facts on “growth” here and abroad, recently and in history. How could America increase its sustained growth rate? Be analytical and specific.

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February 5, 1962
GENERAL EXAMINATION IN ECONOMIC THEORY
Part II—Macroeconomics
TWO HOURS

Please answer THREE questions, at least ONE from each Part. Use a separate examination book for each question.

Part I.

  1. “Existing methods of national product computation exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of undeveloped countries.”
    Comment fully.
  2. Compare and contrast the economic effects (on growth and level of income, employment, income distribution, and on any other phenomena you consider important) of population growth and of the growth of the capital stock.
  3. a.Explain the basic assumptions and reasoning used in the “Price Flexibility and Employment” discussions. (If you can, identify the authors involved.)
    b. Explain the nature and definition of the concept of money used in the same discussions.
    c. “If the ‘Balanced-Budget Multiplier’ is correct, isn’t Say’s Law also correct?” Comment fully..

Part II.

  1. Analyze a one-sector growth model in which net output is produced by labor and capital by a smooth neoclassical constant-returns-to-scale aggregate production function experiencing no technical change. Net output is divided up into consumption and net capital formation (or investment). Consumption, according to Modigliani, is 100 per cent of income when the capital wealth-to-output ratio is, say, 3, being a fraction at lower ratios and exceeding unity at higher ratios.
    1. First, let labor supply be stationary. Starting with very low capital, describe the evolution of the system’s output, wage rate, interest rate, capital, and various ratios (Q, w, r, k, k/L, Q/L, Q/k, wL/rk, etc.)
    2. Do the same if labor will always grow at 2 per cent per year.
  2. Describe and contrast business cycle approaches of (a) The National Bureau of Economic Research, (b) Econometricians like Tinbergen and Klein, (c) other typical modern Evaluate with respect to policy, prediction, explanation and present-day relevance.
  3. How can President Kennedy increase “growth” in a world with problems of international payments, possible wage-price “creeps,” fiscal burdens for defense, and stubborn productivity and personal thrift patterns. Prescribe, diagnose, and compromise dilemmas if there are any.

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May, 1962
GENERAL EXAMINATION—MACROECONOMICS

 

Answer three questions, including at least one from each part.

PART I

  1. a. Write an essay on the subject of “The Problem of Intermediate Goods in National Income and Product Accounting”.
    b. Suppose you were asked to compute national income and product for an economy consisting of a Prince and a number of slaves, from the point of view of the Prince. Explain the modifications of the usual methods that this assignment will require. Do you think it will result in a larger or a smaller income?
  2. A critic of Keynes’ General Theory once said that “What is new in it is wrong, and what is right is old”.
    Comment fully.
  3. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others”.
    Comment fully.

PART II

  1. Is an economy which has been growing at full employment (and full utilization of capacity) helped or hindered in the maintenance of full employment (and utilization) by a more rapid rate of growth of the labor force?
  2. It is sometimes said that the widespread adoption of scientific inventory control, permitting lower inventory-sales ratios on the average, will have the effect of damping inventory fluctuations. Discuss this theoretically. Do the same for the advent of improved forecasting methods.
  3. Discuss the relation between the propensity to save and the rate at which potential output increases.

 

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September 17, 1962
GENERAL EXAMINATION IN ECONOMIC THEORY
Part B—Macroeconomics

TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write an essay on the role of microeconomics in the construction and the testing of macroeconomic theory.

Part II

  1. Discuss and evaluate the treatment of government in the U.S. National income Accounts. Give special emphasis to the problems involved in using the figures for intertemporal and international comparison of the role of government both as a user of resources and as a producer.
  2. Write an essay on the “history, nature and significance” of the consumption function. 

Part III

  1. Discuss the issues of concept, theory, inference, and measurement that are involved in estimating the relation between investment and the growth of potential output.
  2. What is your theory of inflation? How does it tie in with modern business cycle theory?

 

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GENERAL EXAMINATION IN MACROECONOMICS
February 4, 1963

ANSWER ONE QUESTION FROM EACH PART (THREE QUESTIONS IN ALL).

Part I.

  1. Suppose that in an economy in equilibrium a large number of enterprises operating as proprietorships and partnerships decide to incorporate.
    1. List the principal ways in which the national income accounts might be affected in the short run. (Make explicit any reasonable assumptions you may want to make about real changes in the flows of spending and income.)
    2. What fallacious conclusions might you draw as to structural changes in the economy from these changes in the accounts if you did not know their source?
  2. Explain the basic economic philosophy which forms the foundation of national income and product estimates in the United States. Indicate how this philosophy is applied by the Department of Commerce in its estimates of Gross National Product, National income, and Disposable Income. (Be specific.)

Part II.

  1. Discuss, making use of an explicit model of income-determination, the various ways in which prices and wage rates enter into the determination of national income. In particular, what are the issues of theory and fact which are relevant to the debate about “underemployment equilibrium”?
  2. Identify and discuss, briefly and concisely, the nub of the issues raised by each of the following (where appropriate use an explicit model)
    1. “The rate of interest bears no necessary relation to the quantity or value of the money in circulation. The permanent amount of the circulating medium, whether great or small, affects only prices; not the rate of interest.” (J. S. Mill)
    2. “If it is true that the marginal propensity to consume of wage earners is higher than of profit recipients, one way to cure a deflationary gap and unemployment is to raise the money wage rate.”
    3. “Increased production is the best cure against inflation.”
    4. “The cause of any depression is the previous boom and its “excesses”.”

Part III.

  1. Discuss the critical issues of fact, theory, and value that are involved in designing a fiscal-monetary policy for the United States for the mid-1960’s. Elaborate, in particular, the criteria in terms of which you (“as economist”) would evaluate any particular mix of instruments.

 

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General Examination in Macroeconomics
May 13, 1963

Answer three questions in all, including at least one from each part.

I.

  1. In the earlier postwar period it was often said that “Increased production is the best cure against inflation.” Comment on this statement. In the light of your comment, do you think a prolonged strike is inflationary or deflationary?
  2. a. Set up a reasonable aggregative model appropriate to a closed economy where the money wage rate is rigid ownwards (only downwards).
    b. Assuming that the initial equilibrium configuration yields “full employment” and that the money wage rate cannot fall below the initial equilibrium wage rate, trace the effects on the critical variables of

    (i) an increase in the nominal stock of money

    (ii) a decrease in the nominal stock of money

    (iii) an autonomous fall in the volume of investment

    c. In each case, how would your answers differ, especially as regards the possibility of “under-employment equilibrium”, if the money wage rate, as well as all other prices, were fully flexible?
    d. How would your answers differ if money wage rates were governed by two-way escalator clauses?

  3. Write an essay on the theoretical and empirical foundations of an eclectic macroeconomic theory of demand for investment.

II.

  1. In Kaldoria, the marginal (=average) propensities to save out of wages and out of non-wages are different. The latter exceeds the former by a considerable margin. Together wages and non-wages exhaust national income. Markets are such that when national income exceeds a certain value Y*, the share of profits in national income tends to rise, and when national income falls short of Y*, the share of profits tends to fall. Finally, all investment is exogenous.
    1. Show that Y* is a stable level of national income.
    2. Calculate the share of profits when national income is Y*.
    3. Can you think of any reasons why Y* should correspond to “full employment”?
    4. Discuss the factual validity of the theory. That is, does Kaldoria resemble any country you know well?
    5. Can you modify the theory to include a marginal propensity to invest out of profits?
  2. Suppose investment behavior is such that all investment opportunities which offer a rate of return greater than or equal to some fixed target rate R are instantly adopted. Labor and capital are the only factors of production and constant returns to scale prevail. (Use a Cobb-Douglas production function, if you like.) The labor force grows exogenously at a fixed annual rate g.
    1. What saving rate, relative to national product, will just maintain full employment equilibrium?
    2. How does that saving rate vary with g?
    3. What do you make of the common notion that a rapidly-increasing labor force makes it harder to maintain full employment?
  3. Describe the approximate timing of inventory investment during postwar American business cycles, and compare this with the results of some formal model of inventory fluctuations.

 

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September 16, 1963
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE QUESTIONS, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. a. Write an essay on the subject of “The Problem of Intermediate Goods in National Income and Product Accounting”.
    b. Suppose you were asked to compute national income and product for an economy consisting of a Prince and a number of slaves, from the point of view of the Prince. Explain the modifications of the usual methods that this assignment will require. Do you think it will result in a larger or a smaller income?
  2. A critic of Keynes’ General Theory once said that “What is new in it is wrong, and what is right is old”.
    Comment fully.
  3. a. Explain the nature and the rationale of the definition of money in “Price Flexibility and Employment” problems.
    b. “If the ‘Balanced-Budge Multiplier’ is correct, isn’t Say’s Law also correct?”
    Comment fully. Explain the nature of both propositions.

Part II.

  1. Discuss the role of (a) floors and ceilings and (b) autonomous investment in theories of growth and fluctuations.
    Indicate the empirical tests to which the propositions expounded by you can be subjected.
  2. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than labor productivity.”
    Comment fully and critically. Indicate and justify your wage and price policy to achieve economic growth and stability.
  3. Explain and compare the roles which the growth of population and the growth of capital (separately and together) play in modern growth and business cycle theory.

General Examination Grades in Macroeconomics September 1963

Questions
 Student 1 2 3 4 5 6 Total Grade
[1] 18 25 22 65 Fair
[2] 29 24 26 79 G
[3] 30 29 29 88 E-
[4] 22 20 23 65 Fair
[5] 29 24 25 78 G

 

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February, 1964
GENERAL EXAMINATION IN ECONOMIC THEORY
MACROECONOMICS—TWO HOURS
[Note: this exam recycled in February, 1968]

Answer THREE QUESTIONS, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write a comprehensive essay on the subject of “Comparisons of National Income and Product in Time and Space.” Indicate the biases which arise in such comparisons.
  2. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Indicate what definition of money used in your discussion.
  3. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.

Part II

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity.” Comment fully.
  2. “If Hansen is correct, the faster is the rate of growth of population, the lower will be the unemployment level in the U.S.” Discuss fully. Include natural growth of population and immigration. In what respect does the growth of population differ from that of the stock of capital?
  3. Write an essay on “Floors and Ceilings in Business Cycle Theory.” Indicate the specific theories and your methods of testing each.

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February 8, 1965
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. Write an essay on the subject of “Keynes and Patinkin on the Relation between the Quantity of Money on the One Hand, and Interest Rate, Price Level and National Income on the other.”
  2. It is frequently said that existing methods of national income computations exaggerate the present-day American per capita income in comparison with that of less developed countries and in comparison with American income in the past. Comment fully and critically. Are there statistical methods which may impart an opposite bias?
  3. Compare and contrast the economic effects (on growth and level of income, employment, income distribution, and on any other economic phenomena you consider important) of population growth and of the growth of the capital stock.

Part II.

    1. According to the 1965 Economic Report of the President:
      1. “The general guide for wages is that the percentage increase in total employee compensation per man-hour be equal to the national trend rate of increase in output per man-hour.”
      2. “The general guide for prices calls for stable prices in industries enjoying the same productivity growth as the average for the economy; rising prices in industries with smaller than average productivity gains; and declining prices in industries with greater than average productivity gains.” (p. 108)
        1. What would this policy imply for:
          1. average unit labor costs
          2. average product prices
          3. income distribution
          4. labor allocation among industries and skills
        2. According to theories of inflation you find most persuasive, what aspects of the price-wage mechanism would be most likely to frustrate the Council guideposts that are outlined above?
      1. The U. S. economic recovery from 1961 to the present has been accompanied by less inventory investment, especially in manufacturing, than occurred in previous recoveries. Some pertinent data are presented below.

 

Manufacturing
(Monthly averages for year)
$ billions
Sales Inventories Ratio
1950 18.6 31.0 1.48
1951 21.7 39.3 1.66
1952 22.5 41.1 1.79
1953 24.8 43.9 1.76
1954 23.3 41.6 1.81
1955 26.4 45.0 1.62
1956 27.7 50.6 1.73
1957 28.7 51.8 1.80
1958 27.2 50.0 1.84
1959 30.2 52.7 1.70
1960 30.8 53.8 1.76
1961 30.9 55.1 1.74
1962 33.3 57.7 1.70
1963 34.7 60.1 1.69
1964 37.1 62.2 1.64

Source: 1965 Economic Report, p. 237.

 

It has been said that this development has

    1. substantially improved the ability of the economy to avoid a recession;
    2. made it more likely that if a recession does occur, that it will be milder than it would otherwise have been.
      1. Briefly evaluate the validity of this remark by reference to the data, distinguishing intended from unintended investment to the extent possible. What minimum additional information would be required in order to make a rigorous distinction between intended and unintended inventory investment?
      2. Discuss this observation critically in the context of a sensible model of cyclical fluctuations. Do so on the presumption that improved methods of inventory control have lowered the desired inventory-sales ratio.

REMARK: Part A will be given 1/3 weight. Part B will be given 2/3 weight.

      1. Consider several alternative growth models which include technical change, labor and capital. What effects would the following policy measures have on growth rates, output/head and consumption /head:
        1. A decrease in the rate of interest;
        2. An increase in the ratio of investment and savings to toal output;
        3. A decrease in the rate of population growth.

________________________

 

May 17, 1965
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. (A) National product is defined as the sum of all final goods each multiplied by its price.
    (B) National income is defined as the sum of all net incomes of certain recipients.

Discuss the following questions:

i. What is a final good in (A)? What special problems arise from the presence of certain types of organizations?
ii. What is the rationale of multiplying each product by its price? What assumptions are implied in this procedure? Are they realistic?
iii. Whose net incomes are aggregated in (B)? What assumptions does this procedure imply? Are they realistic?
iv. Could you propose changes or improvements in the above procedures? What additional comments would you like to make?

  1. Explain the following concepts with a particular stress on the assumptions underlying them.
    1. The ordinary (Keynes’) multiplier
    2. The balanced-budget multiplier
    3. The acceleration principle

Indicate the virtues and defects of each concept and their use in economic analysis.

  1. Discuss saving as an economic problem. Trace the treatment of saving before Keynes, by Keynes and after Keynes. Evaluate the contribution of the several authors you mention critically.

Part II

  1. Consider a one-sector economy with:
    1. A conventional, constant-returns to scale, diminishing returns, technology
    2. A labor force growing at a constant geometric rate
    3. No technical progress
    4. A ratio of net saving to output which is a falling linear function of the wealth-output (i.e., capital-output) ratio

Trace out the evolution of such an economy under conditions of full employment and full utilization of capacity, starting from an arbitrary stock of capital; and show how its stead-state properties are determined.

  1. “The ‘built-in stabilizers’ cannot stabilize the economy at a full employment level but can dampen oscillations.”

Analyze this statement using the following model:

(1) Yt = Ct + It + Gt Income Definition
(2) Ct = α(Yt-1 –Tt-1) Consumption Function
(3) It = β(Yt – Yt-1) Investment Equation
(4) Tt = λCt Tax Equation

Note: the tax equation is the stabilizer in this model. Assume government outlays Gt are constant through time.

  1. Some economists believe recent high unemployment levels in the United States are structural in nature, others that the main cause has been a fairly simple Keynesian demand deficiency.
    1. Explain the main elements of the “structuralist” position. (It will be assumed that you understand Keynesian National Income analysis.)
    2. Show how the correct interpretation of these (not mutually exclusive) causes affect the analysis of price level movements in the United States over the past decade, with reference to two or three of the main theories that have been applied.

________________________

 

September 13, 1965
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I.

  1. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Why is a special definition of money required here?
  2. “Existing methods of national product computations exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of underdeveloped countries.” Comment fully and critically.
  3. In the early postwar period it was often said that “Increased production is the best cure against inflation.” Comment fully on this statement. Assume that the increase in output is indeed possible, but indicate what kind of output you have in mind. What other information would you require? In the light of your comments, do you think that a prolonged strike is inflationary or deflationary?

PART II.

  1. According to the 1965 Economic Report of the President:
    1. “The general guide for wages is that the percentage increase in total employee compensation per man-hour be equal to the national trend rate of increase in output per man-hour.”
    2. “The general guide for prices calls for stable prices in industries enjoying the same productivity growth as the average for the economy; rising prices in industries with smaller than average productivity gains; and declining prices in industries with greater than average productivity gains.” (p. 108)
      1. Using relevant aspects of production theory, what would this policy imply for:
        1. Income distribution
        2. Labor allocation among industries and skills
      2. According to theories of inflation you find most persuasive, what aspects of the price-wage mechanism would be most likely to frustrate the Council guideposts that are outline above?

Your answers should consider departures from competitive behavior where pertinent.

  1. Describe the long term trends in (a) population, (b) output, (c) capital, (d) real wage rates, (e) interest, (f) relative shares, (g) capital-output and other important ratios. What constancies have people claimed to observe? What behavior is explicable by a simple neoclassical model? Which of these regularities seem to require the introduction of technological change or the abandonment of central neoclassical propositions? Mention authors as well as theories.
  2. Discuss the role of (a) floors and ceilings and (b) autonomous investment in theories of growth and fluctuations.

________________________

 

February 7, 1966
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Answer three questions, including at least one from each part.

PART I:

  1. Write a comprehensive essay on the subject of “The Distinction between Final and Intermediate Products in economics”.
    Include in your essay (but don’t limit yourself to) the following points:

    1. The basic philosophy
    2. Governmental receipts and expenditures
    3. Input-output systems
    4. Federal Reserve Index of Industrial Production
  1. Discuss the following aspects of the “Price Flexibility and Employment” problem:
    1. The basic statement as presented by Patinkin
    2. The role and definition of money
    3. The role of expectations
    4. Your conclusions
  2. Write a comprehensive essay on the subject of “The Economic Effects of a Redistribution of Income from the Upper to the Lower Income Groups”. Indicate the positions on the subject of several economists whose views are relevant to your essay.

PART II:

  1. Is an economy which has been growing at full employment (and full utilization of capacity) helped or hindered in the maintenance of full employment (and utilization) by a more rapid rate of growth of the labor force?
  2. “I take leave to doubt whether there has ever been a trade cycle, i.e. a self-perpetuating cyclical movement, as opposed to a series of fluctuations due to the propensity of a private enterprise economy to exaggerate its response, either way, to the changes of history as it meets them.” Discuss this remark of Joan Robinson’s.
  3. Consider a conventional one-sector neoclassical growth model (i.e. constant returns to scale and smoothly diminishing returns in labor and capital, full employment). There is no depreciation and the labor supply is growing exponentially. The ratio of investment to output is constant. There is “disembodied” purely labor-augmenting technological progress going on exponentially at the rate a/j where j is the elasticity of output with respect to labor input (not necessarily a Cobb-Douglas constant).

Analyze how the steady-state rate of growth depends on the value of the investment-output ratio.

________________________

 

May 13, 1966
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I

  1. Beginning at least with Adam Smith, there has been much ado in economic writings about productive and unproductive activities and about their proper treatment in national income and product accounts (and in their subdivisions).
    Write a comprehensive essay on this subject. Include in it, but do not limit yourself to, the following points:

    1. The principles and procedures followed by the U. S. Department of Commerce
    2. Alternative methods which might be followed and the reasons for them
    3. Special problems created by the presence of governmental activities
    4. The Marxist position on this subject
  2. Write an essay on the subject of “Economic Effects of an Increase in the Stock of Money.” Indicate the position taken by several important economists familiar to you.
  3. Explain the investment criteria which should be used by:
    1. A private American enterprise
    2. U. S. government
    3. A Planning Board of some under-developed country.

Emphasize the differences in criteria to be used and the reasons for the differences.

PART II

A short well-organized answer is best.

  1. Formalize the following assumptions into a model:
    1. Current consumption is proportional to last year’s national income;
    2. Current investment is proportional to last year’s profits;
    3. Current profits are an increasing linear function of current national income and the change in national income since last year;
    4. National income is the sum of consumption and investment.

Will the model generate cycles if disturbed, for plausible values of the parameters? (Assume that, other things equal, 40% of a year-to-year increase in national income flows into profits.)

Describe how the response of the model economy would be affected by the imposition of a proportional income tax (with consumption proportional to disposable income).

Same for a proportional profits tax, with investment proportional to after tax profits.

Compare the stabilization effects of the two, if the profits tax is levied so as to raise the same amount of revenue as the income tax at a constant level of national income.

  1. Following is the text of a letter from James Tobin.

“Following is the text of a letter from Joan Robinson:

‘Many thanks for sending me the offprint from Econometrica (Money and Growth). Your Keynesian long-period theory is very different from mine and Kaldor’s. I should say that a lower rate of interest will make the rate of profit higher. The rate of profit r = g/sp, i.e. is equal to the rate of growth divided by the proportion of profit saved. I should say that, within reason, and provided that an appropriate part of investment is in research and training, a higher rate of investment will generate a higher natural rate of growth, so that deepening need not occur.’

Does this make sense?”

Answer Professor Tobin’s question. (The “rate of interest” refers, say, to the rate on government bonds, the only asset apart from real capital. The “rate of profit” can be taken to be the marginal product of capital in a one-sector economy near a steady state.)

Compare the behavior of output per man or per man-hour in the short-run (i.e. in the course of economic fluctuations) and in the long run, for the economy as a whole. Comment on any analytical issues raised by the behavior.

________________________

February, 1968
GENERAL EXAMINATION IN ECONOMIC THEORY
MACROECONOMICS—TWO HOURS
[Note: recycled exam from February, 1964]

Answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write a comprehensive essay on the subject of “Comparisons of National Income and Product in Time and Space.” Indicate the biases which arise in such comparisons.
  2. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Indicate what definition of money used in your discussion.
  3. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.

Part II

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity.” Comment fully.
  2. “If Hansen is correct, the faster is the rate of growth of population, the lower will be the unemployment level in the U.S.” Discuss fully. Include natural growth of population and immigration. In what respect does the growth of population differ from that of the stock of capital?
  3. Write an essay on “Floors and Ceilings in Business Cycle Theory.” Indicate the specific theories and your methods of testing each.

[handwritten note: “special exam… She received good-/fair+ with charity]

________________________

14.452
FINAL EXAMINATION
May 23, 1968

Please answer each question in a separate examination booklet. Indicate on the front page of each booklet whether you are seeking only a grade in 14.452 or a grade in the general examination in economic theory. Those who seek only a grade in 14.452 should answer two questions in part I and two questions in Part II. Those who are taking the general examination in economic theory should answer two questions in Part II and two in Part III.

Part I

  1. Construct a difference-equation model embodying the following assumptions:
    1. Consumption is a linear function of disposable income lagged one time-unit;
    2. Tax revenue is proportional to national product;
    3. Investment is the sum of a component proportional to the current change in consumption and a component proportional to national product lagged one tie-unit;
    4. Imports are proportional to national product lagged one time-unit;
    5. Government purchases are constant.

Write down formally the conditions for an oscillatory response of the model to disturbance. When are the oscillations damped? How do variations in the tax rate affect these conditions? Suppose part of government purchases were made negatively proportional to the last observed change in national product?

  1. Why is technical progress an important part of the usual model of economic growth? Could increasing returns to scale play the same role? What is the special role of purely labor-augmenting (i.e. Harrod-neutral) technical progress?
  2. Imagine a planned economy choosing among steady states in the one-sector model, without technical progress. The planner values both consumption per head and capital per head (as a measure of national strength, say) and his preferences can be expressed by a system of conventionally-shaped indifference curves in consumption per head and capital per head.

Use this indifference map and the requirements for a steady state to show how the optimal steady state is chosen. Prove that the optimal capital per head will exceed the “Golden-Rule” (maximal consumption per head) level. Show what happens to the optimal position if the rate of population growth increases. Discuss briefly the case of a one-time upward shift in the production function.

Part II

  1. In the generalized multiplier-accelerator model, the equation \frac{dK}{dt}=I\left( Y,K \right) means that “investment decisions are always carried out”, so that when

I\left( Y,K \right)\begin{matrix} > \\ < \\ \end{matrix}S\left( Y \right)

“unintended consumption or saving” occurs. Replace the above equation with \frac{dK}{dt}=S\left( Y \right) and interpret and analyze the resulting model. Compare its behavior with the case analyzed in class.

  1. Suppose I = I(Y,K) and S = S(Y) are the schedules of desired investment and saving. In what sense is I–S a measure of excess demand in the aggregate commodity market?

How is it that no specific supply variables (labor force, for example) appear in this measure? Under what circumstances is it natural to suppose that dY/dt responds to (I–S)? (Y = real output, p = commodity price level). Under what circumstances is it natural to suppose that dp/dt responds to (I–S)?

  1. Consider a one-sector non-monetary model of growth under the following assumptions:
    1. The production function in intensive form is q = Akb;
    2. The wage is equal to the marginal product of labor;
    3. Investment demand is such that the after-tax return on capital is always at a target level r*;
    4. There is a tax on profits at rate t and the government spends all its revenue on consumption;
    5. The savings rates from wages and after-tax profits are both equal to a constant s.

Find the tax rate that will permit a steady state at full employment. When will it be between zero and one? How does it change if s changes? Interpret.

  1. Consider a one-sector growth model, with two factors of production (capital and labor), constant returns to scale, and no technical progress. Suppose that the propensity to save out of profits and capital gains is equal to one, and the propensity to save out of wages and transfer payments (taxes = negative transfers) is zero.

Money, which is non-interest-bearing government debt, is the only alternative asset to capital. The desired money-capital ratio is of the form \frac{m}{k}=L\left( {f}'\left( k \right)+{{\left( {{\dot{p}}}/{p}\; \right)}^{e}} \right) where m is the real per capita stock of money, k is the capital-labor ratio, and  {{\left( {{\dot{p}}}/{p}\; \right)}^{e}}is the expected rate of inflation which is equal to the actual rate {{\dot{p}}}/{p}\; in the steady state.

Government purchases are zero and the budget deficit, which is equal to the excess of transfers over taxes, is financed by issuing money.

    1. Describe the steady-state characteristics of the model.
    2. Find the rate of inflation that maximizes steady-state consumption per head.
    3. Suppose that {{\left( {{\dot{p}}}/{p}\; \right)}_{o}} is the rate of inflation in (b) that maximizes steady state consumption per head. Would a higher rate of inflation lead to a higher or lower long-run capital-labor ratio?

Part III

  1. Write a comprehensive essay on the subject of “The Problem of Weights in National Income and Index-Number Construction”.
    Explain the criteria which are used, should be used (for what purpose?) and why.
  2. Discuss the economic effects of an increase in the stock of money. Include an evaluation of the positions of several (not less than two) prominent economists familiar to you. How would you test the correctness of their positions?
  3. Discuss the effects of inflation of the level of real investment.

________________________

 

GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two hours
Sept. 1968

Answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I

  1. “Existing methods of national product computation exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of underdeveloped countries.”
    Comment fully.
  2. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.
  3. Write an essay on the subject of “The Economic Effects of a Redistribution of Income from the Upper to the Lower Income Groups.”
    Include in your essay the evaluation of several current theories on the subject.
    Consider as many economic effects as you can.

PART II.

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than the growth of its labor productivity.”
    Comment fully.
  2. Consider the effects of technological progress on employment of labor. Be as comprehensive as you can.
  3. What are the built-in stabilizers and how do they work? Can we rely on them to achieve price stability and full employment?
    Discuss the subject fully.

________________________

 

Spring, 1969
GENERAL EXAMINATION IN MACROECONOMICS
Three Hours

Please answer FOUR QUESTIONS distributed as follows:

Part I—without choice—1 hour
Part II—any two questions—40 minutes each
Part III—any one question—50 minutes

Use a separate examination book for each question.

PART I

The Federal Government wishes to stop the current inflation of the aggregate price level. What are the issues in choosing among various fiscal and monetary policies directed to this end? Try to use macroeconomic models (expressed algebraically, graphically or verbally) to illustrate the problems involved.

PART II

  1. Write an essay indicating what you think are the most important ideas about the determination of the rate of investment in economic theory and in economic practice. (Suppose the problem came up in the course of presenting the static Keynesian macroeconomic model of income determination.)
  2. In the two-asset neo-classical growth model à la Tobin or Sidrauski we have two basic equations:
    1. \dot{k}=sf\left( k \right)-nk-\left( 1-s \right)\left[ \dot{m}+nm+{{\pi }_{m}}m \right]{{p}_{m}}
    2. {{p}_{m}}m=L\left[ {{p}_{m}}m+k,{{\pi }_{m}},{f}'\left( k \right),f\left( k \right) \right]

Suppose we add the requirement that

    1. {{\dot{p}}_{m}}=\pi _{m}^{*}{{p}_{m}}, that is that the government always vary its deficit to produce a constant rate of deflation \pi _{m}^{*} (which would, of course, be an inflation if .) \pi _{m}^{*}<0

 

    1. Show that this model can be expressed by the two equations

1a) \dot{k}=\frac{sf\left( k \right)-nk-\left( 1-s \right)n\left( {{p}_{m}}m \right)}{\left[ 1+\left( 1-s \right)C \right]}

where C={\left[ {{L}_{1}}+{{L}_{3}}{f}''+{{L}_{4}}{f}' \right]}/{\left( 1-{{L}_{1}} \right)}\;>0

2a) {{p}_{m}}m=L\left( {{p}_{m}}m+k,{{w}_{m}},{f}'\left( k \right),f\left( k \right) \right)

Why are the pairs of k and (pmm) which make \dot{k}=0 the same regardless of \pi _{m}^{*}? HINT: When \dot{k}=0 what is the increase in the per capita real money supply? What determines the increase in the total real money supply?

    1. Show the dynamics of this system graphically by sketching the combinations of (pmm) and k that make \dot{k}=0 and those that satisfy 2a) (the aa schedule). What is the effect of a higher {{\pi }_{m}} on the stable steady-state stock of capital?
    2. Under what conditions can the government force the economy to the golden-rule capital stock by enforcing an appropriate \pi _{m}^{*} through fiscal policy without changing s (assume that pmm must always be positive for any \pi _{m}^{*})?
  1. Consider a vintage growth model with fixed factor proportions (clay-clay) a constant labor force (n=0), and Hicks neutral technical change at rate γ. Suppose the economy in question invests every year in a given fixed quantity of new machines (not a constant fraction of income), and has always followed this policy. Assume perfect competition, and full employment.
    1. Write down the production function for a given vintage. What rates labor and capital-augmenting technical change are implied?
    2. What is the labor requirement per machine of vintage τ?
    3. Find the economic life time of capital.
    4. Describe the growth paths of output, wages, quasi-rents and the labor share of income.
    5. Suppose the economy suddenly doubles its investment and then holds it constant. What will happen to wages and the life-time of capital as time passes?
  2. What growth model or growth model ideas would be helpful in studying the effects of a redistribution of income from businessmen to workers on investment and/or growth? You may develop a model explicitly or simply write an essay reviewing the important concepts and their relevance to the question.

PART III

  1. You are asked to compare the per capita national income of some underdeveloped country, such as Brazil, with that of the United States. Assume that the Brazilian currency (a) is convertible into dollars and (b) that it is not convertible.
    Discuss as thoroughly as you can the problems involved in this comparison and the methods used for dealing with them. Evaluate these methods critically and present and justify your own recommendations.
  2. Explain what is meant by “The Money Illusion” and what role does its presence and absence play in theories of employment, interest and prices. Be as comprehensive and as critical as you can.

 

General Examination Grades in Macroeconomics
Spring 1969

Spring 1969
90 = perfect
[1] 83 Ex+
[2] 79 Ex
[3] 78
[4] 77
[5] 75 Ex-
[6] 75
[7] 75
[8] 74 Ex-/G+
[9] 74
[10] 73 G+
[11] 72
[12] 72
[13] 71
[14] 71
[15] 71
[16] 70 G+/G
[17] 70
[18] 69 G
[19] 69
[20] 69
[21] 69
[22] 69
[23] 68
[24] 67
[25] 67
[26] 67
[27] 66
[28] 66
[29] 66
[30] 65 G/G-
[31] 65
[32] 64 G-
[33] 64
[34] 62
[35] 61
[36] 57 F+
[37] 56
[38] 53 F
[39] 50 ?
[40] 49
[41] 48

________________________

MACRO GENERAL
February 3, 1971

DO THREE QUESTIONS, AT LEAST ONE FROM A AND ONE FROM B. 40 Minutes each

A

  1. There has been a long-standing dispute among economists whether money is or is not neutral. Explain what this dispute is about, what the major positions are, and present and justify your own position on the subject.
  2. In order to stimulate investment expenditures by business, President Nixon has suggested a more accelerated treatment of depreciation for income tax purposes. For simplicity assume that every depreciable capital asset can be written off for tax purposes in half the usual time. Analyze the proposal and state and justify your conclusions.
  3. The Bergson Index may be defined as the ratio of Soviet output (industrial production or GNP or a similar measure) to Soviet inputs (labor and capital) divided by a similar ratio for the U.S., first in Soviet and then in American prices for some given year. On finding that this Index is less than one, Bergson has concluded that the Soviet economy is less efficient than the American.
    1. Which comparison (that is, in Soviet or in American prices) is more likely to be more favorable for the USSR? Why? (This is the less important part).
    2. Evaluate critically Bergson’s conclusions. (This is the more important part).

B

  1. Use a simple macroeconomic model that describes the interaction of the real and financial sectors to describe a theory of determination of the price level. Is simultaneous unemployment and inflation consistent with this theory? What parts of the theory would you modify to take account of simultaneous unemployment and inflation?
  2. Define the “golden rule” growth path and derive conditions for an economy to be on it. Compare some actual economy’s performance to the golden rule and, if you can, estimate the saving necessary to reach it. Would you favor such a policy?
  3. Consumer spending in the U.S. is currently in a slump. What hypotheses can you advance to explain this fact?

 

________________________

 

GENERAL EXAMINATION IN MACROECONOMICS
June 24, 1971
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question. Write your CODE NUMBER on your book but not your name.

PART I

  1. In a recent speech, Simon Kuznets suggested the following method for expressing the relative rate of growth of real national income of a country: calculate the relative rate of growth of real income of each person (or family) and then take the unweighted arithmetic mean of these rates. Let us call the resulting rate
    1. Compare the rationale behind Kuznets’ suggestion with that of the conventional computation of the rate of growth.
    2. For what purposes would you use each method? Why?
    3. Suggest other ways for achieving Kuznets’ objective.
    4. How would the magnitude of K compare with that of the conventional rate?

(Note: do not worry about the distinction between national income and gross product.)

  1. Write an essay on the subject of “Economic Effects of the Retardation of Population Growth in the U.S.” (You may choose a comprehensive approach or concentrate on some issues you regard particularly important and interesting.
  2. Analyze the effects on aggregate demand and supply, both in the short and in the long run, of a prolonged strike in some important industry. Consider several relevant cases.

PART II

  1. When the current Republican administration came into office it faced substantial and rising rates of inflation, and inherited from the last Democratic administration a moderately restrictive fiscal policy. Write a memo to the President outlining his macroeconomic policy options with pros and cons for each. (Would you list different options if you were Paul Samuelson rather than Milton Friedman?)
  2. Use some complete macroeconomic model to discuss the ways monetary policy influences aggregate demand. Try to judge which mechanisms are likely to be strong and reliable, which weak and uncertain.
  3. Capitalia is a two-class society in which land is not a constraint, workers save and capitalists invest. Its population growth rate is 1%. Nothing has ever happened in Capitalia except exponential growth.
    1. What is the rate of return to capital?
    2. Does the production function make any difference to your answer in part a)? Explain.
    3. If the production function is Cobb-Douglas with capital exponent .2, find the capital per head, output per head, and consumption per head.
    4. In an unexpected development, population growth doubles. What begins to happen to the rate of return, per capita saving, and the saving as a fraction of output?
    5. The government decides to maintain earlier levels of per capita saving “to avoid the impoverishment of our nation” by taxing workers. Comment on this policy. What will per capita consumption be under this policy?

________________________

Source: Duke University. Rubenstein Library. Evsey Domar Papers, Box 16, Folder “Ph.D. Economic Examinations. Macroeconomics.”

Image Source: “From the Flying Car to the Giant R2-D2: The Greates MIT Hacks of All-Time“, by Robert McMillan. Wired, March 20, 2013.

“Boston’s Harvard Bridge is 364.4 Smoots long. And the fact that anybody would remember this in 2013 was probably the furthest thing from MIT freshman Oliver Smoot’s mind on the October 1958 night that he lay himself down, time and again, along the bridge, allowing his fraternity brothers to measure its length (each Smoot is about 5 feet, 7 inches). It was a fraternity prank, but the next year the bridge’s Smoot markers were repainted. Thus, an MIT landmark — and a unique unit of measurement — was born.

Smoot himself went on to become a board member of the American National Standards Institute — a standards man through and through.”

 

Categories
Carnegie Institute of Technology Chicago Economists Harvard Johns Hopkins M.I.T. Michigan

Harvard. Evsey Domar’s Ph.D. Thesis story. 1947

_______________________________

This post is the second in the series dedicated to the economists who trained me (the first post about John Michael Montias is here). In the Evsey Domar papers archived at Duke University I found the following two-page, undated typed note about my Doktorvater’s own experience with his dissertation. Let us just say that his thesis committee fell rather short of any reasonable standard of due diligence. 

_______________________________

 

M.I.T. Obituary

Professor Emeritus of Economics Evsey D. Domar died on April 1 [1997] in Emerson Hospital in Concord. He was 82.

Domar came to MIT in 1957 as a visiting professor from Johns Hopkins University; he received tenure a year later. In 1972, Domar became one of seven professors endowed by the Ford Foundation. He retired in 1984.

Among Domar’s pupils in macroeconomics was Robert William Fogel, winner of the 1993 Nobel Memorial Prize in Economics.

Domar was an expert on Soviet economics during the Cold War and an early proponent of Keynesian economic theory.

In recent years, Domar remained politically active in his field. Along with 1,100 other economists, he signed an Economic Policy Institute statement opposing the proposed balanced budget amendment.

Domar served as a consultant for the RAND Corp., the Ford Foundation, the Brookings Institution, the National Science Foundation, the Batelle Memorial Institute, and the Institute for Defense Analysis.

Domar was born in Lodz, Poland in 1914. He was raised in Manchuria and emigrated to the United States in 1936.

He received his bachelor of arts from UCLA in 1939, a master of science from University of Michigan in 1940, another MS from Harvard University in 1943, and his doctorate from Harvard in 1947.

Before coming to MIT, Domar taught at the Carnegie Institute of Technology, the University of Chicago, and Johns Hopkins.

Domar was a fellow of the American Academy of Arts and Sciences, the Econometric Society, and the Center for Advanced Study in the Behavioral Sciences.

He was on the executive committee of the American Economic Association from 1964—65, and became the organization’s vice president in 1970, when he was also president of the Association for Comparative Economics.

Domar is survived by his wife, Carola, of Concord, two daughters, Alice D. Domar, of Sudbury, and Erica D. Banderob, of Milton, and three granddaughters.

Source: MIT, The Tech, Vol. 117, No. 19 Tuesday, April 15, 1997.

Image Source: Joshua Domashevitsky (Evsey Domar). 1939 UCLA Yearbook Southern Campus portrait.

_______________________________

 

THE STORY OF MY THESIS

When I entered graduate school I knew that someday I would have to write a thesis but I did not have the slightest idea what it would be on. Once, browsing in the Harper Library at the University of Chicago I stumbled into Bronfennbrenner’s thesis. Its mathematics was overwhelming. I was in a panic: surely I would never be able to write anything like it.

Originally, I was supposed to write a thesis on post-war taxation, but as time went on I was finding the subject less and less interesting. In the meantime, I began to publish papers on growth models. Harvard rules permit the submission of several related articles instead of one book-like study. It took me several years to accumulate four papers, of which three, I believe, had been published. (A full time job, whether at the Federal Reserve or in teaching is not the best environment to write a dissertation.) Finally, the last paper was finished and all four were sent to Hansen at Harvard.

I needed the degree very badly. I was very unhappy at Carnegie Tech and anxious to find another job. Prospective employers appeared to lose all interest when informed that I had not yet received my degree. So in the letter accompanying the thesis I besieged (sic) Hansen to render his decision as soon as possible.

Weeks went by with no word from him. Finally I called him on the phone. (In those days long-distance phone calls were regarded as an exotic luxury particularly for an underpaid assistant professor.) “Thesis,” said he, in his gruff voice, “what thesis?” I explained. “Wait a moment, let me find it.” I heard the sound of an envelope torn open. “Fine,” he said, “Fine. Send it in.” And that was all the supervision I was to get.

When I arrived in Cambridge a day before my final examination, I noticed that the secretary of another member of the committee was just bringing my thesis to him. (She tried to hide it behind her back.) At least he had one day to take a look at it.

Schumpeter, who was the third member, never bothered to look at it at all. He invited me to lunch, and said: “You are coming up tomorrow, aren’t you? What shall we talk about?” I told him what I was working on. “Fine,” he said. When the committee met he turned to Hansen, the chairman: “Instead of talking about the thesis, why don’t we ask the candidate to tell us about his current work.” His suggestion was accepted at once, I thought, even with a sense of relief: as I was to find out repeatedly in my time, doctoral examinations can be quite boring for the examiners. And that was my doctoral examination.

Were our teachers guilty of neglect or were they sufficiently brave to pay no attention to rules? Would we have the courage to disregard them under similar circumstances?

 

Source:   Duke University, Rubenstein Library. Evsey Domar Papers. Box 18, Folder “Miscellaneous: Biographical “The Story of My Thesis.”

Categories
Columbia Economic History Economists Yale

Columbia Economics Ph.D. alumnus. John M. Montias, 1958

The history of economics would be duller fare should we fail to add a portion of ancestor worship as seasoning. Since my motto is “Economists are not born but they are made” and that for well over a century economists have been made in graduate schools, I would be remiss in not using Economics in the Rear-View Mirror to erect shrines from time to time to those economists who trained me.

During the academic year 1973-74 while an undergraduate at Yale, I took a graduate course taught by John Michael Montias on comparative economic systems.  Having been born in Paris, he volunteered out of interest in the topic to be the second reader of my senior essay about French mercantilism and the Physiocrats. I recall him as a thoughtful scholar and a kind man. He was one of four professors (the others were Raymond Powell, Abram Bergson and Evsey Domar) who in different courses valiantly tried to teach me the lessons of Richard H. Moorsteen’s article “On Measuring Productive Potential and Relative Efficiency” Quarterly Journal of Economics (1961) 75 (3): 451-467. The teaching efforts of Montias et al. did ignite in me a long professional interest in the economic theory of index numbers though I do not recall them exactly cracking the code in class for us. Montias’ own ambition was less on the bean-counting side of empirical comparative economics as on the theoretical side in pursuit of a formal systematization of a “macro”-institutional economics. We began his course by reading his essay co-authored with Tjalling Koopmans published in Comparison of Economic Systems: Theoretical and Methodological Approaches, Alexander Eckstein (ed.), Berkeley: University of California Press, 1971. I believe we can all agree that economic outcomes depend jointly on the economic environment, economic system and economic policies within the system. I also believe that the last sentence reads no better when expressed in mathematical notation. 

John Michael Montias’ greatest hits in economics were to appear after I had moved on. He had a passion for Dutch and Flemish art that led to seminal contributions in the history of 17th century Dutch art markets. Tulip bubbles are cool, but I’d say Vermeer is hot.

P.S.  Fun Fact: The U.S. Embassy official in Hungary who had to deal with Montias’ expulsion from Hungary in the early 1960’s, Edward Alexander, was in charge of the Press and Culture department of the U.S. Embassy in East Berlin during my  seven month IREX stay in 1978. There I fell in love and became engaged to an economist at the Central Institute of Economics in the GDR Academy of Sciences. Until my East German fiancée (Kerstin Rüdiger) was allowed to leave East Germany at the end of 1979 (and perhaps afterwards too), Edward Alexander had to deal with any diplomatic fall-out from our case.

_____________________________

 

From the 1989 Survey of AEA Members

Montias, John M.

Fields: 050, 110
Birth Yr: 1928
Degrees: B.A., Columbia U., 1947; M.A., Columbia U., 1950; Ph.D., Columbia U., 1958
Prin. Cur. Position: Prof. of Econs. Yale U., 1964
Concurrent/Past Positions: Assoc. Prof., Yale U., 1963-64; Asst. Prof., Yale U., 1958-63.
Research:  Economic systems

Source: American Economic Association. Biographical Listing of Members, American Economic Review, Vol. 79, No. 6, (Dec. 1989) p. 334.

_____________________________

New York Times obituary

John Montias, 76, Scholar of Economics and of Art, Is Dead
By KATHRYN SHATTUCKAUG. 1, 2005

John Michael Montias, an economist who became one of the foremost scholars on the painter Johannes Vermeer and a pioneer in the economics of art, died on Tuesday at a hospice in Branford, Conn. He was 76 and lived in New Haven.

The cause was complications from melanoma, said his son, John-Luke Montias.

Part of the Annales school of economists and historians, Mr. Montias was among those who, in the early and mid-20th century, promoted a new form of history by replacing the examination of major leaders and events with the microstudy of ordinary people and occurrences.

Through the scrupulous analysis of common documents ranging from notes and letters to receipts and legal papers, Mr. Montias peeled back the layers in the life of Vermeer, one of his favorite artists — and one of the world’s most enigmatic. His work opened the door for a new genre of art history in which artists were analyzed in the context of their societal and economic surroundings and not merely their works.

“I think he was important for all of us,” said Egbert Haverkamp-Begemann, the John Langeloth Loeb professor emeritus at New York University’s Institute of Fine Arts. “When he started this in the 1960’s and 70’s, there was no one who approached the history of art from that point of view. His work was pioneering — accurate, extremely convincing, with many novel insights. What was not considered to be relevant to the work of art in the past, we all have subsequently used.”

Mr. Montias’s research was a primary source for Tracy Chevalier’s 2000 novel “Girl With a Pearl Earring,” about Vermeer’s relationship with the model for his iconic work, and for the 2003 film adaptation.

Mr. Montias began teaching at Yale University in the late 50’s, where he specialized in the economic systems of the Soviet bloc during the 1960’s and 70’s and served as a consultant to high-ranking government officials. His analysis of the economies of Eastern European countries at times drew suspicion, perhaps never more so than during his visits to Czechoslovakia and Hungary from 1963 to 1965; he was shadowed and eventually expelled from Hungary on suspicion of espionage. But if his work was economics, his passion was art, particularly that of the 16th- and 17th-century Netherlands.

“I came to Vermeer ‘sideways,”‘ he said in a 2003 interview for the Essential Vermeer Web site (www.essentialvermeer.20m.com), explaining the genesis of his second career. Having won a summer grant in 1975 to write a comparative study of Dutch art guilds, he traveled to Delft, where he discovered that no in-depth study of a guild existed.

“In the course of this research, I realized that, contrary to my expectations, previous scholarship on Vermeer’s life had not exhausted the subject,” he said.

And so began his quest to uncover the life of one of the world’s most mysterious artists, with Mr. Montias unearthing and poring over 454 documents related to Vermeer and his family that lay, long undisturbed, in the archives of no fewer than 17 Dutch and Belgian cities.

In 1989 he published “Vermeer and His Milieu: A Web of Social History” (Princeton University Press), in which he revealed secrets of Vermeer’s life: that Vermeer’s grandfather was a convicted counterfeiter; that his grandmother ran illegal lotteries; and that the artist himself fathered 13 children and died at the age of 43, destitute.

Reviewing the book in The New York Times, the art critic John Russell wrote that Mr. Montias had previously “proved that there is a great deal more to art history than shuffling slides in a library.”

“His new book does not crack the code of Vermeer’s personality, let alone the code of his inner experience,” the review continued. “But as detective work, and as a portrait of an era, it ranks high.”

In fact, Mr. Montias’s midlife obsession had adolescent roots. Born on Oct. 3, 1928, in Paris, he was sent in 1940, alone and by ship, by his Jewish parents to the safety of the United States — and an Episcopalian baptism — just as the Germans were preparing to invade France. He boarded at the Nichols School in Buffalo, where as a 14-year-old volunteer in the small library of the Albright-Knox Art Gallery, he came across Wilhelm Bode’s gilt-edged folio volume of Rembrandt and was immediately captivated.

Mr. Montias’s curiosity resurfaced in 1954 when, as a Ph.D. candidate in the economics department at Columbia University, he considered writing his dissertation on the prices of Dutch paintings at auction. He failed to get financial support for his project, perhaps thought frivolous during the cold war.

Things changed when Mr. Montias met Mr. Begemann in the mid-1960’s, when they were both at Yale. A specialist in Dutch and Flemish art, Mr. Begemann gave Mr. Montias his first lessons in connoisseurship, and soon after he began to study the genre’s history methodically. His first project in the field — the 1975 summer grant — required Mr. Montias, already a gifted linguist, not only to learn modern Dutch but also to read 17th-century manuscript sources in old Gothic script.

“He decided to attack the archives in Delft, knowing that they had been scoured for information on Vermeer,” recalled Otto Naumann, a Manhattan art dealer who studied under Mr. Montias. “With the confidence that only a true genius can posses, he decided that he could do better, without first learning Dutch.”

It took Mr. Montias one week to find an unpublished document that mentioned Vermeer and but another to decipher it, Mr. Naumann said.

Mr. Montias published three more books about the 17th-century Dutch art market: “Artists, Dealers, Consumers: On the Social World of Art” (Hilversum: Verloren, 1994); “Public and Private Spaces: Works of Art in 17th-Century Dutch Houses” (Zwolle, 2000), with John Loughman; and “Art at Auction in 17th-Century Amsterdam” (Amsterdam University Press, 2003).

In addition to his son, of Manhattan, he is survived by his wife, Marie, of New Haven, and his mother, Giselle de la Maisoneuve, of Paris.

____________________________

Yale Bulletin & Calendar obituary

Yale Bulletin & Calendar. September 2, 2005. Vol. 34, Number 2.

John-Michael Montias, economist and expert on Vermeer

John-Michael Montias, one of the world’s foremost scholars on the life of 17th-century Dutch artist Johannes Vermeer and professor emeritus of economics at Yale, died July 26 of complications from melanoma. He was 76.

Montias, who joined the Yale faculty in the late 1950s, was a specialist in the economic systems of the Soviet bloc. He researched the economies of many Eastern European countries during the 1960s and 1970s. During the Cold War, he served as a consultant to some of the highest officials of the U.S. government. His publications from that period include “Central Planning in Poland” and “The Structure of Economic Systems,” both published by the Yale University Press.

Although his academic work was in the field of economics, Montias’ passion was art, specifically 16th- and 17th-century Dutch painting. While on a fellowship at the Netherlands Institute for Advanced Social Studies in 1978, he combined the two interests by writing a comparative study of Dutch art guilds during the 16th century, poring over 16th- and 17th-century archival records in the process of teaching himself gothic Dutch. The result was his 1982 book “Artists and Artisans in Delft, a Study of the 17th Century.”

During the course of his research, Montias was surprised to learn that the scholarship on one of his favorite artists, Vermeer, was far from exhausted. He began a quest to uncover the life of the artist, considered one of the most enigmatic and mysterious. In 1989 he published the critically acclaimed “Vermeer and His Milieu: A Web of Social History.” In this book, Montias traced the artist’s life through notary records, discovering that Vermeer’s grandfather was a convicted counterfeiter; that his grandmother ran illegal lotteries; and that the artist himself fathered 13 children and died at the age of 43, completely destitute. Today, it is estimated that there are only about 35 Vermeer paintings still in existence, and the most recent work sold at auction was purchased for $26 million in London last July.

Montias published three more books about the 17th-century Dutch art market: “Artists, Dealers and Consumers: The World of Social Art” (1994), “Public and Private Spaces: Works of Art in 17th-Century Dutch Houses” (2000) and “Art at Auction in 17th-Century Amsterdam” (2002).

Born Oct. 3, 1928 in Paris, France, Montias came to the United States when he was 12. At 16 he matriculated as an undergraduate at Columbia University. After serving in the Army during the Korean War, he returned to Columbia, earning both his M.A. and Ph.D. in economics. He was awarded a Guggenheim Fellowship in 1961.

Montias is survived by his wife, Marie, of New Haven; his mother, Giselle de la Maisoneuve, of Paris, France; and his son John-Luke, and his fiancé, Samantha, both of New York City.

The Yale economist was buried in Grove Street Cemetery.

 

Image Source: Montias as Guggenheim Fellow (1961) John Simon Guggenheim Memorial Foundation. Detail from “Montias at the launching party at Amsterdam University Press of his book Art at auction in 17th-century Amsterdam, 10 September 2002 (Photo: Gary Schwartz)“

Categories
Economic History Exam Questions M.I.T.

MIT. Final Examinations for European Economic History. Kindleberger, 1970/74

The M.I.T. graduate economics program of my day (mid-1970s) still offered three courses in economic history: Peter Temin‘s American Economic History, Evsey Domar‘s Russian Economic History and Charles Kindleberger‘s European Economic History. I will confess here that little value-added from his lectures has survived the intervening decades for me  (I did read plenty!). That said, my personal take-away from Kindleberger’s class was that he represented the ideal balance of scholar-gentleman-economist. I suspect he felt as much a dinosaur when he taught us in the mid-1970s as I certainly do now when I eavesdrop on the conversation of graduate students when they mimic their elders, who are now sometimes a full generation younger than me. 

I posted a few of his favorite stories from his days at Columbia University. Here an outline biography of Charles Kindleberger at the MIT economics department.

__________________________

December 12, 1974
8:30-10:30

Informal Final Examination
14.733
European Economic History

 

Answer any three questions (forty minutes each), but be certain that not all your answers refer exclusively to Great Britain or the Continent of Europe.

 

  1. It was said that the Holy Roman Empire was neither Holy, Roman nor an Empire.
    to what extent was the Industrial Revolution a) Industrial? b) a Revolution?
    Explain at some length, and indicate which Industrial Revolution, if there are more than one, you are referring to.
  1. Compare and contrast one pair, at least twenty-five years apart, from the following list:
    1. financial crises in Europe
    2. economic booms
    3. recoveries from war
    4. reparation transfers
  1. Evaluate the role of tariff policy in the economic growth or the economic development of one or more countries of Europe over some period of time which you specify.
  1. Compare the profiles of economic development over the nineteenth century of one of the pairs of countries below, and account for the major differences:
    1. Netherlands — Britain
    2. Britain — Germany
    3. France — Germany
    4. Italy — other country of your choice

__________________________

14.733 FINAL EXAMINATION
December 23, 1970 9AM
Three hours

 

Answer any four questions […illegible…] but at least one from each group.

 

Group I

  1. Describe the course and causes of the Industrial revolution in one country in Europe.
  2. Compare and contrast Rostow’s Stages and Gerschenkron’s discontinuity in economic growth, illustrating your answer with material from European history.
  3. Discuss the role in the early industrialization of one country of Europe of a) labor; b) capital; or c) technology.

 

Group II

  1. To what do you ascribe the business cycle in the 19th century Europe? Explain.
  2. Argue for or against the advantage of backwardness and the penalty of the head start, illustrating your argument with 19th century economic data from Europe.
  3. How do you account for the limited movement toward free trade in Europe after 1869. what did it accomplish, and why did it end?

 

Group III

  1. Did Europe grow rich on imperialistic exploitation of the rest of the world in the last quarter of the 19th century? Support your answer fully.
  2. Compare German recoveries after World War I and after World War II.
  3. Discuss the role of Europe in the 1929 depression.
  4. Compare and contrast the role of London in world finance before and after 1913.

 

Source: Personal copies of Irwin Collier.

 

Categories
Economists M.I.T.

MIT. Suggestions for New Fields. Domar, Kuh, Solow, Adelman, 1967

The following set of memoranda from the MIT economics department is found in a folder marked “Correspondence: Peter Temin” in Evsey Domar’s papers. The bulk of the material in the folder are letters of support that Domar solicited for the committee he chaired (which consisted of Domar, Charles Kindleberger and Frank Fisher) to review Peter Temin for tenure. It thus appears that Domar’s proposal to strengthen economic history at MIT in February 1967 was seen (at least by him) to have led later to granting Peter Temin tenure at MIT. See Peter Temin’s reflections on “The Rise and Fall of Economic History at MIT.”

In response to a request by the Head of the department, E. Cary Brown, for input to a long-range plan (1967-1975), we have here not only Evsey Domar’s response but also memos from Edwin Kuh (more econometrics!), Robert Solow (“poverty-manpower” or “a really high-class macro-numbers man”) and M. A. Adelman (energy economics).

Even Robert Solow’s intradepartmental memos sparkle with wit!

_________________________________

February 7, 1967

MEMORANDUM

 

To: Members of the Economics Department
From: E. Cary Brown
Subject: Long-Range Departmental Plans

President H. Johnson has asked that Departments submit long-range plans – by two-year intervals through the academic year 1974-5. The basic constraints, other than budgetary, are that the undergraduate student body is to remain fixed at its present level and that graduate students at M.I.T. Grow at only a 3% rate per year. The projection desired is of the expansion in existing fields, into new fields, the population of the department – faculty, staff, students, post-doctorals, and administration and supporting staff.

In order to get a dialogue started, I suggest that each of you send me a note on the need for new fields, the expansion of existing ones, and your views about our undergraduate and graduate size. I can then prepare an agenda for a meeting or two on this matter.

_________________________________

 

[Evsey Domar response]

  1. New Fields, etc.
    1. Economic History. Could tie in very well with our economic developers. Also help to create a better balance in the Department.
    2. Economics and Technology (Mansfield, etc.) MIT should be just the place for it.
    3. I hope Max continues to be interested in South-East Asia. The US will be involved there for a long time. Any chances for a South-east. Asia Center or something?
  2. Number of Students
    No strong feelings. A larger number of both faculty and students allows us to offer a greater variety of courses.

As you know, Economic History is my main concern.

_________________________________

 

[Edwin Kuh response]

February 13, 1967

MEMORANDUM

TO:                 Professor E. Cary Brown
FROM:          Professor Edwin Kuh
SUBJECT:     Some Economics Department Needs in the Long Run

Let me first grind my own econometric axe. We need additional support in two econometric areas. The first pertains to support for quantitative theses; Frank Fisher, Bob Solow and I carry a heavy load in this connection, which is unlikely to diminish. Second, we ought to have more strength than we do in econometric time series analysis, an important topic not covered by existing faculty. Marc Nerlove, for instance, ranks high on both counts. Less senior individuals include David Grether who combines both aspects (Stanford Ph.D. going to Yale this fall) and possibly Joseph Kadane also at Yale, who is more the statistician. Jim Durbin and Bill Phillips would be fine, too, qua statisticians contributing to econometrics.

Next, suppose we are fortunate enough to attract both Ken Arrow and C. V. Wiesacker [sic] ; the net balance in favor of theory would then become heavy indeed. There will be no need to panic and for instance, proceed instantly to hire Arthur Burns. But even so, it will behoove the department to push relentlessly on expanding the more empirical side. Since all tenure slots by then will have been sewed up, I don’t see how this can readily be done.

Finally, the department ought to raise more finance for computation. The burden has been disproportionately assumed by the Sloan School, even though several Economics Department research projects have made highly welcome and substantial contributions to the installation downstairs. In this connection, the department should seriously consider acquiring the long run services of someone with a major interest [in] computer systems; very different and high qualified individuals such as Mark Eisner or Don Carroll come to mind. The department will lag behind seriously unless it expands in this direction.

This has not been a balanced presentation of needs. I shall leave that to more balanced individuals.

 

_________________________________

 

[Robert M. Solow response]

MEMORANDUM TO: E. Cary Brown, Head
FROM: Robert M. Solow
SUBJECT: Yours of February 7

 

  1. Undergraduate program. I suppose basically we just passively accept as many majors as come along. We might attract more by improving the teaching and brightening up the course offering. So far we have got along just fine with a pretty dreary undergraduate program, and previous attempts to Do Something have petered out. Is history trying to tell us something? The only reason I can think of for trying again is this: if the department faculty is going to state bigger, especially among assistant professors, then we probably need some decent undergraduate teaching for them to do. (Not only them – I would volunteer to do some too.) Why not let the assistant professors do the planning – they probably have more ideas. Suggestions: new undergraduate subjects in mathematical economics, econometrics, “poverty”, transportation (or public investment); cancel one of the current Labor subjects (or convert to “poverty”), maybe cancel 14.06, 14.09; organize research seminar on one-big-project basis; keep 3 or 4 of the best seniors on as PhD candidates as a matter of course.
  1. Graduate program. Does it have to expand to justify slightly enlarged faculty? If so, then accept universe, but fight like hell for adequate space, scholarships, research funds. If not, think carefully. If faculty enlarges and improves, we should be able to do better on admissions. There will always be some lemons admitted; but it is a question whether one would not prefer current size of enrollment with improved bottom half to enlarged enrollment with current quality. If we get Arrow and Weizsäcker, and keep half-dozen assistant professors, some growth of graduate student body probably inevitable. But I’d keep it slow, and in line with admission quality, space, scholarships, research money. Aim for entering class of 40 by 1975? Certainly no more.
  1. New fields. If MIT goes into Urban Studies, I think we ought to move too. This means some joint research, perhaps offering a few fellowships specifically in urban economics, some new appointments (transportation, poverty, local finance), probably young guys. (I’d like to see Mike Piore and Frank Levy free to start something.) (Would Bill Pounds like to hire Joe Kershaw?) Maybe we ought to start looking next fall. This complex could be a major counterweight to theory. We could make a senior appointment, but I doubt we could find a good enough man. We also lack a really high-class macro-numbers man – like Art Okun or Otto Eckstein or George Perry. Should we try Les Thurow? Or try eventually for Steve Goldfeld? Goldfeld would help with Money, but Thurow would fit into poverty-manpower bit. I think I might seriously favor going for Thurow now if we can afford it.

_________________________________

 

[M. A. Adelman response]

March 16, 1967

Memorandum to:     Professor E. Cary Brown
From:                         M.A. Adelman
Subject:  President H. W. Johnson’s request to submit long-range plans: industrial organization field

  1. Enrollment in the graduate course has declined to the point where it is best given in alternate years. Theses written have not decreased, and there are six now in preparation. I wish to use the time made available to teach the course on energy economics when Paul Rodan retires. The remaining time is best devoted to undergraduate teaching (see below).
  2. Undergraduate enrollment seems to be on the increase in 14.02, 14.04, and 14.22. With the appointment of Robert Crandall, we are fully staffed. I would wish to have 14.02 taught exclusively by lecture and sections (teaching assistants) except where the undergraduates’ program will not permit it. Where we are compelled to fill in with three-recitation sections, I strongly urge that they should not be taught by teaching assistants. Since the transfer to lectures economizes manpower, these two changes should be offsetting, but will take more of my own time.
  3. I have given a joint seminar with Harvard (Economics Department and Middle East Center) on Eastern Hemisphere Oil, and will repeat it next year. It is still an uncertain venture, however, in a sensitive area, and the fuss about CIA influence in academic research may kill it.
  4. I join in concern over our weakness in economic history. East European economics might best be treated as an expansion of our current offering in Soviet economics, since there is sufficient unity of geography and practice. I wish some encouragement could be given to East Asian especially Japanese studies, where English sometimes suffices, but would not care to have it as a field of specialization.

 

Source: Duke University, Rubenstein Library. Evsey D. Domar papers, Box 7, Folder “Peter Temin” [apparently misfiled].

Image Source: MIT 1959 Technique (Yearbook).

Categories
Economists M.I.T.

MIT. Department of Economics Group Photo, 1976

Back Row:  Harold FREEMAN, Hal VARIAN, Jerome ROTHENBERG, Peter DIAMOND, Jerry HAUSMAN

4th Row: Paul JOSKOW, Anne FRIEDLAENDER, JOHN R. MORONEY (VISITOR TO DEPARTMENT)

3rd Row: Stanley FISCHER, Jagdish BHAGWATI, Rudiger DORNBUSCH, Robert SOLOW, Robert HALL

2nd Row: Edward KUH, Morris ADELMAN, Abraham J. SIEGEL, Richard ECKAUS, Martin WEITZMAN

1st Row: Evsey DOMAR, Paul SAMUELSON, Charles KINDLEBERGER, E. Cary BROWN, Franco MODIGLIANI, Sydney ALEXANDER, Robert BISHOP

1976_MITEcon_blogCopy

Apparently didn’t get the memo and/or not pictured: Michael PIORE, Frank FISHER, Peter TEMIN.

Thanks to Robert Solow, the photo-bomber standing to Solow’s left in the picture has been identified as a guest from Tulane University, John Moroney. It is possible that I forgot some other person not included in this faculty picture.

I note that the entire front row has gone to that great Department of Economics in the Cloud.

Source: A graduate student buddy of mine who entered the MIT Ph.D. program in 1975/76.

______________________

If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled of which this is the 250th. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

Categories
Chicago Exam Questions Suggested Reading Syllabus

Chicago. Theory of Income and Employment. Domar, 1948

Jacob Marschak’s course “The Theory of Income and Employment” was taught by the (visiting) assistant professor of economics and research associate in the Cowles Commission, Evsey D. Domar, in the Spring Quarter of 1948. The appointment must have taken place after the Announcements for 1947-1948 were published in May, 1947, so one presumes there was a relatively late change in plans.

For those interested in Domar’s early backstory,  Evsey (Joshua) Domashevitsky arrived in the U.S. on the S.S. Taizo Maru that departed 27 July 1936 from Kobe, Japan and arrived at the port of Los Angeles, California August 16. Domar (“race: Hebrew; nationality: White Russian”) was born April 16, 1914 in Lodz, Poland and last resided in Dairen, Manchuria (now Dalian or Talien, China) before he left for the U.S. He worked his way through UCLA and his graduation photo from the college yearbook graces this posting.

___________________

ECONOMICS 335
THE THEORY OF INCOME AND EMPLOYMENT

Spring, 1948
E. D. Domar

Required Reading List

It is assumed that the students are familiar with the contents of the first 20 chapters of A. P. Lerner’s Economics of Control.

 

PART I.   THE MEASUREMENT OF TOTAL OUTPUT.         March 30 – April 1

Simon Kuznets, National Income and Its Composition, V. I, Ch. 1.
J. R. Hicks and A. G. Hart, The Social Framework of the American Economy, ch. 3, 8, 10-13, 15, 16.
National Planning Association, National Budgets for Full Employment.
Survey of Current Business, National Income Supplement, July, 1947.

 

PART II.   THE ESSENCE OF THE THEORY.    April 3- 28.

J. M. Keynes, The General Theory of Employment, Interest and Money.
A. P. Lerner, Economics of Control, ch. 21-25.
American Economic Association, Readings in Business Cycle Theory, ch. 5-12.
S. E. Harris, editor. The New Economics, ch. 9, 11-15, 19, 33, 36.
Oscar Lange, Price Flexibility and Employment, pp. 1-90.
Milton Friedman, “Lange on Price Flexibility and Employment,” American Economic Review, Sept. 1946 (Reprints in Harper Reserve Room).
Lawrence Klein, The Keynesian Revolution, ch. 3-5.
Gottfried Haberler, Prosperity and Depression, Ch. 8, 13.
A. C. Pigou, “The Classical Stationary State,” The Economic Journal, December 1943.
J. E. Meade and P. W. S. Andrews, “Summary of Replies to Questions on Effects of Interest Rates,” and “A Further Inquiry into the Effects of Rates of Interest,” Oxford Economic Papers, No. 1, 1938 and No. 3, 1940.
Simon Kuznets, “Relation between Capital Goods and Finished Products in the Business Cycle,” in Economic Essays in Honor of Wesley Clair Mitchell.
R. F. Kahn, “The Relation of Home Investment to Unemployment,” Economic Journal, 1931.

 

PART III.   UNDERCONSUMPTION, MATURE ECONOMY, AND CAPITAL ACCUMULATION.        May 4-14.

A. H. Hansen, Fiscal Policy and Business Cycles.
A. H. Hansen, Economic Policy and Full Employment, ch. 15, 16, Appendix B.
E. D. Domar, “Expansion and Employment,” American Economic Review, 1947 (reprints on reserve).
E. D. Domar, “The Problem of Capital Accumulation,” (Mimeographed).
P. M. Sweezy, The Theory of Capitalist Development, ch. 10, 12.
J. A. Schumpeter, Capitalism, Socialism and Democracy, Part II.
G. Terborgh, The Bogey of Economic Maturity.
Readings in Business Cycle Theory, ch. 19-20.

 

PART IV.   POLICY          May 15- June 10.

(in addition to preceding readings)

Board of Governors of the Federal Reserve System, Public Finance and Full Employment, Postwar Economic Studies No. 3, pp. 1-21, 53-68.
A. H. Hansen, Economic Policy and Full Employment, parts IV, V, VI.
M. De Chazeau and others (Committee for Economic Development) Jobs and Markets: How to Prevent Inflation and Depression.
E. F. Burchard and others (Oxford University Institute of Statistics), The Economics of Full Employment.
Mints, Hansen and others. Symposium of Fiscal and Monetary Policy, The Review of Economic Statistics, May 1946.
J. Mosak and Arthur Smithies, “Forecasting Post-War Demand,” Econometrica, 1945.
H. Simons, “Hansen on Fiscal Policy,” The Journal of Political Economy, 1942.
National Budgets for Full Employment
Economic Report of the President, January 1948.
A. P. Lerner and F. D. Graham, Planning and Paying for Full Employment.
M. Friedman, “A Monetary and Fiscal Framework for Economic Stability,” (Mimeographed).
W. H. Beveridge, Full Employment in a Free Society, a general survey, with emphasis on Appendix C.

___________________

Economics 335
Final Examination

June 17, 1948
One hour and fifteen minutes

Answer all questions. They carry equal weights.

  1. Ever since the end of the war, it has been asserted by various authorities that increased production is the best cure against inflation. But it can be also argued that while increased production enlarges the supply of goods, it also generates additional income and therefore demand. So in the end it may or it may not mitigate inflation.
    Analyze this question and try to find the correct answer. The quality and depth of your analysis will count more than its quantity.
  2. “In spite of his claims to the contrary, Keynes did not succeed in proving the possibility of underemployment equilibrium if wages and prices were flexible. That a long period of unemployment could persist as a result of wage and price rigidity we had known long before Keynes.”
    Comment on this statement and show what effects would flexible prices and wages have on elimination of unemployment (in a depression) and stabilization of the price level (in an inflation). Indicate clearly every step in your analysis. What practical recommendations follow from your discussion?
  3. You were employed by the U. S. Bureau of the Budget in 1941 to make an economic forecast and to recommend practical policy measures to prevent both unemployment and inflation in the year 1942, when large war expenditures were expected. Following roughly the method of national budgets (or an equally good alternative one) set up a hypothetical but reasonable numerical model for the year 1942. Show clearly (a) the information you will require; (b) the assumptions you will make; (c) how (a) and (b) are brought together; and (d) policy recommendations you will make. Indicate each step explicitly.
  4. Write for some twenty minutes on any subject covered in the course, but not included in the preceding questions and not studied in your term paper. Make sure you have something worth-while to say.

 

___________________

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Evsey D. Domar Papers, Box 15, Folder: “Macroeconomics, Old Reading Lists”; Box 16, Folder: “Final Exams. Johns Hopkins, Stanford, U of Michigan”.

Image Source: Joshua Domashevitsky (Evsey D. Domar), University of California at Los Angeles, Bruin Life Yearbook/Southern Campus Yearbook, 1939, p. 52. Caption to graduation picture: “Joshua Domashevitsky, A. B./Economics/ Transferred from State College of Law, Manchuria: Foreign Trade Club; Artus, Chancellor of the Exchequer 4.”

Categories
Chicago Courses Economists Exam Questions Syllabus

Chicago. Course Notes. Theory of Income and Employment. Marschak. 1948.

The Cowles Commission Archive at Yale provides a copy of Income, Employment, and the Price Level: Notes on Lectures Given at the University of Chicago Autumn 1948 and 1949 by Jacob Marschak. Notes edited by David Fand and Harry Markowitz, 1951. Problems, course examination (Fall 1949) and reading list are included.

See the biographical memoir for Jacob Marschak (1898-1977) written by Kenneth Arrow to appreciate the enormous debt modern economics owes to Marschak.

From the Course Announcements this would have been Economics 335, The Theory of Income and Employment offered in Autumn and Spring quarters.  The notes explicitly refer to only the Autumn Quarters of 1948 and 1949. Oswald H. Brownlee was listed  in the Announcements for the course for the Spring Quarter in 1949.

In the Evsey D. Domar Papers at Duke University’s Rubenstein Library, Box 16 c.1, folder “Final Exams: Johns Hopkins, Stanford, U. of Michigan”, there is a one page mimeographed page of final exam questions for “Economics 335, June 17, 1948” which is the time Domar had an joint appointment Cowles Commission/Department of Economics at the University of Chicago and corresponds to the precise end of the Spring quarter. Thus I consider it highly likely to most probable that Domar taught the Spring term, 1948 of Economics 335.

Image Source: Carl F. Christ. History of the Cowles Commission, 1932-1952.

Categories
Courses Economists Harvard

Harvard Economics. Hansen and Williams Fiscal Seminar 1937-1944

Motivation
Fiscal Policy Seminar 1937-38
Fiscal Policy Seminar 1938-39
Fiscal Policy Seminar 1939-40
Fiscal Policy Seminar 1940-41
Fiscal Policy Seminar 1941-42
Fiscal Policy Seminar 1942-43
Fiscal Policy Seminar 1943-44
Fiscal Policy Seminar 1944-45

___________________________

 

From the first annual report of the Graduate School of Public Administration by Dean John H. Williams for 1937-1938

[p. 298] Concerning the seminars which constitute our program of work little further comment seems necessary. A statement of last year’s program and that being followed this year is given in the appendix, where we have sought to describe in detail the content of the seminars and our methods of conducting them. Since properly qualified students carrying on graduate study in other schools and departments of the University may also participate in our seminars the program of the School embraces a student body many times larger than the number of fellows formally registered in the School. Thus at the present time there is a total enrollment of one hundred and eighty-eight students in the various seminars of the School. We began last year with five seminars and have expanded the program this year to eleven, of which five are full-year and six half-year seminars. In selecting the subjects we have been guided in large measure by our own interests and competence, but within these limits we have sought for subjects presenting problems of large public importance, problems both of policy and of procedure, requiring the combined efforts of different disciplines within the social sciences and permitting of effective cooperation between the University and the public service. Especially we have sought to find subjects that are at the research stage, and to put the emphasis upon investigation rather than upon formal instruction. Our interest is quite as much in learning for ourselves as in attempting to teach others…

[p. 314]

Fiscal Policy.
Professors WILLIAMS and HANSEN.

This seminar is concerned with public finance in relation to economic, political, and social institutions and systems. It deals with the monetary aspects of expenditures and revenues, with public finance as a compensatory mechanism in the business cycle, and with the social and political implications of government spending.

___________________________

 

FISCAL POLICY SEMINAR, 1937-1938

Source:
Official Register of Harvard University, Vol. XXXVI February 28, 1939, No. 4.
Issue containing the report of the President of Harvard College and reports of departments for 1937-38, pp. 307-310.

The Fiscal Policy Seminar in 1937-1938 was conducted on two planes: (1) a general meeting which included active members of the seminar as well as others in the University, both graduate students and faculty members, who had a special interest in one or more of the fields covered at these meetings; (2) a meeting restricted to the working members of the seminar.

The general seminar session met each week on Friday from four to six and was addressed by a visiting consultant of the School. The afternoon session was followed by dinner with the visiting guest attended mainly by selected members from the working seminar who were especially interested in the particular topic under discussion, the dinner in turn being followed by an extended discussion, lasting frequently until 10 or 10:30 o’clock. The visiting speakers were for the most part government officials, but there were also included various officials in the Treasury, Federal Reserve Bank of New York, Federal Reserve Board in Washington, Social Security Board, Works Progress Administration and the Federal Housing Administration….

The general seminar session with visiting consultants proved extremely valuable from various standpoints. It proved a means by which government officials on their part came into closer contact with the Faculty and students of the Graduate School of Public Administration and accordingly acquired a personal interest in its problems, and on the other side a means of presenting to the School in a more vital way the problems confronting the government. This type of close contact, moreover, is believed to be a useful means of developing placement openings for the graduates of the School in Washington. The discussions with the visiting consultants in the Friday sessions, moreover, proved extremely stimulating as a background for the research work done by the working members of the restricted seminar group.

The working seminar met each week on Monday from four to six. At these sessions papers were presented by various members of the seminar. Out of these papers a number of articles were prepared for submission for publication in various economic journals. It appears that out of the year’s work perhaps some four or five articles in leading journals are likely to materialize. Some have already been accepted.

The combined work of these two seminar meetings forms the background of a research project in Fiscal Policy, which it is planned will eventuate in a volume exploring the problem in a general way and raising important problems for further research.

Program of Friday Meetings

October 15. F. J. BAILEY — “The Work of the Federal Bureau of the Budget.”

October 22. CARL SHOUP — “General Over-All View of the American Tax System.”

October 29. EUSTACE SELIGMAN — “The Effect of the Capital Gains Tax on the Investment Market.”

November 12. GEORGE C. HAAS, JOSEPH S. ZUCKER, L. H. SELTZER and A. F. O’DONNELL — “The Federal Tax Structure.”

November 26. LAWRENCE SELTZER — “The Undistributed Profits Tax.”

December 3. GERHARD COLM — “Economic Consequences of Recent American Tax-Policy.”

December 10. GEORGE O. MAY — “The 1936 Federal Tax Legislation.”

December 17. JACOB VINER — “The General Relations between Fiscal Policy and the Business Cycle.”

February 11. DANIEL W. BELL — “Treasury Financing”; W. R. BURGESS – “Relations of the Reserve Banks and the Treasury.”

February 18. E. A. GOLDENWEISER — “Relations of Deficit Financing to the Banking System.”

February 25. WOODLIEF THOMAS — “Fiscal Policy and the Money Market.”

March 4. LAUCHLIN CURRIE — “Federal Income -Creating Expenditures.”

March 18. A. J. ALTMEYER and WILBUR J. COHEN — “Old Age Insurance and Old Age Assistance: Current and Future Prospects.”

March 25. MERRILL G. MURRAY and JOHN J. CORSON — “The Social Security Taxes.”

April 1. ERNEST M. FISHER — “The Federal Housing Administration.”

April 15. ARTHUR R. GAYER — “Compensatory Spending.”

April 22. CORRINGTON GILL — “Administrative and Fiscal Problems of the Relief Administration.”

April 29. LEWIS DOUGLAS — “Government Fiscal Policy.”

May 6. GUNNAR MYRDAL — “Fiscal Policy in Sweden.”

Program of Monday Meetings

October 18. R. A. MUSGRAVE — “The Twentieth Century Fund Report on Facing the Tax Problem.”

October 25. G. G. JOHNSON — “The Capital Gains Tax.”

November 1. R. V. GILBERT — “The Price of Common Stock as an Element in the Interest Price Structure.”

November 8. EMILE DESPRES — “The Effect of the Capital Gains Tax upon Capital Formation.”

November 15. Dr. HEINRICH BRUENING — “Monetary and Fiscal Policies in Germany during the Depression.”

November 22. WALTER SALANT — “The Effect of Securities Market Regulations upon Capital Formation.”

November 29. K. E. POOLE — “Tax Remission as a Compensatory Device.”

December 6. E. P. HERRING — “Administrative Problems in the Formulation and Execution of Fiscal Policy.”

December 13. E. N. GRISWOLD — “Legal Aspects of the Undistributed Profits Tax.”

February 14. ROBERT FRASE — “Economic Effects of Social Insurance Reserves, with particular reference to Unemployment Insurance Reserves.”

February 21. D. W. LUSHER — “The Relation of the Structure of Interest Rates to Investment.”

February 28. R. A. MUSGRAVE — “Limits in Public Debt and Taxation.”

March 7. WALTER SALANT — “Effects of Fiscal Policy on Business Stability.”

March 14. HERMAN M. SOMERS — “Future Fiscal Burdens Arising from the Social Security Program.”

March 21. MARTIN KROST — “Tax Variability as a Compensatory Stabilizing Device.”

March 28. NORTON LONG — “Some Aspects of Fiscal Planning under Democratic Government.”

April 11. S. J. DENNIS — “The Relation of the Undistributed Profits Tax and the Soldiers’ Bonus to the 1937 Depression.”

April 25. EMILE DESPRES — “Ezekiel’s Proposal to Secure Full Employment.”

May 2. G. G. JOHNSON — “The Trend Toward Treasury Control of Credit in the United States.”

May 9. GUNNAR MYRDAL — “Fiscal and Monetary Policy in Sweden.”

 

___________________________

 

FISCAL POLICY SEMINAR, 1938-1939.
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XXXVII March 30, 1940, No. 12.
Issue containing the report of the President of Harvard College and reports of departments for 1938-39, pp. 342-345.

The Fiscal Policy Seminar was conducted in 1938-1939 on substantially the same plan as in 1937-1938; that is, the general seminar sessions, which met on Fridays from four to six, were addressed by a visiting consultant and were attended by the active members of the seminar, as well as by faculty members and graduate students who were especially interested in the topics under discussion. Smaller meetings were held on Monday afternoons from four to six and were attended only by students engaged in research in the field of fiscal policy.

The general sessions were held less frequently than last year – usually twice a month – and on two occasions were conducted jointly with the Administrative Process Seminar. These joint meetings were on the subjects of the capital budget and federal grants to states, in which both seminars had an interest.

At the three December meetings, “previews” were held of round table discussions which were conducted later in the month at the annual meeting of the American Economic Association. The round tables covered the topics “The Role of Public Investment and Consumer Capital Formation,” “Divergencies in the Development of Recovery in Various Countries,” and “The Workability of Compensatory Devices.” In each case three guest speakers presented papers covering different aspects of the problem and providing the basis for general discussion….

As last year, dinners attended by the visiting guest and a small group of students followed the Friday afternoon session, and in the evening informal meetings were held for further discussion.

At each Monday session, a paper was presented by a member of the group doing active research in fiscal policy. The paper was discussed by the other members of the seminar. These papers and discussions formed the basis for theses which were submitted at the close of the year by students who were taking the seminar for academic credit.

The research project begun last year has resulted in a preliminary manuscript on “Fiscal Policy in Relation to the Business Cycle and Chronic Unemployment.” During the coming year, it will be revised and expanded with a view to publication.

The following is a list of the Monday meetings of the seminar:

October 3.            An Over-all View of the Current United States Tax System: Federal, State and Local.

October 10.          An Over-all View of Governmental Expenditures, 1913-1938: Federal, State and Local.

        An Over-all View of the Rise of Public Debt, 1913-1938: Federal, State and Local.

October 17.          The 1938 Revenue Act.

October 24.          Issues Raised by the Colm-Lehmann Pamphlets.

October 31.          The Economic Consequences of Retirement of the Public Debt.

November 14.      The Theoretical and Practical Implications of Separating the Investment Budget from the Current Budget.

November 21.      New York City’s Experience.

November 28.     A Re-examination of the Stabilization of Consumer Income.

December 5.        A Program for the Cyclical Stabilization of Investment and Current Expenditures.

December 12.      Public Investment: History and Program for Future.

December 19.      An Analysis of Governmental Expenditures with a View to Showing the Effects of the Volume and Types of Different Expenditures on Consumption, Saving and Investment.

February 6.          Canadian Fiscal Relations.

February 13.        Japanese Monetary and Fiscal Recovery Policies.

February 20.       The Development of Budgetary Organization.

February 27.        Balkan Credit and Fiscal Policy.

March 6.               The Economic Implications of a Rising Public Debt.

March 13.             Consumption, Saving and Investment and Relief and Social Security.

March 20.            A Re-examination of the Stabilization of Consumer Income.

March 27.            Deficit Financing and the Banking System.

April 10.              Government Loans and Subsidies as a Stimulus to Private Investment.

April 17.               The Economic Effects of the Income Tax.

April 24.              Federal Aid to the States.

May 1.                   Some Attempts at the Statistical Determination of the Multiplier and the Propensity to Consume.

The non-resident consultants and the meetings which they attended were as follows:

October 7.            J. ROY BLOUGH, Director of Tax Research, Division of Tax Research, United States Treasury Department. Tax Policy in the United States Today.

October 28.         LAWRENCE H. SELTZER, Assistant Director, Division of Research and Statistics, United States Treasury Department. Tax Policy with Reference to Capital Accumulation.

November 7.       FRITZ LEHMANN, New School for Social Research. The German Situation.

November 18.     CHARLES W. ELIOT, 2nd., Executive Officer, National Resources Committee. Current and Capital Budgets.
GUNNAR MYRDAL, University of Stockholm. Swedish Budgetary Procedure.
This was a joint meeting with the Administrative Process Seminar.

November 25.     ROSWELL MAGILL, former Under Secretary of the Treasury. The Formulation of a Revenue Bill.

December 2.        Preview of American Economic Association Round Table on The Role of Public Investment and Consumer Capital Formation.

GERHARD COLM, New School for Social Research. The Government as Investor.

BENJAMIN W. LEWIS, Oberlin College. The Government as Competitor.

GRIFFITH JOHNSON, United States Treasury Department. The Effect of the Social Security Taxes on Consumption and Investment.

December 9.        Preview of American Economic Association Round Table on Divergencies in the Development of Recovery in Various Countries.

GOTTFRIED HABERLER, Harvard University. Recovery Policies in Democratic Countries.

GEORGE N. HALM, Tufts College. Recovery Policies in Totalitarian States.

EMIL LEDERER, New School for Social Research. Is There a World-wide Drift Toward Regimented Control of Industry?

December 16.      Preview of American Economic Association Round Table on the Workability of Compensatory Devices.

PAUL T. ELLSWORTH, University of Cincinnati. The Efficacy of Central Bank Policy.

PAUL A. SAMUELSON, Junior Fellow, Harvard University. The Theory of Pump-Priming Re-examined.

EMILE DESPRES, Board of Governors of the Federal Reserve System, Washington, D. C. The Proposal to Tax Hoarding.

February 17.        LAUCHLIN CURRIE, Assistant Director, Division of Research and Statistics, Board of Governors of the Federal Reserve System. The Problem of the Multiplier and the Propensities to Save and Consume and the Outlook for Capital Expenditures.

March 10.             GARDINER MEANS, Director, Industrial Section, National ResourcesCommittee. Discussion of preliminary edition of “Patterns of Resource Use” by the National Resources Committee.

March 17.             E. A. GOLDENWEISER, Director, Division of Research and Statistics, Board of Governors of the Federal Reserve System. The Problems of the Quantity and Quality of Money from the Point of View of Monetary Regulation.

April 14.               EWAN CLAGUE, Director, Bureau of Research and Statistics, Social Security Board. Federal Grants to States.

April 21.                J. DOUGLAS BROWN, Princeton University. A Survey of the Social Security Program in the United States.

April 28.               MARRINER ECCLES, Chairman of the Board of Governors of the Federal Reserve System. Financial and Fiscal Problems Faced by Capitalistic Democracies Today.

 

___________________________

 

THE FISCAL POLICY SEMINAR, 1939-1940
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XXXVIII April 10, 1941, No. 20.
Issue containing the report of the President of Harvard College and reports of departments for 1939-40, pp. 324-326.

 

The Fiscal Policy Seminar continued its plan of holding meetings on Mondays from four to six, at which students actively engaged in research in the field of fiscal policy presented papers for discussion, and on occasional Fridays, when visiting consultants addressed the group. The Friday meetings, held usually twice a month, were attended by interested faculty members and graduate students as well as by the active members of the seminar. …Following the more formal afternoon presentation on Fridays, a part of the seminar usually met with the speaker in the evening for further informal discussion of the topic.

On October 20, the seminar met with the Administrative Process Seminar to hear Mr. Robert H. Rawson, a former Littauer Fellow, speak on the work of the Federal Bureau of the Budget. Two meetings were held jointly with the Price Policies Seminar – one in November at which Mr. Leon Henderson discussed price rigidities in our economy, and one in February at which Mr. Richard V. Gilbert, Chief of the Industrial Economics Division of the Department of Commerce, spoke on “War Inventories and the Current Economic Outlook.”

Discussion at the first five Monday meetings was based on the manuscript Fiscal Policy in Relation to the Business Cycle, a research project which has grown out of the meetings during the past two years. The subsequent Monday sessions were devoted to the presentation of papers by members of the group. These papers were discussed by the seminar and presented as theses at the end of the year by those receiving academic credit for the course.

The program of Monday meetings was as follows:

Professor ALVIN H. HANSEN

The Consumption Function.

Current Trends in Economic Theory with Special Reference to the Business Cycle.

Secular Trends in Investment and Saving.

Professor JOHN H. WILLIAMS.

Shifts in Control of Depressions.

Theories of Compensatory Spending.

Budgeting and Fiscal Policy.

The Marginal Propensity to Import.

The Australian Multiplier.

Investment in the American Economy, 1850-1940.

Fiscal Aspects of Ireland’s Economic Nationalism.

The Power of the Federal Reserve System to Restrict Expansion.

Wartime Corporation Finance.

Wartime Finance in Great Britain.

Unemployment Insurance Funds.

The Effect of Deficit Financing on the Banking System.

Public Health.

The Capital Budget.

The Implications of the Growth of Life Insurance for Full Employment.

Taxation in the Business Cycle.

Public Investment.

Redistribution of Income as a Result of Federal Expenditures.

The following is a list of the non-resident consultants and the topics which they discussed:

October 6.     ISADOR LUBIN, Commissioner of Labor Statistics, United States Department of Labor.

Subject: The Position of Labor Relations and Labor Costs in the Current Situation.

October 20.  HARRY D. WHITE, Director, Division of Monetary Research, United States Treasury Department.

Subject: Gold and Foreign Exchange.

October 30.  ROBERT H. RAWSON, Junior Administrative Analyst, Bureau of the Budget.

Subject: Organization and Methods of the Federal Bureau of the Budget.
(Joint meeting with the Administrative Process Seminar.)

November 13.LEON HENDERSON, Commissioner, Securities and Exchange Commission, and member of the Temporary National Economic Committee.

Subject: Price Rigidities in the American Economy.
(Joint meeting with the Price Policies Seminar.)

December 8. RAYMOND W. GOLDSMITH, Assistant Director, Research and Statistical Section, Securities and Exchange Commission.

Subject: The Volume and Components of Saving in the United States.

February 26. RICHARD V. GILBERT, Chief, Industrial Economics Division, United States Department of Commerce.

Subject: War Inventories and the Current Economic Outlook.

March 1.        WARD SHEPARD, Bureau of Agricultural Economics, United States Department of Agriculture.

Subject: A Proposed Forest Policy for the United States.

March 8.       EMILE DESPRES, Senior Economist, Division of Research and Statistics, Board of Governors of the Federal Reserve System.

Subject: Internal Expansion and the International Position of the United States.

March 29.     GARDINER MEANS, Economic Adviser, National Resources Planning Board.

Subject: The Structure of the American Economy.

April 12.        M. A. HEILPERIN, Institute for Higher International Studies, Geneva.

Subject: The International Monetary System and the Business Cycle.

May 3.           GERHARD COLM, Economist, Division of Industrial Economics, United States Department of Commerce.

Subject: Some Problems of Long-Run Tax Policy.

 

___________________________

 

THE FISCAL POLICY SEMINAR, 1940-1941.
Professors Williams and Hansen 

Source:
Official Register of Harvard University, Vol. XXXIX February 25, 1942, No. 5.
Issue containing the report of the President of Harvard College and reports of Departments for 1940-41, pp. 323-326.

The Fiscal Policy Seminar continued its established practice of including in its program meetings at which visiting consultants discussed various topics of interest to the group, and sessions devoted to the presentation of student reports. The reports were presented in the second semester and were discussed at length by the other members of the seminar….

Seven of the meetings were held jointly with other seminars – four with the International Economic Relations Seminar and three with the Agricultural, Forestry, and Land Policy Seminar.

 

The program of meetings was as follows:

September 30. Professor HANSEN.

October 7.      Professor WILLIAMS.

October 11.   SVEND LAURSEN, Student, Graduate School of Arts and Sciences, Harvard University.

Subject: International Trade and the Multiplier.
(Joint meeting with International Economic Relations Seminar.)

October 21. Professor HANSEN and Professor WILLIAMS.

October 25. MARTIN KROST, Senior Economist, Division of Research and Statistics, Board of Governors of the Federal Reserve System.

Subject: The Excess Profits Tax.

October 28. RICHARD A. MUSGRAVE, Instructor, Department of Economics, Harvard University.

Subject: Report of the Canadian Royal Commission on Dominion Provincial Fiscal Relations.

November 4. Professor HANSEN.

November 8. GEORGE TERBORGH, Senior Economist, Division of Research and Statistics, Board of Governors of the Federal Reserve System.

Subject: Prospective Accumulated Backlog in Capital Goods and Durable Consumers’ Goods Industries in the Post-Defense Period.

November 18. ELIZABETH B. SCHUMPETER.

Subject: Fiscal and Monetary Policy in Japan.

November 25. BENJAMIN H. HIGGINS and RICHARD A. MUSGRAVE, Instructors, Department of Economics, Harvard University.

Subject: The Savings-Investment Problem Re-examined.

December 2. Professor HANSEN.

December 9. DAN T. SMITH, Associate Professor of Finance and Taxation, Graduate School of Business Administration, Harvard University.

Subject: The Role of Borrowing in the Defense Program.

December 16. Professor HANSEN.

December 20. GUY GREER, Federal Housing Administration.

Subject: The Organization of the Federal Housing Program.

February 3.   Student Report.

Subject: National Income and Military Effort.

February 10. Student Report.

Subject: United States Housing Program During and After the Defense Program.

February 17. ERIC ENGLUND, Assistant Chief, Bureau of Agricultural Economics, United States Department of Agriculture.

Subject: Alternatives in Financing of the Agricultural Programs.

(Joint meeting with Agricultural, Forestry and Land Seminar.)

February 21. HARRY D. WHITE, Director, Division of Monetary Research, United States Treasury Department.

Subject: Blocked Balances.

(Joint meeting with International Economic Relations Seminar.)

February 24. J. KEITH BUTTERS, Instructor, Department of Economics, Harvard University.

Subject: Discriminatory Features in Federal Corporation Income Taxes.

March 3. J. KENNETH GALBRAITH, National Defense Advisory Commission.

Subject: The Farm Credit Administration and Related Farm Credit Problems.

(Joint meeting with Agricultural, Forestry, and Land Policy Seminar.)

March 10. Student report.

Subject: Trends in the Fiscal Incapacity of State and Local Governments and Their Impact on Defense and Post-Defense Policy.

March 17. Student Report.

Subject: The Effect of the Tax Structures on Economic Activity in the United States and Great Britain, 1929-1937.

March 21. RICHARD V. GILBERT, National Defense Advisory Commission.

Subject: The American Defense Program.

(Joint meeting with International Economic Relations Seminar.)

March 24. Student Report.

Subject: Essays on Fiscal Policy and the Building Cycle.

I.  Transport Development and Building Cycles.
II. Monetary Control of the Building Cycle.

April 7. Student Report.

Subject: The Monetary Powers of Some Federal Agencies outside the Federal Reserve System.

April 14. Student Report.

Subject: Incentive Taxation.

April 18. Student Reports.

Subjects: The Use of Credit as an Instrument of Social Amelioration in Agriculture. Credit for a Solvent Agriculture.

(Joint meeting with Agricultural, Forestry, and Land Policy Seminar.)

April 25. CARL SHOUP, Professor of Economics, Columbia University.

Subject: Defense Financing.

April 28. Student Report.

Subject: The Economic Development of a War Economy.

May 2. GUSTAV STOLPER, Financial Adviser.

Subject: Financing the American Defense Program.

(Joint meeting with International Economic Relations Seminar.)

 

___________________________

 

FISCAL POLICY SEMINAR, 1941-1942
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XLI, September 26, 1944, No. 23.
Issue containing the report of the President of Harvard College and reports of the departments for 1941-42, pp. 340-343.

 

Fiscal problems arising out of the war and plans for the post-war period were of dominant interest in the Fiscal Policy Seminar program during 1941-42. With regard to post-war problems particular attention was paid to the question of federal-state-local fiscal relations, and a special section of the seminar library was devoted to books and pamphlets on this topic.

Meetings were held on Mondays and Fridays, the latter being given over mainly to visiting consultants, with reports and discussions by student and faculty members of the seminar concentrated on Mondays. As in previous years, several meetings were held jointly with other Seminars, eight with the International Economic Relations Seminar, and two with the Agricultural, Forestry, and Land Use Policy Seminar….

The program of meetings was as follows:

September 29. The Development of Fiscal Policy.

October 6.     Defense Financing.

October 17.   The Relation Between Fiscal Policy and Inflation.

October 20.  The Problem of Federal, State and Local Relationships.

HARVEY S. PERLOFF, Associate Economist, Board of Governors of the Federal Reserve System.

October 24.  The United States Housing Authority.

NATHAN STRAUS, Administration, United States Housing Authority.

October 27.  Fiscal Policy and Business Cycles.

October 31.   Urban Redevelopment.

GUY GREER, Senior Economist, Board of Governors of the Federal Reserve System.

November 3. Fiscal Policy and Business Cycles.

November 10. The Present State of Fiscal Policy.

November 17. The Multiplier.

November 21. The Federal Advisory Council.

WALTER LICHTENSTEIN, Vice-President, First National Bank of Chicago.

November 24. The Multiplier.

PAUL SAMUELSON, Massachusetts Institute of Technology, and Professor HABERLER.

November 28. Economic Warfare.

NOEL HALL, British Embassy.

December 1. The Multiplier.

PAUL SAMUELSON, Massachusetts Institute of Technology.

December 5. International Economic Relations with Special Reference to the Post-War Situation.

ROBERT BRYCE, Department of Finance, Canada.

December 8. Post-War Problems.

Professors HABERLER and HARRIS as well as Professors WILLIAMS and HANSEN.

December 12. The Revenue Act of 1941.

J. KEITH BUTTERS, Department of Economics, Harvard University.

December 15. The Theory of Public Investment.

Professor HARRIS.

December 19. The 1942 Revenue Act.

ROY BLOUGH, Director of Tax Research, Treasury Department.

January 26. The Problem of Post-War Reconstruction.

PER JACOBSSEN, Economist, Bank for International Settlements.

February 2.  Economic Philosophy and Post-War Fiscal Policy.

ALEJANDRO SHAW, Argentina.

February 9.   Equalization Grants and Their Role in Fiscal Policy (student report).

February 13. Monopolistic Trading and International Relations.

JACOB VINER, Chicago University.

February 16. War Finance and Inflation (student report).

February 20. The Effect of Federalism on Fiscal Policy.

LUTHER GULICK, National Resources Planning Board.

March 2.       Agriculture in the Post-War Period.

LEONARD ELMHIRST, Elmhirst Foundation.

March 9.       War Finance and Direct Taxation (student report).

March 13.     Post-War Domestic and International Investments.

RICHARD M. BISSELL, Department of Commerce.

March 16.     Monetary Implications of Fiscal Policy.

March 20.     The Present Fiscal Situation.

ALBERT GAYLORD HART, Iowa State College.

March 23.     Problems of Monetary Control.

ROBERT V. ROSA, Massachusetts Institute of Technology and

PETER L. BERNSTEIN, Federal Reserve Bank of New York.

March 27.     The Public Work Reserve.

BENJAMIN H. HIGGINS, Economic Consultant, Public Work Reserve.

April 6.          A High-Consumption vs. a High-Savings Economy (student report).

April 10.        Post-War Surpluses and Shortages in Plant and Equipment.

GEORGE TERBORGH, Senior Economist, Division of Research and Statistics, Board of Governors of the Federal Reserve System.

April 13.        Private Industry Post-War Planning.

DAVID C. PRINCE, Vice-President, General Electric Company.

April 17.        Commodity Taxation in a Progressive Tax System (student report).

April 24.       Government Lending Agencies.

ROBERT V. ROSA, Massachusetts Institute of Technology, and

PETER L. BERNSTEIN, Federal Reserve Bank of New York.

April 27.        The Impact of War Expenditures on State and Local Government (student report).

May 1.            The Inflationary Gap.

WALTER SALANT, Chief, Price and Economic Policy Section, Division of Research, Office of Price Administration.

May 21.         The Problem of Britain’s Food Supply.

E. M. H. LLOYD, Chairman, British Food Mission.

 

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FISCAL POLICY SEMINAR, 1942-43
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XLI, September 28, 1944, No. 25.
Issue containing the report of the President of Harvard College and reports of the departments for 1942-43, pp. 243-245.

 

War and post-war fiscal problems were the main consideration in the Fiscal Policy Seminar in 1942-43. This included national aspects of inflationary and tax problems and post-war tax adjustments, as well as federal-state-local fiscal relations.

Meetings were held on Mondays and Fridays, the latter being given over mainly to visiting consultants, with reports and discussions by student and faculty members of the seminar concentrated on Mondays. As formerly, several meetings Were held jointly with other seminars….

The program of meetings was as follows:

October 5.     Professor HANSEN.

Subject: A Survey of the Fiscal.War Picture.

October 9.    MILTON GILBERT, Director of National Income Division, Department of Commerce.

Subject: Concepts of National Income and Its Statistical Measurement.

October 19.   Professor WILLIAMS.

Subject: The Present Status of Fiscal Policy.

October 23.  Professor PAUL SAMUELSON, Massachusetts Institute of Technology.

Subject: Consumption Function.

October 26. Professor WILLIAMS.

Subject: Changes in the Banking System.

October 30.  Professor LAWRENCE H. SELTZER, Wayne University.

Subject: Possible Techniques for the Working of the PostWar Economic System.

November 2. Professor A. P. LERNER, Amherst College.

Subject: Rate of Interest.

November 9. Professor HANSEN.

Subject: War Financing in the United States, Canada, and the United Kingdom.

November 13. Professor FRITZ MACHLUP, Buffalo University. (Joint meeting with International Economic Relations seminar.)

Subject: National Income, Employment and International Relations.

November 16. Professor HANSEN.

Subject: Federal, State, Local Fiscal Relations.

November 20. DAVID E. LILIENTHAL, Director, Tennessee Valley Authority.

Subject: The Tennessee Valley Authority.

November 23. Dr. JOHN KEITH BUTTERS, Harvard University.

Subject: Revenue Act of 1942.

November 27. Hon. GRAHAM F. TOWERS, Governor, Bank of Canada. (Joint meeting with International Economic Relations seminar.)

Subject: Canadian War Economic Measures.

November 30. Professor WILLIAMS.

Subject: Basic Issues of Fiscal Policy.

December 4. LYNN R. EDMINSTER, Vice-Chairman, U. S. Tariff Commission.

(Joint meeting with International Economic Relations seminar.)

Subject: The Reconstruction of World Trade After War.

December 7. Professor WILLIAMS.

Subject: Basic Issues of Fiscal Policy.

December 1. Professor SEYMOUR E. HARRIS. (Joint meeting with International Economic Relations seminar.)

Subject: War Problems of International Trade.

December 14. Professor HANSEN.

Subject: The Beveridge Report.

February 1.  Honorable HAROLD STASSEN, Governor of Minnesota.

Subject: Decentralized Government.

February 8.  HARVEY S. PERLOFF, Federal Reserve Board, Washington.

Subject: State-Local Fiscal Relations.

February 12. THOMAS MC KITTRICK, President of the Bank for International Settlements.

Subject: The Bank for International Settlements.

February 15. Professor HANSEN.

Subject: The Beveridge Plan and a Post-War Minimum Budget.

February 24. Dr. LEO PASVOLSKY, State Department. (Joint meeting with International Economic Relations seminar.)

Subject: Post-War Problems in International Trade.

March 1.        Dr. HANS STAEHLE, Harvard University.

Subject: Consumption and National Income in Post-War.

March 12.     Dr. RICHARD MUSGRAVE, Federal Reserve Board, Washington.

Subject: Revenue Bill-1943.

March 26.     Dr. PAUL STUDENSKI, Professor of Economics, New York University.

Subject: State-Local Fiscal Policies in New York in War-Time.

April 12.        EMILE DESPRES, Office of Strategic Services, Washington. (Joint meeting with International Economic Relations seminar.)

Subject: The Transfer Problem and the Over-Saving Problem in the Pre-War and Post-War Worlds.

April 16.        Dr. ALBERT HAHN. (Joint meeting with International Economic Relations seminar.)

Subject: Planned or Adjusted Post-War Economy.

May 8.           GUY GREER, Editor of Fortune Magazine.

Subject: Urban Redevelopment.

 

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FISCAL POLICY SEMINAR, 1943-44
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XLIV, July 7, 1947, No. 20.
Issue containing the report of the President of Harvard College and reports of departments for 1943-4, pp. 269-270.

 

Fiscal problems of the war and in the postwar period were the general topics under discussion in the Fiscal Policy Seminar in I943-44. More specifically this included national aspects of consumption and saving, taxation, budgeting, and the public debt. Emphasis was also placed on the international financial and monetary problems. Several of the meetings were devoted to discussion of the special fiscal and monetary problems in a number of Latin American countries.

Meetings were held on Mondays and Fridays and consisted of reports by student and faculty members of the seminar and of discussions led by outside consultants and by Dean Williams and Professor Hansen. As in other years, a number of meetings were held jointly with other seminars….

The program of meetings was as follows:

November 8. Professor WILLIAMS.

Subject: General Survey of Fiscal Policy.

November 15. Professor WILLIAMS.

Subject: General Survey of Fiscal Policy (cont.).

November 19. Dr. J. ROY BLOUGH, Director of Tax Research, Treasury Department.

Subject: Some Administrative Aspects of Taxation.

November 22. G. NEIL PERRY, Director, Bureau of Economics and Statistics, British Columbia.

Subject: Fiscal Policy and the Canadian Economy.

November 29. Professor WILLIAMS.

Subject: Problems of International Monetary Stabilization.

December 6. HANS ADLER.

Subject: Population Growth and Fiscal Policy.

December 13. Professor WILLIAMS.

Subject: Problems of International Monetary Stabilization.

December 17. Dr. HARRY WHITE, Director of Monetary Research, Treasury Department.

Subject: Problems of International Stabilization.

December 20. Professor HANSEN.

Subject: Consumption and Saving during the War.

January 3.    Professor HANSEN.

Subject: Consumption and Saving in the Postwar.

January 10.  Professor GOTTFRIED HABERLER.

Subject: Reparations.

January 14.  Dr. N. NESS, Member of Mexican-U. S. Economic Committee.

Subject: Mexico.

January 17.  Dr. BEARDSLEY RUML, Federal Reserve Bank, New York.

Subject: Economic Budget and Fiscal Budget.

January 21.  Dr. P. T. ELLSWORTH, Economic Studies Division, Department of State.

Subject: Chile.

January 24.  Dr. DON HUMPHREY, Special Adviser on Price Control to Haitian Government.

Subject: Haiti.

January 31.  Dr. ROBERT TRIFFIN, Member of U. S. Economic Commission to Paraguay.

Subject: Money, Banking, and Foreign Exchanges in Latin America.

February 4.  Dr. MIRON BURGIN, Office of Coördinator of Inter-American Affairs.

Subject: Argentina.

March 31.     Mr. HENRY WALLICH.

Subject: Fiscal Policy and International Equilibrium.

April 14.        Mr. EVSEY DOMAR, Federal Reserve Board.

Subject: Limitation of Public Debt in Relation to National Income.

May 5.           Dr. J. KEITH BUTTERS and Dr. CHARLES ABBOTT, Harvard Business School.

Subject: Business Taxes.

May 19.         Mr. GUY GREER, Board of Editors, Fortune.

Subject: Urban Redevelopment.

 

___________________________

 

FISCAL POLICY SEMINAR, 1944-45
Professors Williams and Hansen

Source:
Official Register of Harvard University, Vol. XLV, December 1, 1948, No. 30.
Issue containing the report of the President of Harvard College and reports of departments for 1944-45, pp. 282-284.

 

Fiscal problems of the war and in the postwar period were the general topics under discussion in the Fiscal Policy Seminar in 1944-1945. More specifically this included national aspects of consumption and saving, taxation, budgeting, and the public debt. Emphasis was also placed on the international financial and monetary problems. Several of the meetings were devoted to discussion of the special fiscal and monetary problems in a number of Latin American countries.

Meetings were held on Mondays and Fridays and consisted of reports by student and faculty members of the seminar and of discussions led by outside consultants and by Dean Williams and Professor Hansen. As in other years, a number of meetings were held jointly with other seminars….

Three of the papers presented at these meetings were subsequently published in economic journals. The program of meetings was as follows:

*Sept. 11.       J. W. BEYEN, former president of the International Bank at Basle, Chairman of Netherlands Delegation at Bretton Woods.

Subject: Bretton Woods Conference.

*Sept. 18.      RAGNAR NURKSE of Economic and Financial Section of League of Nations.

Subject: Bretton Woods Conference.

*October 30. Professor DOUGLAS COPLAND, University of Melbourne, Australia.

Subject: Australian Problems in the Transition from War to Peace.

*The dates in September and October, while part of the Summer Term, were integrated in the year’s program.

November 6. Professor JOHN H. WILLIAMS.

Subject: Estimates of Postwar National Income and Employment.

November 13. Professor ALVIN H. HANSEN.

Subject: Wartime Fiscal Problems.

November 15. RANDOLPH PAUL, formerly with the U.S. Treasury.

Subject: Postwar Federal Taxation.

November 20. Dr. FREDERICK LUTZ, Princeton University.

Subject: Corporate Cash Balances, I914-1943.

December 4. Professor JOHN H. WILLIAMS.

Subject: The Bretton Woods Agreements.

December 11. EDWARD M. BERNSTEIN, Assistant Director, Division of Monetary Research, Treasury Department.

Subject: The Scarcity of Dollars. (Published in The Journal of Political Economy, March I945.)

December 15. Dr. FRANCIS MC INTYRE, Representative of the Foreign Economic Exchange on Requirements Board of the War Production Board.

Subject: International Distribution of Supplies in Wartime.

January 8.    DAVID E. LILIENTHAL, Chairman of the Tennessee Valley Authority.

Subject: Tennessee Valley Authority.

January 15. Dr. OLIVER M. W. SPRAGUE (Professor Emeritus).

Subject: Postwar Corporate Taxation.

January 22. Dr. WALTER GARDNER, Federal Reserve Board.

Subject: Some Aspects of the Bretton Woods Program.

January 26. Dr. WILLIAM FELLNER, University of California.

Subject: Types of Expansionary Policies and the Rate of Interest.

January 29. Professor WALTER F. BOGNER, Dr. CHARLES R. CHERINGTON, Professors CARL J FRIEDRICH, SEYMOUR E HARRIS, TALCOTT PARSONS, ALFRED D. SIMPSON, AND Mr. GEORGE B. WALKER.

Subject: The Boston Urban Development Plan.

March 5.       Dr. ROBERT TRIFFIN, Federal Reserve Board.

Subject: International Economic Problems of South America.

March 9.       Dr. PAUL J. RAVER, Bonneville Power Administration.

Subject: Bonneville Power Administration.

March 12.     Professor ALVIN H. HANSEN.

Subject: Murray Employment Bill.

March 16.     H. L. SELIGMAN.

Subject: Bank Earnings and Taxation of Bank Profits.

March 19.     Dr. LOUIS RASMINSKY, Foreign Exchange Control Board, Ottawa, Canada.

Subject: British-American Trade Problems from the Canadian Point of View. (Published in the British Economic Journal, September 1945.)

March 26.    Dr. HERBERT FURTH, Federal Reserve Board.

Subject: Monetary and Financial Problems of the Liberated Countries.

April 2.         Dr. LLOYD METZLER, Federal Reserve Board.

Subject: Postwar Economic Policies of the United Kingdom. (An article based on this paper and written in collaboration with Dr. RANDALL HINSHAW was published in The Review of Economic Statistics, November 1945.)

April 13.        s. s. PU [sic]

Subject: Fiscal Policies and Income Generation.

April 16.        Professor EDWARD S. MASON, State Department, Washington.

Subject: Commodity Agreements.

April 20.       HECTOR TASSARA.

Subject: The Role of the Central Bank in the Argentine Economy.

April 23.       Dr. ABBA P. LERNER, New School for Social Research, N. Y.

Subject: Postwar Policies.

April 27.       Professor JOHN VAN SICKLE, Vanderbilt University.

Subject: Wages and Employment: A Regional Approach.

April 30.       Professor ALVIN H. HANSEN.

Subject: Postwar Wage Policy.

May 14.         Dr. E. M. H. LLOYD, United Relief and Rehabilitation Administration, British Treasury.

Subject: Inflation in Europe.

May 21.         AXEL IVEROTH, Swedish Legation, Washington.

Subject: Postwar Plans in Sweden.

May 28.         Professor LEON DUPRIEZ, University of Louvain, Belgium.

Subject: Problem of Full Employment in View of Recent European Experience.

May 29.        Professor SEYMOUR E. HARRIS, Professor WASSILY W. LEONTIEF, Professor GOTTFRIED HABERLER, Professor ALVIN H. HANSEN.

Subject: The Shorter Work Week and Full Employment.