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Econometrics Harvard Statistics Suggested Reading Syllabus

Harvard. Syllabus and partial reading list for graduate time-series econometrics. Sims, 1968-1969

 

Future economics Nobel laureate (2011) Christopher A. Sims was a 26 year old assistant professor at Harvard tasked in the fall term of 1968 to teach a graduate level introduction to time-series econometrics. He had been awarded a Harvard economics Ph.D. earlier that year. His dissertation supervisor was Hendrik Houthakker.

A copy of Sims’ initial list of reading assignments and topics can be found in the papers of Zvi Griliches in the Harvard Archives. Sims does appear to have offered a rather heavy dose of time-series econometrics for that time. Perhaps it was too much of a good thing, at least too much to swallow for most of the department’s graduate students. In any event Econometric Methods I was transferred to / taken over by Zvi Griliches in the following years when the topic of time series was reduced to an amuse-bouche of serial correlation.

In the previous year the course had been taught by Marc Nerlove (Yale University) with the following brief description provided in the course catalogue:  “An introduction to the construction and testing of econometric models with special emphasis on the analysis of economic time series.” 

_______________________

Course Announcement
Fall Term, 1968

Economics 224a. Econometric Methods

Half course (fall term). Tu., Th., S., at 9. Assistant Professor C. A. Sims

The theory of stochastic processes with applications to the construction and testing of dynamic economic models. Analysis in the time domain and in the frequency domain, in discrete time and in continuous time.

Prerequisite: Economics 221b [Multiple regression and the analysis of variance with economic applications] or equivalent preparation in statistics.

Source: Harvard University, Faculty of Arts and Sciences. Courses of Instruction, 1968-69, p. 133.

_______________________

Fall 1968
Economics 224a
Asst. Prof. C. Sims

Course Description

            The accompanying Course Outline gives a detailed description of topics 0 through III which will (hopefully) occupy the first third of the semester. These topics include most of the mathematical tools which will be given econometric application in the later sections. The list of topics in the outline, even under the main headings 0 through III, is not exhaustive; and the topics listed are not all of equivalent importance.

            Many of the references listed overlap substantially. In the first, theoretical, section of the course (except for Section 0) the references are chosen to duplicate as nearly as possible what will be covered in lectures. They should provide alternative explanations when you find the lectures obscure or, in some cases, provide more elegant and rigorous discussion when you find the lectures too pedestrian.

            The primary emphasis of this course will be on the stationarity, or linear process, approach to dynamic models. The Markov process, control theory, or state space approach which is currently prominent in the engineering literature will be discussed briefly under topics V and VII.

            The latter parts of the course will apply the theory developed in the first parts to formulating and testing dynamic economic models or hypotheses. Some background in economics is therefore essential to participation in the course. The mathematical prerequisites are a solid grasp of calculus, a course in statistics, and an ability to absorb new mathematical notions fairly quickly.

            The course text is Spectral Methods in Econometrics by Gilbert Fishman. Spectral Analysis by Gwilyn M. Jenkins and Donald G. Watts is more complete in some respects, but it is less thorough in its treatment of some points important in econometrics and it costs three times what Fishman costs. A list of other texts which may be referred to in the accompanying course outline or in future outlines and reading assignments follows. Some of these texts are at a higher mathematical level than is required for this course or cover topics we will not cover in detail. Those texts which should be on library reserve are marked with a “*”, and those which are priced below the usual high prices for technical texts are marked with a “$”.

List of Text References

* Ahlfors, Lars, Complex Analysis, McGraw-Hill, New York, 1953.

Acki, Max., Optimization of Stochastic Systems, Academic Press, 1967.

* Deutsch, Ralph, Estimation Theory, Prentice Hall, 1965.

* Fellner, et.al., Ten Economic Studies in the Tradition of Irving Fisher, Wiley, 1967.

* Freeman, H., Introduction to Statistical Inference, Addison-Wesley, 1963.

Granger, C.W.J., and M. Hatanaka, Spectral Analysis of Economic Time Series, Princeton University Press, 1964.

Grenander, U., and M. Rosenblatt, Statistical Analysis of Stationary Time Series, Wiley, 1957.

Grenander, U., and G. Szego, Toeplitz Forms and Their Applications, University of California Press, 1958.

*$ Hannan, E.J., Time Series Analysis, Methuen, London, 1960.

$ Lighthill, Introduction to Fourier Analysis and Generalized Functions, Cambridge University Press.

Rozanov, Yu. A., Stationary Random Processes, Holden-Day, 1967.

*$ Whittle, P., Prediction and Regulation by Linear Least-Square Methods, English Universities Press, 1963.

*  *  *  *  *  *  *  *  *  *  *  *  *  *

Preliminary Course Outline
Fall 1968

Economics 224a
Asst. Prof. C. Sims

0. Elementary Preliminaries.

Complex numbers and analytic functions, definitions and elementary facts. Manipulation of multi-dimensional probability distributions.

The material in this section will not be covered in lectures. A set of exercises aimed at testing your facility in these areas (for your information and mine) will be handed out at the first meeting.

References: Ahlfors, I.1, I.2.1-2.4, II.1; Jenkins and Watts, Chapters 3 and 4 or the sections on probability in a mathematical statistics text, e.g. Freeman, part I.

I. Stochastic Processes: Fundamental definitions and properties.
  1. Definitions:

stochastic process;
normal (stochastic) process;
stationary process;
linear process; — autoregressive and moving average processes;
covariance stationary process.
autocovariance and autocorrelation functions
stochastic convergence — in probability, almost sure, and in the (quadratic) mean or mean square;
ergodic process — n’th order ergodicity, sufficient conditions for first and second order ergodicity.
process with stationary n’th difference
Markov process

  1. Extensions to multivariate case.

References: Fishman, 2.1-2.5; Jenkins and Watts, 5.1-5.2.

II. Background from Mathematical Analysis
  1. Function spaces.
  2. Linear operator on function spaces; their interpretation as limits of sequences of ordinary weighted averages.
  3. Convolution of functions with functions, of operators with functions; discrete versus continuous time.
  4. Measure functions; Lebesgue-Stieltjes measures on the real line.
  5. Integration; the Lebesgue integral, the Cauchy-Riemann integral, and the Cauchy principal value; inverting the order of integration.
  6. Fourier transforms; of functions; of operators; continuous, discrete, and finite-discrete time parameters; the inverse transform and Parseval’s theorem.
  7. Applications to some simple deterministic models.

References: Jenkins and Watts, Chapter 2. For more rigor, see Lighthill. No reference I know of covers topics 4 and 5 in as brief and heuristic a way as we shall.

III. The spectral representation of covariance-stationary processes and its theoretical applications.
  1. Random measures; the random spectral measure of a covariance stationary process; characteristics of the random spectral measure in the normal and non-normal cases.
  2. The spectral density; relation to autocovariance function; positive definiteness.
  3. Wold’s decomposition; regular, mixed, and linearly deterministic processes; discrete and continuous component in the spectral measure; example of non-linearly deterministic process; the criterion for regularity with continuous spectral density.
  4. The moving average representation; criteria for existence of autoregressive representation.
  5. Optimal least squares forecasting and filtering.
  6. Generalized random processes.
  7. The multivariate case; cross spectra.
  8. Applications to econometric models.

References: Fishman, 2.6-2.30; Jenkins and Watts, 6.2 and 8.3: For a much more abstract approach, see Rozanov, chapters I – III.

IV. Statistical analysis using spectral and cross-spectral techniques.

V. Regression in time series.

VI. Seasonality.

VII. Estimation in distributed lag models.

Source: Harvard University Archives. Papers of Zvi Griliches, Box 123. Folder “Econometric Methods 1968-1982.”

Image Source: Christopher A. Sims ’63 in Harvard Class Album 1963. From the Harvard Crimson article “Harvard and the Atomic Bomb,” by Matt B. Hoisch and Luke W. Xu (March 22, 2018). Sims was a member of the Harvard/Radcliffe group “Tocsin” that advocated nuclear disarmament.

Categories
Carnegie Institute of Technology Chicago Economist Market Economists Harvard M.I.T.

Chicago. Three casual letters from Cambridge, Mass. regarding young talent, 1957-59

 

In the three letters to Theodore W. Schultz transcribed for this post we witness the old-boy network at work in Chicago’s search for young talent.  Mason and Harris from Harvard share the enormous respect that Harvard Junior Fellow Frank Fisher had won from the senior professors there.  Evsey Domar hedges somewhat in his assessment of Robert L. Slighton but more or less places him in a spectrum running between Marc Nerlove and Martin Bailey closer to the latter. Other now familiar (and less familiar) names are tossed in for good measure.

____________________________

HARVARD UNIVERSITY
GRADUATE SCHOOL OF PUBLIC ADMINISTRATION

Office of the Dean

Littauer Center
Cambridge 38, Massachusetts

December 27, 1957

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago, Illinois

Dear Ted:

In addition to [John] Meyer, [James] Henderson and [Otto] Eckstein, I would also name Franklin Fisher and Daniel Ellsberg as among our really promising young men. Fisher and Ellsberg are, at present, both junior fellows. Fisher is something of a wunderkind, having graduated summa cum laude from Harvard at the age of 18. He published a mathematical article on Welfare Economics when he was a senior, and those who can understand it say it’s good. He is only 20 now, and, of course, it is difficult to say how he is going to turn out. He may be another Paul Samuelson, and on the other hand he may not. Ellsberg is another one of our summas and a very good man, indeed. I don’t think he measures up to John Meyer, but is probably in the Henderson and Eckstein category. Since I promised you six names, I will add that of [???] Miller who came to us this year from California. I have really seen nothing of him, and consequently, can no give you a first-hand judgement. My colleagues, however, think he is very good.

With best wishes, I am

Sincerely yours,
[signed] Ed
Edward S. Mason
Dean

ESM:rrl

____________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Office of the Chairman

M-8 Littauer Center
Cambridge 38, Massachusetts

January 5, 1959

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

It was good to see you even though it was for a very short period. As you know, we include on our list of available men only those who have requested to be put on the list or who have given us their permission to have their name included in the list. It represents men who are either already Ph.D.’s or will receive their Ph.D. within the year, and who are actually available for the coming year.

[Daniel] Ellsberg will be getting his Ph.D. this year, but he is going to Rand at a salary of about $10,000. [Franklin] Fisher will not have his Ph.D. until June 1960. He is just out of college three years and has been offered an assistant professorship at Carnegie Tech. We have now promised him a similar appointment, and in fact he said he would prefer to be at Harvard.

Among other young men of talent who are now here but are not on our permanent roster are the following: Leon Moses who teaches half time in the department and does research with the [Wassily] Leontief project half time. There is a good chance that Moses will go to Pittsburgh, particularly in order to work on the metropolitan project with [Edgar M.] Hoover. Moses is an excellent man in every way and certainly of permanent quality: the same holds for Alfred Conrad who is in somewhat the same position as Moses. Incidentally, both of them have a leave for next year: There is also André Daniere who will be an assistant professor next year and who works primarily with Leontief. Daniere is another good man, though probably not quite as good as the others.

Then there are Otto Eckstein, James Henderson, Jaroslav Vanek and Louis Lefeber. They are all excellent men and in the running for a permanent appointment. Actually, during the next few years we will have but one or two openings and obviously we cannot keep all these men. There is little to choose among them and we will have a tough time making a decision. Please keep this in the highest confidence.

With kind regard, I am,

Sincerely yours,
[signed] Sey
Seymour E. Harris
Chairman

SHE/jw

____________________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Department of Economics and Social Science

Cambridge 39, Massachusetts

January 14, 1959

Professor Theodore W. Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

Your letter of January 6, regarding [Robert L.] Slighton is not quite easy to answer. I do not know [Daniel] Elsberg [sic] or [Franklin] Fisher well enough to make comparisons, but I will try to compare Slighton with [Martin J.] Bailey and [Marc] Nerlove. From the point of view of statistical and mathematical ability, Nerlove stands in a class all by himself, and I do not think that Slighton’s comparative advantage is in those fields. As far as Bailey is concerned, he may have flashes of ideas at times superior to Slighton’s. On the other hand, I would credit Slighton with greater solidity, more common sense and better judgment. As far as long-run contributions are concerned, I don’t know on whom of the two I would bet at the moment, but Slighton would be a serious contender in any such betting.

Lloyd [Metzler]’s session went quite well. He was greeted by the audience most warmly and was pleased about the whole works very much. I am very happy that that meeting was arranged and that I could participate in it.

Please let me know if you need any additional information.

Sincerely yours,
[signed] Evsey D
Evsey D. Domar

EDD:jr

Source:  University of Chicago Archives. Department of Economics, Records. Box 42, Folder 9.

Categories
Chicago Economics Programs Northwestern

Northwestern. Robert J. Gordon selling Graduate Economics Program, 1977

 

The following soft-smile-hard-sell advertisement directed to potential applicants for the graduate economics program at Northwestern University was found in the economics department records of M.I.T. These notes were written by M.I.T. Ph.D. (1967) Robert J. Gordon who was then serving as the director of graduate admissions in economics for Northwestern in 1977-78. Gordon had been appointed professor of economics at Northwestern in 1973. This document provides a fascinating comparative glimpse of economics programs and locations as seen at that time.

Pro-tip:  Robert J. Gordon has shared his personal archive of “Photos of Economists”  on-line.

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INFORMAL NOTES ON GRADUATE ECONOMICS AT NORTHWESTERN

Robert J. Gordon
Director of Graduate Admissions in Economics, 1977-78

To supplement the rather formal compilation of admissions and degree requirements contained in the pamphlet “Graduate Program in Economics, 1977-78”, I have put together a more informal set of observations on economics and graduate student life at Northwestern. Just as television commercials are no longer inhibited in naming competitors, I have included a few comparisons between Northwestern and some of the other departments to which you may be planning to apply. My comments on other departments are entirely personal based on my years as a student or faculty member at Harvard, M.I.T., and Chicago, and on the academic “grapevine” as regards other schools. In no sense do these subjective comparisons represent an “official view” of anyone in the administration of the Department of Economics or Northwestern University, nor would my colleagues necessarily agree with them.

I. WHO SHOULD APPLY TO NORTHWESTERN?

Universities in the United States are currently awarding roughly 2,000 M.A.’s and about 850 Ph.D.’s in Economics every year. Taking account of voluntary and involuntary dropouts, this suggests that about 2,500-3,000 candidates enter graduate school in Economics every year, and that the number of applicants is even larger. Both the applicants and the graduate schools are diverse in quality, and the admissions process can be described as an exercise in “matching” wherein the best schools attempt to select the best candidates, the next-best schools attempt to find the next-best candidates, and so on down the line. As long as a fee is charged for an admission application (currently $25 at Northwestern), potential applicants must carry out what economists call a “cost-benefit” analysis when deciding how many and which schools should be applied to. Too many applications may waste fees, but too few applications may lead to unanimous rejections. The best strategy is to realize that admissions committees are imperfect judges of your own “true quality”, and in some cases you also may over- or underrate yourself. To protect yourself against mistakes, it is best to apply not only to schools at your own perceived quality level, but also somewhat above and below. (In a recent survey 57 percent of the respondents rated themselves in the top ten percent of their class!)

Rating Department “Quality”

While a number of different characteristics are relevant to the final choice, faculty quality is the most important single criterion by which alternative graduate programs should be judged. Among the advantages provided by faculty members who are widely regarded in the profession as among the best in their field are not only correct and current courses, but also guidance in Ph.D. dissertations and knowledge of the most promising areas for student research, the ability to win research grants which in most cases provide funds for student research assistantships, and finally, widespread professional contacts to aid students in the job market.1

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1By the way, there is currently no problem in finding jobs after graduate school in Economics. This contrasts with other disciplines, particularly the humanities, history, and sociology, where jobs are scarce and some Ph.D.’s are unemployed. The healthier job market in Economics is explained by the large demand for Ph.D. economists in business and government which supplements the demand by colleges for teaching posts.

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The already high quality of the Northwestern faculty has been supplemented in the last few years by the arrival of three new full professors who are both relatively young and are regarded as among the top economists in their respective fields—Marc Nerlove (winner in 1969 of the American Economic Association’s John Bates Clark award for the best American economist under the age of 40), Frederick Scherer, and myself. Since the most recent official survey to determine the ranking of Northwestern relative to other economics departments is more than five years out of date, there is no accurate information available which is both objective and current.

As a substitute I can provide the results of my own subjective but detailed evaluation, which is current as of Fall 1976 (e.g., it takes account of the movements of J. Stiglitz from Stanford to Oxford and Michael Rothschild from Princeton to Wisconsin). In consultation with several highly regarded economists, all permanent faculty members in the top 18 U.S. departments have been rated with a “quality score” ranging from one (low) to 10 (superman), and the total scores in each department of the faculty members rating “5” or above have been added up.2 An attempt has been made to include members of business schools known to play a major role in graduate economics education. For most departments official faculty lists have been obtained to insure completeness.

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2Note that this technique gives a premium to large departments, partially explaining the “victory” of Harvard over M.I.T.

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Department

Rating Points

Citations3

1.

Chicago 152 (1574)
2. Harvard 147

(1472)

3.

M.I.T. 139 (1241)
4. Yale 122

(598)

5.

Northwestern 97 (401)
6. Princeton 96

(362)

7.

Pennsylvania 93 (509)
8. Wisconsin 85

(587)

9.

Berkeley 75 (420)
9. Stanford 75

(402)

11.

Minnesota 72 (209)
12. U.C.L.A. 70

(344)

13.

Rochester 43
14. Columbia 41

(454)

14.

Maryland 41 (276)
16. Michigan 40

17.

Carnegie-Mellon 38
18. Brown 23

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3Numbers in parentheses are faculty citations in the 1973-74 Social Sciences Citation Index.

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It would appear that there are four departments in the top category, and then a group of “next best” from ranks 5 through 12 which are very close together in total points. If you think rather highly of yourself, it is probably worthwhile to apply to at least one department in the “top four,” but keep in mind that the total number of first-year students in these departments is only about 135 out of the 2,500-3,000 students who enter graduate school in economics each year. Most students will want to apply to one or more of the “next best,” whether they are top students who want a safety valve, or whether they evaluate themselves at “next best,” or whether they think of themselves as “third best” but are willing to take a chance that an admissions committee in the second tier might overrate them.

Comparisons Among Departments

Selection of a choice among the “top four” depends on your abilities and tastes. M.I.T. is almost universally praised for the quality of its faculty, its devotion to the teaching of graduate students, and for its physical facilities, but it can accept only about 35 out of roughly 350 applications, and students without excellent mathematical training will feel left behind. Harvard has a senior faculty which is tops in fame and reputation but which is frequently criticized as aloof and inaccessible not only to students but even to junior faculty members; classrooms and faculty offices are in several buildings with no natural physical focal point for students; but on the other hand the attractions and convenience of Cambridge have appeal. At Chicago the faculty is better at teaching than at Harvard, is much more accessible, and in many fields of economics is more innovative than at M.I.T.; compared to M.I.T. Chicago’s disadvantages are huge first-year classes (55-80 is typical) and the neighborhood (crime is a problem, and also there is much less to do in Hyde Park as compared with Cambridge, so one is dependent on downtown Chicago, which is very difficult to reach by public transportation from Hyde Park at night). I lack personal experience at Yale—the problems which recur in “grapevine” conversations is the physical and social separation between the faculty in the Cowles foundation and in the rest of the departments, the aloofness of many faculty members, and the disadvantages of living in New Haven. On the other hand, some ex-graduate students claim that the Department/Cowles split does not affect them, even if it has disadvantages for faculty members.

How does Northwestern compare with its competitors in the “next best” group? Stanford, Berkeley, and U.C.L.A. are obviously superior in climate but suffer from other disadvantages. Because the Stanford campus is so vast, there is no university shopping district within easy walking distance, and the attractions of Palo Alto are uninterestingly suburban, with the delights of San Francisco 35 miles away and accessible only by car. Berkeley is a much better place to live, both more interesting by itself and closer to San Francisco, but the department itself is large and impersonal, with long corridors of closed office doors, and the mathematical economists are off across the campus in a separate building. Princeton is located in a posh expensive small town 45 miles from New York, which is therefore less accessible than Boston from Cambridge, San Francisco from Berkeley, or Chicago from Evanston. Pennsylvania is located in a relatively unattractive section of Philadelphia and faculty houses are widely dispersed (as is true at Harvard and M.I.T.), which inhibits the faculty from lingering after seminars and from giving post-seminar cocktail parties. I lack close familiarity with U.C.L.A., Penn, and Minnesota and won’t cast further aspersions, other than to note that they are all relatively large and impersonal universities.

Northwestern combines a number of advantages—a high-quality faculty which is extremely accessible to students both individually and in group seminars, together with a location which combines the best features of small-town and large-city living. Another significant strength is the relatively prosperous budgetary situation at Northwestern, which is currently allowing the Economics Department to embark on a major program of hiring new tenure and nontenure faulty members. It is likely that by the time current applicants arrive here, the relative ranking of Northwestern’s Economics Department will have risen even higher relative to the many universities which are currently suffering from tight budgets.

 

 II. ASPECTS OF GRADUATE LIFE AT NORTHWESTERN

Courses and Seminars

The Ph.D. program typically takes four years, divided into an initial two-year period devoted mainly to courses, followed by two additional years devoted to attending seminars, finding a thesis topic, and writing the dissertation. There is a single written general examination (“prelim”) in economic theory (three hours for macro and three hours for micro), which most students take after their first year of courses. The process of learning at Northwestern does not consist of rote learning or indoctrination, but rather a process by which the student is first trained in the tools of theoretical, mathematical, and statistical analysis, and then is exposed to the frontiers of economic science and urged to use his tools to help resolve controversies and contribute to the advance of knowledge.

The process by which a student arrives at a dissertation topic generally begins in the second year of class work. Unlike many graduate schools, where the general exam process continues to the end of the second year and sometimes beyond, at Northwestern most students enter the second year of classes with their general exam behind them and can concentrate on finding a special field of interest. Second year classes are usually small enough to allow students to participate actively in discussion and to encourage the faculty both to assign term papers and to read them carefully. Second-year term papers are a “proving ground” where students can experiment with possible thesis topics. Under a new system, students are required to give a paper in a field “workshop” after they are finished taking the courses their primary field sequence.

A formal requirement for admission to Ph.D. candidacy, in addition to the written general examination on economic theory, is an oral qualifying examination on the dissertation, which is usually taken during the third year. The purpose of the exam is to ascertain whether the dissertation topic chosen by the student is feasible. Usually the exam consists of a discussion of a brief written thesis proposal which a candidate submits to the faculty committee of examiners.

At many graduate schools there is no formal program for third and fourth year students, who simply “disappear” in the library or their homes and are unavailable for conversation and consultation with each other. At Northwestern, on the other hand, there is an active workshop program to provide forums where graduate students are exposed to new ideas and have a chance to see each other regularly. A centerpiece is the Tuesday night student- faculty seminar, where students present both early and finish versions of their dissertation research, with a substantial cross-section of the faculty attending regularly to provide advice and criticism. Research seminars in macroeconomics and labor, in applied micro economics, industrial organization and in mathematical economics (in collaboration with faculty members at the Graduate School of Management) meet regularly for presentation and discussion of papers by faculty, students, and visitors. These seminars are not only a major channel of communication between faculty and students, but are also an important method of intellectual interchange among faculty members. In addition, there is a regular visiting speakers program, in which well-known faculty members from other universities are invited to Northwestern to present talks on their research Evanston’s location also facilitates additional informal seminars by visitors who are traveling through the Chicago area.

Particular Strengths

Although the Economics Department teaches graduate courses in all of the major fields of economics, it has particular areas of strength in which faculty members are currently making a major research contribution:

Microeconomic Theory
Mathematical Economics
Econometrics
Theoretical and Applied Macroeconomics
Labor Economics
Public Finance
Managerial Economics and Industrial Organization
Transportation and Urban Economics
Economic History
Medical Economics
Economics of Population and the Family

Faculty and Student Accessibility

Faculty-student contact is unusually good at Northwestern for a number of reasons. Although the classes in economics theory in the first quarter are fairly large, since some management school students are required to attend, for the remaining two quarters of the first year the theory classes typically contain only 25. Second-year class enrollments are often in the range of 5 to 10, allowing a workshop atmosphere and considerable faculty attention to the individual student term papers and research projects. Most of the faculty live close to the Evanston campus and typically hold open cocktail parties in their homes after seminars by visiting speakers. After the Tuesday night faculty-student seminar, both students and faculty regularly adjourn to a local pub (this never happens at M.I.T., Harvard, or at other departments where faculty residences are located in distant suburbs). Many third-and fourth-year students have offices adjoining faculty offices and see their faculty neighbors regularly during coffee breaks. Another advantage promoting easy interaction is the relative youth of many of the tenured faculty, in contrast to the older “stars” at some other departments who spend more time consulting in Washington than talking to their students.

Easy contact among students is even more important than faculty-student contact in the first year, when students need to get to know each other and form into small study groups. This is facilitated at Northwestern by a graduate student lounge in the basement of 1922 Sheridan Rd. (the main economics building), where coffee is available and students are encouraged to study or talk between classes. Another convenience is the Library, completed in 1970 and about a 3-minute walk from the main department building. A special feature of the uniquely designed library is the divisional arrangement of books and journals in three research towers, one for the social sciences. On each of the circular levels of the research towers, ranges of books in specialized journals are placed in a radial pattern. At the periphery of each circle surrounding the collections is a repeating series of carrels, typing rooms, graduate and faculty studies, and seminar rooms in close proximity to the main body of printed materials needed by the various disciplines. (The computer center is also a great advantage, as it is relatively well-run and provides fast 15-20 minute “turnaround time” except in peak weeks at the end of the quarter).

Faculty and Courses in the Graduate School of Management

Although other universities also have business schools, of course, Northwestern’s provides a particular asset because of its unusual orientation toward economics and because of the unusually close contact between members of the Economics Department and the Management School. Economics topics covered in Management School courses include optimization theory and techniques, decision-making under uncertainty, models of production and technology, models of financial decision-making, and others. Management School courses are open to economics students, and dissertation committees often include Management School members.

Research Centers

Several “centers” headed by Department faculty members support and encourage research in their areas, provide offices and secretarial help, and arrange seminars by resident faculty, students, and visitors. Research Centers have been established in mathematical economics, transportation economics, and urban affairs.

 

III. ADMISSIONS AND FELLOWSHIPS

The formal admissions procedure is described in the “Graduate Program” pamphlet. Prospective applicants should note that they are required to submit scores from the Graduate Record Examination only for the verbal and quantitative aptitude tests and not for the advanced test in economics. This is consistent with our desire to encourage applications from those who have not chosen to major in economics as undergraduates. Our interest is in finding motivated, intelligent students with enough quantitative aptitude to understand economics theory and enough curiosity about the world around them to do creative economic research.

All available criteria are used by the Admissions Committee (myself and a few colleagues) to evaluate each applicant — undergraduate grade record, letters of recommendation, the applicant’s score on the Graduate Record Examination, and special factors. No arbitrary boundaries are established for grades or GRE scores. Applicant should encourage those writing letters of recommendation to be as specific as possible, a process which can be facilitated if applicants confer with the letter writers regarding their strengths and weaknesses. Applicants who have any unique qualifications or wish to explain “soft spots” in their grade record are encouraged to file supplementary statements with their applications.

Since first-year calculus is essential and second-year calculus is extremely useful for the study of economics, prospective applicants who have not yet taken these courses for credit are urged to do so at some time between now and their arrival at graduate school (wherever they choose to attend). The summer before arrival is an excellent time to take an extra course, and second-year calculus should receive top priority.

The selection of fellowship winners—for both university and department fellowships—is made by the Admissions Committee shortly after the admissions decision. A number of fellowships are also available under a Rockefeller-sponsored Northwestern Program in the Economics of Population and Household Behavior. To maximize their chances of receiving support, applicants are urged to apply for several of the fellowships awarded by outside foundations, businesses, and government agencies. Do not despair if you do not receive the fellowship, for there are several other alternatives. Most obvious is the student loan program, through which students can borrow money to cover most or all of their tuition (for details, see the Northwestern Graduate School Catalog). A substantial portion of the loan funds is available at three percent interest, which in these days of inflation represents a negative “real” rate of interest. Remember also that inflation reduces the real value of the principal to be repaid. Other sources are part-time academic year jobs, research assistantships for faculty members (usually reserved for students in the third and fourth year), and support from parents and/or spouse (now that women have been liberated, the Ph.T. Degree—“putting hubby through”—has been supplemented by the Pw.T,—“putting wife through”). We do not at present normally award teaching assistantships to first-year students.

 

IV. LIVING IN EVANSTON AND CHICAGO

Evanston

Evanston is the first suburb north of Chicago along Lake Michigan, and the Evanston-Chicago boundary is located 9.5 miles north of the Chicago “Loop.” Despite its proximity to Chicago, Evanston’s aesthetic attractions are immediately apparent when one crosses north over the city line. All of it streets are lined with unusually grand old shade trees; street lights are old-fashioned; the downtown shopping area is free of overhanging neon signs and decorated by city-maintained flowerbeds; and the lakefront is lined with the bicycle path, parks, and beaches where swimming is safe in unpolluted water.

With a population of about 80,000, Evanston is about the same size as Berkeley and Cambridge and shares their advantage of combining the convenience and call of a relatively small self-contained city with the entertainment and cultural attractions of a large urban center. Its residents include not only students and professors, but also sizable numbers of lawyers, architects, and other professionals who help to support groups and organizations in music, politics, and other areas. Student housing is available both in private and university-owned buildings (see the Graduate School Catalog for details), and most students are able to live within a short walk or bicycle ride from Northwestern’s lakefront campus.

Evanston’s downtown shopping area begins immediately south of the campus, with a group of books stores located across the street from the main university administration building. Shopping opportunities are unusually diverse for a city of Evanston’s size, with several branches of downtown department and specialty stores, large supermarkets and small “gourmet” food shops, and a variety of shops selling both standard and esoteric clothes, furnishings, and other items.

Transportation within Evanston is easy whether or not students own cars. Parking is available on side streets and in public parking garages downtown. Since most side streets are relatively free of traffic, many students prefer to rely entirely on bicycles for travel within Evanston. The public transit fare is subsidized by the City Council at 25¢ for travel within Evanston on four bus lines and on the rapid transit stations which shuttle at five-minute intervals along a north-south axis which skirts the western boundary of the campus and continue south to the Chicago border and on to downtown Chicago  (see below).

Many Evanston residents formerly lived in the Hyde Park and South Shore districts of Chicago—adjacent to the University of Chicago—but moved north to escape the South Side crime problem. Evanston is fortunate in its low crime rate, less than half the rates recorded in Berkeley and Cambridge in the 1970-73 period, and is a place where both students and faculty feel perfectly free to walk out at night. The only noticeable disadvantage of life in Evanston is the climate between November 15 and March 15, when the average daily high-temperature is about 35 degrees (i.e., five degrees colder than New York). Average annual snowfall is a bit more than in New York and a bit less than in Boston. The weather during the rest of the year similar to that in the northeastern quadrant of the U.S. Over all the weather is obviously no match for Berkeley, about the same as Boston and decidedly better than Madison or Minneapolis.

Chicago

From the Northwestern campus the center of Chicago is 25 minutes by car via Lakeshore Drive, and is almost easily accessible via rapid transit trains which stop twice at the western edge of the campus and reach the “Loop” in 30 minutes during rush hours, and about 40 minutes at other times. These times overstate the duration of travel to many restaurants, theaters, and clubs, the majority of which are located on the North Side of the city, i.e., between the “Loop” in the Evanston border. Trains run all night, and at most hours their frequency is every five to ten minutes.

Until six years ago I had never been to Chicago and had an irrational fear of the unknown Midwest, which may be shared by some prospective applicants from the East and West Coasts. My years of sampling Chicago’s attractions have converted me, and perhaps you will be interested in some personal opinions and comparisons:

    • The main aesthetic attractions are (1) the Loop and Near North Side, containing some of the best urban architecture in the world, in (2) the 20-mile bicycle path along the lake front, which is a continuous band of parks, beaches, and yacht harbors.
    • The major museums are all very large and among the top two or three in the country, including the Art Institute, the Field Museum of Natural History, the Planetarium, the Aquarium, and the Museum of Science and Industry, the latter having special appeal for any economist interested in the history of technical change and in “how things work.” There are smaller art galleries as well, and a local “school” of modern art, which I saw exhibited in Mexico City as “La Nueva Escuela de Chicago.”
    • In New York visiting concerts of Georg Solti with the Chicago Symphony have become, according to the New York Times, the “most eagerly anticipated musical events since Toscanini.” The Symphony plays three concerts a week during the academic year at Orchestra Hall in the “Loop” and frequent concerts during the summer at the Ravinia Festival in a suburb a few miles north of Evanston. The Lyric Opera presents a three-month season in the fall and shares with San Francisco the top rank among US opera companies outside of New York. There are several local chamber music groups and a long list of touring concert artists, including the major New York ballet companies, which perform throughout the year. There are also three full-time FM classical music stations.
    • The “club scene,” both night clubs and coffee houses, is unsurpassed among cities outside of New York, and the blues and folk music offerings surpass New York. Each Friday a free newspaper, the Reader, lists about 150 blues, folk, rock, and jazz acts appearing in local clubs.
    • Speaking of newspapers, the Chicago Tribune has dropped its conservativism of the Col. McCormick days and was recently named one of the country’s 10 best by Time. Its local news and features are excellent, although it still can’t compare for national and international news with the New York Times (the latter is flown in daily for purchase at Evanston newsstands or for home delivery).
    • In the restaurant category Chicago ranks after New York, San Francisco, and perhaps New Orleans. Its best are not as good as in those three cities, but that doesn’t matter much for students who can’t very often afford $50 French dinners. More important and interesting is Chicago’s strength, the hundreds of inexpensive “storefront ethnic” restaurants, many of which are in the north part of Chicago close to Evanston. Take your choice among German, French Provincial, East European Italian, Cantonese, Mandarin, Korean, Thai, Japanese, Indian, Mexican, Cuban, and Peruvian.
    • Cheap entertainment is available at the student-run film societies at Northwestern, other colleges, and the Art Institute, and at a number of commercial theaters on the north side of Chicago which only charge $.75 or $1.00 for a double bill of second- or third-run features.
    • While the quantity of live drama is no match for New York, there is a surprisingly broad offering by two accomplished professional repertory groups, a number of “off-Broadway” and experimental groups, and both pre- and post-Broadway touring shows. In recent years a number of shows have “graduated” to New York after starting here.

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Obviously the preceding notes will only begin to answer your questions. Write me for any additional information you need. I’ll respond without delay if I know the answer or else I’ll find a colleague who can advise you. I can also arrange for a current graduate student to provide more information on student reactions.

 

Source: M.I.T. Archives. Records of the Department of Economics. Box 3, Folder “Quality Rating.”

Image Source: Robert J. Gordon at First Bank of Japan Monetary Conference, June 1983. Detail from picture with James Tobin.

 

 

 

 

 

 

 

 

 

 

 

Categories
Chicago Exam Questions Suggested Reading Undergraduate

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

 

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

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

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Course Announcement and Description

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

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

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Text for Economics 230:

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

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

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Economics 230
Autumn 1947
Library Book List

Robertson, D. H. Money

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

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

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Economics 230
Autumn 1951

Supplementary Readings and Problem for Reading Period

Readings

Text: Lester Chandler, Economics of Money and -Banking

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

 

Problem

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

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

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

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Economics 230
Midquarter Examination
November 5, 1948

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

 

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

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

Part I

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

Part II

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

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

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

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

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

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

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FINAL EXAMINATION, ECONOMICS 230, FALL, 1947

Part I

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

 

Part II

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

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

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

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

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

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Economics 230
Final Examination
December 16, 1949

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

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

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

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

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

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

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

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

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

 

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

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

  1. (50 points)

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

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

 

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

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

 

 

Categories
Chicago Economists Johns Hopkins

Johns Hopkins. Memories of Chicago Economics Ph.D. Alumnus and JHU professor Carl Christ, 2017

 

Sometime in the second half of the 1980’s, when my stock as an expert on the economy of the German Democratic Republic was reasonably high and the future fall of the Berlin Wall was still sufficiently somewhere over the rainbow, the President of the Johns Hopkins University (Stephen Mueller) apparently hoped enough to attract me to the young American Institute for Contemporary German Studies of Johns Hopkins in some capacity to have the economics department of the university invite me to present a seminar and talk with colleagues there. Knowing now just how excited departments can be about suggestions coming from the university administration regarding potential appointments, I should have gone into this campus visit with low expectations. 

As it turned out my host for the visit was the senior professor Carl Christ who was the proverbial gentleman and a scholar. He was an engaging and sympathetic mensch with broad interests. From that time I have read with delight his accounts of the Chicago years of the Cowles Commission. He struck me as a scholar you could trust.  I was introduced to his colleague Peter Newman who, if memory serves me correctly,  joined us for lunch. Come to think of it, for my latent interest in the history of economics, I could have hardly had a much better day.

However the story of my day with the Johns Hopkins department of economics would be incomplete without admitting that the seminar did not go well…for me. It was the first time in my (hitherto sheltered) academic life that I was mawled by a pit-bull seminarian over a point that was quite important for his c.v. but of third-order importance for the results of my paper. In any event, there was no further contact one way or another with the Johns Hopkins economics department after that.

My positive impressions of Carl Christ survived and I am delighted to share what I have found out about the life and career of the this fine specimen of  a 1950 University of Chicago economics Ph.D. Note:  “Although his economic training was in the ‘Chicago School,’ he never believed that economic efficiency was a higher goal than social justice,” wrote a daughter, Alice Christ of Lexington, Ky.”

The previous post provides his reading lists for a sequence of econometrics courses he taught at the University of Chicago in 1957.

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Obituary
May 3, 2017

Longtime JHU Economist Carl Christ dies at 93

Carl Christ, Professor Emeritus in the Department of Economics at Johns Hopkins University, passed away on April 21, 2017. Professor Christ was born on September 19, 1923 in Chicago and graduated from the University of Chicago Lab School. He earned his BS in Physics from the University in Chicago in 1943 and his Ph.D. in Economics from the same institution in 1950. He worked as a Junior Physicist on the Manhattan Project in Chicago from 1943 to 1945 and was an Instructor in Physics at Princeton University from 1945 to 1946, after which he enrolled in the graduate program in the Department of Economics at the University of Chicago. He was a Research Associate at the Cowles Commission at Chicago from 1949-1950. He moved to the Department of Economics at Johns Hopkins in 1950, where he served on the faculty until 1955, when he moved back to the Department of Economics at the University of Chicago, where he served as Associate Professor from 1955 to 1961. In 1961, he returned to Johns Hopkins as Professor, where he remained until he retired in 2005 and assumed Emeritus status.

Carl Christ had a distinguished record of scholarship across multiple topics. His interests ranged from econometric methods, especially the testing and evaluation of econometric models, to monetary and fiscal policy and to the history of econometrics. His work on macroeconometric models was rooted in the Cowles Commission tradition of structural econometric models based solidly on economic theory and careful attention to identification, endogeneity, and consistent and efficient estimation. He wrote a seminal paper on the forecast error variances from those types of models and on their sensitivity to model specification. He authored a widely used introductory econometrics textbook in 1966, Econometric Models and Methods, which popularized the structural econometric approach. The textbook was translated into several languages. In the area of monetary and fiscal policy, his major contribution was a deep incorporation of the federal budget constraint in all its dimensions–fiscal, monetary, reserves, debt, and so on–into macroeconometric models, which had inadequately incorporated those features prior to his work. He showed that policy multipliers were very different when the budget constraint was properly modeled. His interest in the history of econometric methods was also strong, and he wrote a history of the Cowles Commission during its first 20 years which was published in 1952, an expanded version of which appeared in the Journal of Economic Literature in 1994, and he wrote a history of the founding of the Econometric Society as well as several other pieces on the history of quantitative analysis. He was a student and admirer of Tjalling Koopmans and, with Martin Beckmann and Marc Nerlove, edited the Scientific Papers of Koopmans. A symposium in his honor where papers relating to his research were presented was held at Johns Hopkins in 1995 and was published in the Journal of Econometrics in 1998.

Christ served in numerous professional and department capacities during his career. He served in multiple capacities of the American Economic Association, including serving as Vice President, serving on its Executive Committee, chairing several other committees, and serving on the Editorial Board of the American Economic Review. He served in numerous roles for the National Bureau of Economic Research, including service as a Member, Vice Chair, and Chair of its Board of Directors. He served on the Council of the Econometric Society and in several other capacities for the Society. He was an elected Fellow of the Econometric Society and the American Statistical Association and received many other citations and awards. At Johns Hopkins, he served as Chair of the Economics Department twice, from 1961 to 1966 and from 1969 to 1970. He also served on numerous university committees throughout his career and into his time as Emeritus Professor. The Department of Economics at Johns Hopkins has a named professorship as well as a named graduate student fellowship in his honor.

He is survived by his wife of 66 years, the former Phyllis Tatsch.

 

Source:   Johns Hopkins University Department of Economics Website. “Longtime JHU Economist Carl Christ dies at 93”.

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IN MEMORIAM
Published Apr 25, 2017

Longtime Johns Hopkins economist Carl F. Christ dies at 93
Trailblazing expert in field of econometrics specialized in fiscal policy and government budget restraint, spent more than 40 years at JHU

by Jill Rosen

 

Carl F. Christ, a distinguished economist whose career at Johns Hopkins University stretched more than 40 years, including two stints leading his department, died Friday. He was 93.

Christ was a trail-blazer in the field of econometrics, where statistical analysis puts economic theories to the test. In the late 1960s he wrote one of the first textbooks on the subject, a book that became a standard text used for decades in economics courses worldwide. Much later, in 1998, the Journal of Econometrics honored him with a special issue, a collection of articles by “friends, colleagues, and professional admirers of his life’s work,” that praised his contributions, his influence, and the “beauty” of his analytical work.

Christ, born in Chicago, graduated in 1943 from the University of Chicago, where his father was on the faculty of the business school. He did not initially pursue economics, but physics, teaching it at Princeton and working on the Manhattan Project, a research effort during World War II that led to the creation of nuclear weapons.

But Christ realized he wanted to use his mathematics ability to help the world in a different, more peaceful way. He once told the News-Letter, “During World War II, I lived in a house full of pacifists while I was working on the atom bomb. I then wanted to do something that had to do with human problems.”

“He wanted to do more good in the world,” said his daughter, Lucy Smith. “He wanted to be constructive and he saw economics as the path to do that.”

After returning to school and earning a PhD in economics from the University of Chicago, Christ joined the faculty of Johns Hopkins in 1950, where he stayed for most of the rest of his career, except for a six-year stint at the University of Chicago.

In addition to pioneering the use of computers to test econometric models, Christ’s niche was monetary and fiscal policy, especially government budget restraint. He is the author of four books, editor of one, and has more than 40 articles in journals and books, as well as more than 60 other publications.

“He was one of the greatest macro econometricians of the 1950s and 1960s,” said Johns Hopkins economist Robert Moffitt. “He worked on the first wave of econometrically-based macroeconomic models of the economy developed at the Cowles Foundation at the University of Chicago, and became a leading authority in the economics profession on their estimation.”

Students at Johns Hopkins chose him to win the George E. Owen Teaching Award in 1985, an award for outstanding teaching and devotion to undergraduates.

In 2008, when the university established a named professorship in his honor—the Center for Financial Economics’ Carl Christ Professorship—his colleagues described it as an honor for “the legacy of a man who has been an inspirational teacher and mentor to generations of Johns Hopkins students.”

Johns Hopkins economics professor emeritus Louis Maccini, who Christ hired, said Christ always had time for junior colleagues and students, ready with constructive criticism and good advice.

“When he hired me he was a very distinguished scholar, and I appreciated how I could talk with him and get sensible advice—passed on as if I was his equal,” Maccini said. “I tried to model myself after him in that regard.”

Beverly Wendland, dean of JHU’s Krieger School of Arts and Sciences, also recalled Christ’s dedication to the university.

“A renowned economist who was beloved by both his students and faculty colleagues, Carl was instrumental in making our Department of Economics the standard-bearer that it is today,” she said.” He will be remembered, not only for his pioneering work in econometrics, but for his love and dedication toward Johns Hopkins.”

Christ was passionate about the university community, joining numerous efforts and boards, and even appearing in a few Johns Hopkins theatrical productions. He was a devoted member of “The Oldtimers,” an informal club for retired faculty and staff.

“He held the thing together,” said Matt Crenson, a Johns Hopkins political scientist and an Oldtimer. “He planned meetings, he made reservations, he discussed the menu, and he sent out notices—I hope we’ll be able to survive without him.”

Off-campus, Christ served on the Maryland Governor’s Council of Economic Advisers and helped the Urban League by drafting brochures on financial topics, like how to buy a house with sustainable mortgage payments.

At Roland Park Place, where he lived, Christ joined the investment advisory committee and the hospitality committee. He could also be regularly spotted at the corner of 41st Street, with a “War is not the answer” sign.

In addition to his daughter Lucy, Christ is survived by his wife of 66 years, Phyllis; daughters Alice Christ and Joan Christ; and five grandchildren.

 

Source: Johns Hopkins University, Hub website.

___________________

Obituary
April 26, 2017

Carl F. Christ, noted Johns Hopkins economist
by Frederick N. Rasmussen
The Baltimore Sun

Carl F. Christ, a noted Johns Hopkins University economist whose career spanned more than four decades and who during World War II worked on the Manhattan Project, died Friday of complications from prostate cancer at Roland Park Place.

He was 93.

“Carl Christ was one of the leading figures in the world on macroeconomics and econometrics, and was clearly one of the most distinguished senior faculty members at the time,” said Louis J. Maccini, who retired from Johns Hopkins in 2013, where he had served as chair of the economics department from 1992 to 2007.

“We have been colleagues and friends for almost 50 years, and it was Carl who hired me at Hopkins in 1969,” he said.

“An important ingredient about Carl was that he was a very constructive person, and his comments and opinions were always constructively offered to students and colleagues,” he said. “When I came to Hopkins, he treated me equally as a colleague, and I appreciated that. It was a key element of his personality that he was always helpful and constructive.”

The son of Jay Finley Christ, a professor in the business school of the University of Chicago, and Maud Trego Christ, an educator and suffragette, Carl Finley Christ was born and raised in Chicago and was a graduate of the University of Chicago Laboratories School, a high school. He attended Colorado College for two years.

He was a 1943 Phi Beta Kappa graduate of the University of Chicago, where he earned a degree in physics.

From 1943 to 1945, he worked as a junior physicist for the Manhattan Project, which led to the development of the atomic bomb.

After his wartime work with the Manhattan Project, Dr. Christ decided to use his mathematics acumen to achieve peaceful ends.

“During World War II, I lived in a house of pacifists while I was working on the atom bomb. I wanted to do something that had to do with human problems,” he once told the Johns Hopkins News-Letter.

After serving as an instructor in physics at Princeton University from 1945 to 1946, he returned to the University of Chicago, where he earned a Ph.D. in economics.

“Although his economic training was in the ‘Chicago School,’ he never believed that economic efficiency was a higher goal than social justice,” wrote a daughter, Alice Christ of Lexington, Ky.

He joined the Hopkins faculty in 1950 as an assistant professor and in 1953 was named assistant professor of political economy.

Dr. Christ was a senior Fulbright research scholar at the University of Cambridge from 1954 to 1955.

Dr. Christ left Homewood in 1955 when he became an associate professor of economics at the University of Chicago, where he taught until 1961. He then returned to Hopkins as professor of political economy.

He was department chair from 1961 to 1966, and again from 1969 to 1970, and in 1977 was appointed to the Abram G. Hutzler professorship in political economy.

“Dr. Christ was a trailblazer in the field of econometrics, where statistical analysis puts economic theories to the test. In the late 1960s, he wrote one of the first textbooks on the subject, a book that became a standard text used for decades in economics courses worldwide,” according to a Johns Hopkins news release announcing his death.

The book, “Econometric Models and Methods,” was published in 1966. He was a contributor to the International Encyclopedia of the Social Sciences, Volume IV, which was published in 1968; “Simultaneous Equations Estimation,” 1994; and “Econometrics, Macroeconomics and Economic Policy” in 1996.

In 1998, the Journal of Econometrics honored Dr. Christ with a special issue that contained articles from “friends, colleagues and professional admirers of his life’s work,” and recognized him for the “beauty” of his work.

Dr. Christ also pioneered the use of computers to test econometric models. His field of specialties included monetary and fiscal policy, especially government budget restraint.

“He is particularly interested in what is known as the government budget restraint, which involves the three ways the government can raise funds when it spends money — taxing, borrowing or printing more money,” reported The Baltimore Sun in a 1981 article.

“Dr. Christ conceded that it is impossible to develop an economic theory that describes human behavior as well as scientific theory can describe the behavior of molecules,” according to the article.

In addition to his four books, he wrote more than 40 articles in journals and books, as well as in more than 60 other publications, including The Sun, regarding economic matters.

Dr. Christ was the recipient in 1985 of the George E. Owen Teaching Award, presented by Hopkins students for outstanding teaching and devotion to undergraduates.

His courses on macro- and microeconomics, government financial policy and the stock market were popular among students at the Homewood campus.

In 2008, Hopkins established a professorship in his honor at the Center for Financial Economics.

Dr. Christ began a phased-in retirement in 1989 and fully retired in 2009.

“According to department secretary Donna Altoff, he continued to show an exceptional level of interest in the students, and loved to talk to them and took interest in their job searches until the end,” wrote another daughter, Lucy Christ Smith of Seattle, in an email.

He and his wife of 66 years, the former Phyllis Tatsch, were former residents of Juniper Road in Guilford and moved to Roland Park Place in 2006. He remained active on many university committees and boards and even performed in several theatrical productions at Johns Hopkins and the Hamilton Street Club.

He was an active member of The Oldtimers, an informal club for retired Hopkins faculty and staff, where he planned meetings, discussed menus and sent out notices to the membership.

Dr. Christ served as a member of the Maryland Governor’s Council of Economic Advisers and helped the Urban League by drafting brochures in financial topics with such articles as how to purchase a house with affordable mortgage payments.

At Roland Park Place, he served as a member of the investment advisory and hospitality committees.

He also regularly participated in a weekly protest staged by residents along 40th Street in front of Roland Park Place, where he could be spotted carrying a sign that read “War is not the answer.”

He and his wife were avid catamaran sailors and windsurfers, and since 1933, he had spent summers on Lake Michigan at Williams Grove and Harbert Woods.

Dr. Christ donated his body to the Maryland Anatomy Board, and plans for a memorial service are incomplete.

In addition to his wife and two daughters, he is survived by another daughter, Joan Christ of Seattle; and five grandchildren.

 

Source: The Baltimore Sun, April 26, 2017.

 

___________________

 In Memoriam—Carl Christ (1923-2017)
Comments from Carl Christ’s students, friends and colleagues

From the Department of Economics, Johns Hopkins University webpage:
http://econ.jhu.edu/in-memoriam-carl-christ-1923-2017/

“Carl was a great teacher and mentor. I was delighted that i managed to catch up with him for lunch on my last visit to the US. He had a most significant impact on me and I am sure on so many others. He was what made Hopkins.”

—John Hewson

 

“I was a student of Carl’s in the 1960s. It was an interesting time. Re econometrics, it was a time when it was becoming a more common tool for economists. Carl had just finished his book and was using it in class. I remember complaining about the high word-to equation ratio relative to competing books (by Johnson and by Goldberger). His story was that his book was especially for grown-up economists who needed to learn econometrics on their own and needed more examples and explanations. So it was a book more than a text book.

Three things I still remember that are still important:

  1. He was an early nag about identification- something that faded for a while in the profession, but has come back with a vengeance.
  2. He used to preach that an econometric paper must not only tell the truth and nothing but the truth, but also the whole truth-more appropriate than ever now, in a world of easy data mining.
  3. I recall him once working on a draft of a survey paper on econometrics, and his secretary (there were secretaries then) misread “econometrics” in the title and typed “economic tricks.” He thought maybe that was a better title.

He was both a great scholar and a true gentleman. It is good that he lived so long.”

—Robert Van Order , George Washington University

 

“He was a kind and generous man and as residual claimant served as my thesis adviser for which I am eternally grateful. He may well have been the third or fourth member of the Department to be so engaged.”

—Stuart I. Greenbaum, Prof. Emeritus , Olin Business School, Washington U. STL

 

“Carl was my teacher in the early seventies. I still remember his course vividly. When he started his econometrics course with chapter (7?) on identification stating that the early chapters were background. He also insisted on giving us back his per-book royalty as we all had bought his book.

More recently, Carl invited me to write a piece on Bela Balassa for the New Palgrave Dictionary of Economics which I accepted with pleasure. Even though he did most of the work, he insisted that my name appear first…..

Carl was a great mentor and the life at Hopkins.

When we organized a service for Bela at the Bank, Carl spoke of Bela with great emotion, breaking up in tears when he told us that Bela took the train back to DC to help his daughter with her homework only to come back to Homewood the next morning.”

—Jaime de Melo

 

“Here is another anecdote: when I took Carl’s class in 1992 his book was out of print and Greene (2nd edition!) was the official textbook. However, he lent us copies of his book. He had photocopies for the male students and the original textbook for our female classmates (the rationale was that the hard-copy was lighter to carry than the photocopies).

Like Jim and Bob, I also remember his emphasis on identification and on the economic interpretation of the results. He was a great scholar, teacher, and a true Gentleman.”

—Ugo Panizza

 

“Dr. Christ was my econometrics teacher and Dissertation Advisor in the mid /late 70s. He was amazing. Pieces I remember fondly are

  • His penchant for using every inch and corner of the board before erasing anything… (and side-bets among students about when he’d actually have to bring out the eraser)
  • Carl and Phyllis attending the periodic grad-Department-wide crab outings to Bo Brooks that I organized — with very messy Bay Seasoning-coated hands around red beer cups
  • His being a real person
  • His dedication to swimming / exercise
  • His desire to have people really understand what he was talking about — and instilling in me a real wish to be useful — something that has been a focus ever since.
  • He was my favorite teacher, and a real role model. It was wonderful to know him, and he’ll be missed.

And I use that story about “economic tricks” all the time before speeches I give (:-)).”

—Lisa A. Skumatz, Ph.D Principal , Skumatz Economic Research Associates (SERA)

 

“Many thanks for sending out this very sad notice of the passing of Professor Christ. I had not heard of his passing even though I live in the DC area. He was my econometrics professor at JHU and, although I showed no talent in econometrics, I enjoyed his class very much. He was so enthusiastic in class, and out of class as well. It was really special to see him at the retirement party for Lou Maccini a few years ago.

Professor Christ was a true scholar, and the personification of a great teacher. A truly classy person who, along with several other Hopkins professors, should have received Nobel prizes. I know he will be missed at Hopkins and by many of his former students like me.

Please convey my sincere regrets to his wife.”

—Eileen Mauskopf

 

“I join all of you in expressing my deep gratitude to Carl and in celebrating his life and work. Carl was my professor and thesis advisor (with Bela). I owe them both greatly.

Let me share an anecdote and a comment.

Anecdote. In the late 1960s early 1970s I was an undergrad student of Econ at the Univ of Buenos Aires in Argentina. There was a bookstore in downtown BsAs specialized in imported books on economics, politics, and similar topics… I liked to go there and just look at the books (as a student, my income was limited). One day I was drawn to a green book on econometrics; I felt I had to buy it even though a) it was expensive; b) my econometrics was poor; and c) my English was even poorer to non-existent. Furthermore, I had not heard of the author and I was not planning on leaving my country to study abroad. Still, I bought the book and I carried it with me to the different countries in Latin America and the Caribbean where I lived and worked when I left my country in 1976.

Fast forward several years, and the mystery of why I bought the book was finally revealed: I went to study at JHU, first at SAIS, and then at the Dep of Economics, where, you guessed it, I was the only one in my class with a personal copy of Carl’s famous book. Carl had a good laugh when I told him the story about my (his) book.

Comment. Other colleagues mentioned Carl’s work on identification. I’d like to highlight a related issue: his paper on Pitfalls in Macroeconomic Model Building along with the paper on government budget constraints were two of the most useful applied macroeconomics papers I have ever read. Once I heard someone say that “macroeconomics is national accounting identities plus opinions.” Everybody is entitled to her/his own opinions (on expectations, behavioral issues, market clearing mechanisms, and so on) but Carl made clear that you are not entitled to your own accounting identities, nor can you ignore them. Many policy disasters in developing countries (and some developed ones) happen because policy makers ignore basic double-accounting identities Carl so rightly emphasized (along with the proper matching of independent equations and the number of endogenous variables in a well-specified macro model).

It was a privilege knowing Carl. My thoughts and prayers go out to him, his family, and friends.”

—Eugenio Díaz-Bonilla

 

“Carl Christ’s greatest legacy was far more than celebrated author of “Econometric Models and Methods” – a 10 year undertaking. And far more than several dozen first rate Journal articles. Even more than a first rate teacher willing to tackle undergrad economics courses. It was his very demanding role as a Thesis Advisor par excellence that I consider his greatest Legacy. Demanding his students work to highest standards of scholarship. No matter how long it took. Always willing to read draft after draft with carefully made comments. Carl Christ was a demanding task master. But he was a superb Thesis Advisor and readily accessible. Under his indefatigable energies those of us privileged to be his Thesis students learned the standards of scholarship. It was the greatest of privileges to be his student. His reputation as a sterling Thesis Advisor went well beyond the Hopkins community.”

—Peter I Berman , (1963-67)

 

“I had the honor and privilege to have been Professor Christ’s grad student and TA for the Macroeconomics and Senior Honors Essay. Aside from his outstanding scholarship, I was lucky enough to observe a fantastic and dedicated teacher at work and a wonderful person and humanitarian to boot. Many of us tried and in vain to emulate this role model. When we heard the sad news, some of us were reminiscing about our experiences with Professor Christ.

Not sure how many know this, but beyond the academics, Professor Christ was also an athlete. I recall a sweet and funny anecdote when Kali Rath, Rafael Tenorio and I were teaching at University of Notre Dame in Indiana in the 90’s, and Gabriella Bucci at Depaul University. We received a call from Carl and Phyllis inviting us with our spouses to his summer house at the lake in New Buffalo, Michigan. We arrived at their home and proceeded to walk to the lake, where he wanted to teach us wind surfing. While walking to lake, we were all chatting with Carl and Phyllis when Kali noticed that Carl was casually holding two buckets containing equipment and other stuff for the sailboat etc.. so he insisted that he should help carry at least one. Carl asked “are you sure?” Kali assured him, and so Carl let go of one of the buckets and kept walking to the lake with the rest of us in tow. Suddenly, I realized that Kali was lingering way behind. I went back to ask him the matter and Kali said “Why don’t you try to lift the bucket” I tried and barely managed lift it before dropping it!! It took two of us to lift it and carry it to the lake panting and all, while marveling at how Carl managed to carry two of them and still lead the troops all the way to the lake while carrying on casual conversation with all of us. We had a wonderful day there.

As many others alumni already mentioned, he epitomized what Hopkins is.

He is and will be sorely missed. Deepest sympathies to Phyllis and family and the larger Hopkins one.”

—Ralph Chami , Assistant Director Institute for Capacity Development International Monetary Fund

 

“Dear friends and colleagues,

Carl Christ was a major reason I came to Hopkins. My undergraduate adviser knew his work and my budding interest in econometrics, and recommended that I apply to Hopkins. Little did I know that behind the book-writer was such a remarkable teacher, scholar, and person.

As a teacher, he was instrumental in helping me really understand identification, a concept I had only loosely grasped as an undergrad. His course built a foundation in econometrics that has served a whole generation of Hopkins students well to this day. More broadly than that, his approach to every question or idea in seminars or conversations was couched in terms that students could appreciate.

The depth of his involvement in his field of research was clear. Among other things, he would talk about the inner workings of the various macroeconometric models of the day. With his characteristic smile and a twinkle in his eye, he would relate that the publicized estimates from those models could sometimes be the technical estimate from the model –with a little final “from the gut” adjustment by the lead economist. Not trying to indict anyone, he was rather intending to both give us some insight to the complicated interaction of modeling limitations, the intuition of experienced economists, and policy influence, as well as get us thinking about what really constituted good research practices.

On the personal side, one of my early memories of the graciousness of Carl and Phyllis was the party they held for first-years in the fall of 1976, on election night for Ford vs Carter. Besides it being a wonderful social mixer, they held a little contest for who could pick the winner and his percentage of the popular vote. As I recall, the winner was the wife of one of our non-US classmates – politics has always been a universal language …

It was terrific to see Carl and Phyllis at Lou’s retirement event. While we hadn’t seen each other in a very long time, his memory was keen as always. He quickly recalled not only my first post-Hopkins job but also some of our DOPE softball days! Those are fond final memories.

My heartfelt condolences go to Phyllis and all of their family and friends.

Best regards,

—Richard J. Willke, Ph.D. , Chief Science Officer International Society for Pharmacoeconomics and Outcomes Research

 

“And, yet several more anecdotes.

I remember Carl – we called him Dr. Christ, back then. I was a grad student in the latter part of the 1970s; macroeconomics and international finance were my declared fields.

I remember Carl most vividly for his skillful and intuitive application of mathematical modeling to the greater understanding of macroeconomic theory and policy.

One of my fondest memories of him, was observing how he sat during our general seminars. I remember chuckling to myself, as I watched him, sitting in his chair, his legs folded up underneath him, in the shape of a pretzel. I always marveled at his ability to do that. ?Like the other professors in the department, he was dedicated to his students, the Department, the University, and his profession.

Certainly, one of the great ones!

He will be missed!

My condolences to his wife and family.”

—Milt Pappas, Ph.D.

 

“Carl Christ was an inspiration to me. He was a brilliant economist and very approachable. As a student, I remember that any of the students would walk past his office and he would call out a welcoming greeting to us. My first teaching experience was as a TA for him and I learned a lot from him. I am still a Professor!

Carl, rest in peace and send your blessings to us here on earth.”

—Marianne McGarry Wolf, Ph.D. , Wine and Viticulture Department, California Polytechnic State University

 

” I have just learnt about the sad demise of my most respected Professor Carl Christ. He is the one who offered me the admission with Fellowship to the Graduate Program in Economics at JHU in 1966, was my Ph.D. dissertation major guide along with late Prof Niehans); wrote a rather strong recommendation to my first post Ph.D. employer, IIM Ahmedabad (India), where I served 1970 through until my retirement in 2010; gave a strong recommendation to the Illinois State University, where I served as a full time visiting professor for five semesters at different times during 1982-1990; among several other critical helps. More than these, he was the one who taught me how to conduct research, how to develop econometric models, and how to even draft the thesis in good and correct English language (he corrected the language of the entire first chapter of my thesis and asked me to correct the rest in the same ways). As he was away in England as a Visiting Professor during 1966-67, I missed having had any full course under him, though a lot of my learning in Macroeconomics and Econometrics is due to him. He encouraged me whenever I was upset during my thesis work, helped me even when I had personal difficulties, and arranged my thesis defense shortly after the Commencement as I was keen to return back to India to attend my sister’s wedding. On personal level, he invited me with his family to his house and blessed my wife and both daughters! Such a teacher and guide, rare to find, had been a great boon to me and my accomplishments. Prof Christ, Prof Niehans and Prof Edwin Mills, all at JHU, were great Professors to me! All of them were/are great economists and I have always felt great pride through them.

It has been my great fortune and privilege to be a student of Prof Carl Christ. I offer my humble prayers to the Almighty GOD to grant peace to the departed soul, and courage and strength to the bereaved family to bear this loss. Prof Christ will always remain in my heart and mind through my life. ”

—Girdharilal Saduram Gupta

 

“Carl Christ was an inspiring teacher. I was fortunate to be his research assistant (or one of them) on his econometrics text and in fact am cited in the acknowledgements in the book. It was a great honor to work with him.”

“Good memories of a fine man, Bob (Robert Van Order). I was on campus 1963-65 when he was doing his book (then went off to South Korea and finished the dissertation later on the work there). I do remember to this day his emphasis on identification and am glad you mentioned it.”

—Roger Norton, ’71 , Texas A&M University

 

“The tributes to Carl Christ are really nice to read. I entered Professor Christ’s econometrics class when I arrived at Hopkins, in 1971. The first thing he did was to give everyone a 5 dollar bill, which he told us was the royalty on his book that we had to buy for the class. I was impressed, as were others – indeed, I can still see that scene in my mind even now. Later on, I marked his econometrics assignments, and he became my thesis supervisor. He was a famous scholar of uncompromising integrity with his students and in his own work. By example, he inspires still.

My deepest condolences to Mrs. Christ and her family.”

—Stanley L. Winer , Canada Research Chair Professor in Public Policy, School of Public Policy and Department of Economics, Carleton University, Canada

 

“I was a student at Hopkins 1973-77. Carl taught me econometrics-and impressed upon me the importance of identification and, as a result, structural estimation. I passed his semester of economic tricks, but failed the second semester (with Charley Mallor, I believe). They gave me an oral exam—he and Charley. Carl’s synopsis—“It’s like pulling teeth, but you pass. Just don’t do a thesis in econometrics.” Good advice.

His ability to sit like a pretzel, his good cheer on every day I ever was in his presence, his willingness to slide hard into the catcher at the annual softball game, his obsessively-compulsively organized office (journals were organized like dentin woodwork on a house, with each year’s worth of a journal lined up perfectly, but every other year’s collection pulled forward precisely one inch)—all were memorable. But grad school is an apprenticeship, and Carl was unstinting in his ability–by example and by the gifts of his time—to develop us into fellow professionals.

If there is an afterlife, I’ll bet for Carl it involves him sailing Lake Michigan in the mornings and writing research in the afternoons—as was his wont during the summers when I knew him.”

—Robert A Driskill , Vanderbilt University

 

“Like all of us I have a great memory of Prof Christ. I was at JHU during 1968 to 1972. He was not my thesis advisor, but I had always learned from him in and out of his courses. He was always a great teacher. And one summer I had the privilege of living in his beautiful home, being his house keeper when he was on vacation. When I was returning to Thailand to begin my teaching career at Thammasat University he gave me one advice which I always follow. He said ‘when writing a recommendation letter, always tell the truth’.

I am forever grateful for what he had done for me.”

—Narongchai Akrasanee , Bangkok, Thailand

 

“Thank you everybody for bringing back wonderful memories about Dr Christ who contributed so much in making my Hopkins years (1973-77) so enjoyable.

Like Jim and Ugo put so eloquently, Dr Christ was indeed a scholar, a teacher, a true gentleman and a mentor. He was also a father figure for foreign students like me.

I was very moved to read in his obituary that he “regularly participated in a weekly protest staged by residents along 40th Street in front of Roland Park Place, where he could be spotted carrying a sign that read “War is not the answer.””

We were lucky to have known him and to benefit from his teachings of economic tricks and more importantly from his exemplary behaviour as a teacher and mentor that will always be wit us.

My sincere condolences to his wife and family.”

—Andre Sapir

 

“Fun to read so many tributes to Carl. Certainly, a “man for all seasons”, one who was always civil and professionally courteous in all situations which I can remember in my JHU days. After almost 40 plus years in academic life, I certainly appreciate the witness of Carl’s manner and style of interacting with colleagues and students. A collegiality which we cannot always take for granted, and which we cannot ever underestimate as a value when we recruit faculty in our institutions.

On his teaching and academic advising, looking back, of course, we of my vintage remember well the extensive treatment of identification and of properly-specified government budget constraints in any model, for meaningful policy discussion.

We of the Johns Hopkins diaspora were very fortunately to have him as one of our professors.”

—Paul McNelis

 

“Professor Carl F. Christ was my and Poonsa-nga econometrics professor and Dissertation Adviser in different period of time in the 70’s. He was an amazing scholar, teacher, a true gentleman, a great mentor and the life at Hopkins.

He was liked our father during our wedding and beyond. It was a big opportunity provided by him for Poonsanga to be a postdoctoral fellow at MIT in 1976 and for me to do my dissertation immediately after being a Ph.D. candidate.

I have stayed with him and Mrs. Phyllis three times, first with Poonsanga in Baltimore home in 1982, second I was alone in his summer home with Lucy and her family and the third with my two sisters in their Baltimore home in 2006.

Apart from losing our teacher and dissertation adviser, we have lost our beloved father. He will be in our hearts for ever. Our sincere condolences to Mom Phyllis and their 3 daughters and grandchildren.”

—Poonsa-nga and Borwornsri Somboonpanya Ph.Ds , International Education Travel Co., Ltd. (IET), Bangkok, THAILAND

 

“I have very fond memories of my days as a graduate student at JHU in the 60s.

Carl was a great teacher, a model as a scholar, and a wonderful and unforgettable person.”

—Ernst Baltensperger

 

“Carl lived a long, active and productive life.

I was only on the faculty at Hopkins for a year as a young assistant professor, but Carl was remarkably kind and always prepared to discuss without any condescension and when I came back for a brief visit in 2006 it was as if I had never been away. A true gentleman and a scholar.”

—Alan Kirman , Directeur d’études à l’EHESS, Membre de l’IUF, Professeur émerite à Aix-Marseille Université, Paris

 

“It is great to read the tributes to Carl Christ. I was also a student of his in the early 70’s as well as his TA. He cared about all his students; both the graduate and undergraduate students, and spent a great deal of time with them. As a first-year graduate student, I was assigned to be a discussant on a paper that he presented. When the paper was published, I was listed in the acknowledgements, which was a thrill for a young graduate student – the first time my name was in a journal.

He has been a role model for me as an academic. When I do empirical work, I always think of him and his admonishment that no matter how sophisticated the methods, the work stands on the economics behind it.”

—Susan Vroman , Department of Economics, Georgetown University

 

“I have very fond memories of Carl that go as far back as 1952 when I started my graduate studies at JHU. I took econometrics from him, way before his book came out. The following year Richard Stone was visiting Hopkins and he and Carl organized an evening seminar to read Morgenstern and von Neumann on the theory of games – way before game theory became popular.

The last time I saw Carl and Phyllis was at a conference in 2014. Attached is a photo from that conference of Carl with Takeshi Amemiya, Al Harberger and me.”

—Marc Nerlove , Distinguished University Professor, Emeritus, Department of Agricultural and Resource Economics, University of Maryland College Park

 

“I took econometrics from Carl in the mid 1970s. I had no idea about his background in physics until I read his obituary. I think this background explains why Carl always thought that there should be no conflict between economic theory and econometrics; they are complementary. This view of economic research was what he imparted to generations of his students. It was his imprint on those of us lucky enough to takes his courses.

He truly was a gentleman and a scholar and as decent a man as I have known. My condolences to his family on their loss.”

—Robert J. Rossana , Dept. of Economics, Wayne State University

 

“Dr. Christ was my graduate econometrics professor and I was his TA for undergraduate macroeconomics in spring ‘92.

As I recall, it was a large class and I assisted Dr. Christ in exam grading and keeping track of records which he all scribed by hand. He was of the generation prior to the internet age, and I remember him being extremely afraid of computer viruses affecting his non-internet ready PC with a floppy disk drive.

My efforts to cajole him into using Excel to add efficacy was futile and I was vetoed with his totally convinced _expression_ that this may infect his computer. I thought it was funny that an intellectual giant of physics and math/stat-intensive econometrics would be so concerned with a computer virus which had almost no chance of penetrating his computer.

He was a great communicator who resonated with undergraduate students. He will be greatly missed.”

—Jongsung Kim , Professor of Economics, Bryant University

 

“I entered the program too late to take Carl’s courses. When I was on the job market, Carl was the one who taught me how to communicate and negotiate with the other side. Maybe that was the time he taught me the real “economic tricks.” When he was very happy to know that I got an offer from U Texas, Carl said, “You see, you are already wearing jeans.” Then he told me the joke that, since Texans are so proud of being the largest state in the contiguous US, Alaskans would split the state in half so that Texas would become the third largest state in the US. I still remember his smile, which I saw several times again since I moved back to Hopkins. Maybe that is the thing that lured me back: an celebrated academic with a warm heart.”

—Yingyao Hu , Professor of Economics, Johns Hopkins University

 

“I was very saddened to hear of the passing away of Professor Christ. I was his student in the early seventies when I was a graduate student at Hopkins. He was a great teacher and a wonderful person. I too remember him returning the royalty money to the students who had purchased the Econometrics textbook. His stress on the Identification problem has stayed with all of us it seems.

Professor Christ was an inspiring teacher, and could set tough exams. He would set an open book final exam and students had twenty four hours to complete it. Most of us had to stay up all night trying to figure out the answers! He was an enthusiastic participant in all department activities, whether dissertation seminars or even Halloween parties!

Professor Christ was also my dissertation adviser,together with Professor Hugh Rose. He was generous with his time, and our discussions were always stimulating and thought provoking. My husband and I stayed with him and his wife when I visited Hopkins for my graduation, and we remember their warm hospitality. Please convey my sincere condolences to his wife, and other family members.”

—Bimal Kaicker Beri

 

“I studied in Hopkins 1966-69, took Carl’s modules on macroeconomics and econometrics, worked as his

A in undergraduate macroeconomics and benefited from generous hospitality at his fine house .

I have nothing but happy memories of my interactions with him during those years. He was brilliant without showmanship, considerate in all matters, diligent and conscientious as a lecturer. He gave us graduate students a deep and long-lasting insight into macroeconomic foundations. I count myself lucky to have had him as teacher and mentor.

There was something quintessentially American about him. He embodied the best of American virtues: openness, honesty, seriousness of purpose combined with optimism and a prevailing cheerfulness. Unlike many other US academic economists he seemed to have a strong sense of place, as witness his enduring devotion to Hopkins.

He was rightly admired as a man of the highest integrity. One of many instances of this stays in my memory. The recommended text for his econometrics module was (naturally and properly) his own textbook Econometric Models and Methods that had recently been published. It was an expensive tome and he was conscious of the tight budget constraint many of us graduates were subject to in those days. He believed it was wrong for him to benefit personally from his choice of textbook. Accordingly everyone in the class who had bought his book was given an envelope addressed in his own hand containing the amount of the royalty he would receive from each sale, calibrated to the last cent.

Thank you, Carl! I’ll raise a glass to you for a good life well-lived.

May he rest in peace.”

—Dermot McAleese , Emeritus Whately Professor of Political Economy, Trinity College, Dublin, Ireland

 

“I am deeply saddened to hear the news that Mr. Carl Christ has passed away on April 21, 2017. I join my fellow econ-alumni in offering my condolences to the family and friends of Carl was my teacher and thesis supervisor (with Bela Balaasa and Lawrence Klein (from U Penn) at the Department of Political Economy during 1985-1987. He was not only a kind teacher but also a great human being as he was always willing to help student.

What I liked most about Carl was that he would comment on the papers of the faculty and graduate students during Graduate Student Seminars in a polite yet constructive manner. I never found him being harsh while offering comments. I had the opportunity to interact with Carl on a regular basis, when I was writing my Ph.D. dissertation. His comments were always constructive and improved the quality of my work.

Let me share with my fellow econ-alumni some interesting facts about Carl and my Ph.D. defense. I defended my thesis on August 5, 1987. By then Carl had already left for Beijing to set up JHU Campus in China. My other supervisor, Bela Balassa had to go through 13 hours throat surgery in Washington, D.C on August 4, 1987—a day prior to my defense. He too, was therefore not available during my defense. Larry Klein was in some Latin American Country and had promised to be present at my defense on August 5. By 10:50 am (the defense time was 11:00 am), Klein did not show up at the JHU which made me really nervous, thinking that none of my supervisors would be there during my defense. However, by 10:55am, Larry Klein entered the building of Economic department. I breathed a sigh of relief when I saw Larry Klein with his travel bag entering the department. Bruce Hamilton and Louis Maccini represented Carl and Balassa in my defense.

Before Carl left for Beijing, I had a long meeting with him in his office where we went through the final draft of the thesis. He was very much satisfied with my work which gave me enough confidence and encouragement to defend my thesis, of course, Larry Klein was a great source of strength during the defense. I defended my thesis on August 5, 1987 with minor comments; submitted the revised version within 10 days and left US on August 25, 1987. My thesis defense was a memorable event for me as I defended my thesis in the absence of two of my supervisors (Carl and Bela).

It was indeed a privilege and honor for not only knowing Carl but also being his student. With Carl’s demise, I lost all of my thesis supervisors. The world has lost three great human beings that the God had bestowed on us. May God rest Carl’s, Bela’s and Klein’s souls in peace and give strength to their families and friends to bear this loss.”

—Professor Ashfaque Hasan Khan , Principal & Dean, School of Social Sciences & Humanities (S3H), National University of Sciences & Technology (NUST), Islamabad

 

“I entered Hopkins in 1961, the same year as the second coming of Carl to JHU. When I applied to JHU, I was attracted by the names like Machlup, Domar, and Musgrave, but both Machlup and Domar were gone by the time I entered. Musgrave was still there for two more years, and I learned a great deal by reading his textbook Public Finance. A greatest boost for me, however, was the fact that Carl came back in the same year. He invited me to his office and asked me if I liked mathematics. I proudly answered yes. Then he asked me if I knew differential equations. My heart sagged as I didn’t know them. During the first two years at Hopkins I worked as research assistant to Dr. Edwin Mills in his project on water resources. It was good education for me as Dr. Mills was a man of a very sharp mind. But I was bogged down by the need to study geology of water, which I found extremely boring. Just then Carl came along and suggested I should work on econometrics, which I did. Initially I had planned to finish my dissertation in two years, but as my father became rather ill, I wanted to finish the thesis in one year and go back to Japan with a doctor’s degree and show it to my father. He died two weeks after I came home. I couldn’t have finished the thesis in one year without Carl’s cooperation way beyond his duty. The other members of the committee were Edwin Mills and Geoff Watson, to whom I am also grateful.”

—Takeshi Amemiya , Stanford University

 

“I took Dr. Christ’s course in Intermediate Macroeconomic Theory in spring 1963, and his econometrics course in 1965-66. Dr. Christ was a brilliant and challenging teacher. He always gave each student, who purchased his econometrics book for class, a refund equal to the amount of the book royalty. I have never had another professor do that. During my time in graduate school, Dr. Christ was the Department Chair. In my opinion, he did an excellent job.”

—Alan Sorkin , Ph.D.,1966

 

“As a grad student, I took Professor Christ’s Econometrics course in 1971-72 and also TA’d for him in the undergraduate macro principles course. For someone seeking a career at a teaching institution, as I did, there couldn’t have been a better role model than Professor Christ. He took great pains to make sure the TA’s knew what he would be lecturing on before each class, prepared us for what would be the most difficult material for the students, allowed us (really, expected us) to come up with our own quiz and exam questions, met with us regularly, etc. One day each week he would have lunch in the undergraduates’ cafeteria, just so his students would have a chance to interact with him outside the classroom setting. What a great example he set of a true teacher-scholar! I feel very fortunate to have been mentored by him.”

—Geoffrey Gilbert , Professor Emeritus of Economics, Hobart and William Smith Colleges

 

I once came across Dr. Carl Christ in the hallway when I was still a graduate student. We briefly talked and he was very approachable to me. He gave me a lot of encouragement on economics study and also a few books that I still keep them now. He was a gracious scholar and gentleman.

—Yizhen Zhao , East Carolina University

 

Carl Christ has made a lasting positive difference. He was my thesis supervisor

during my graduate school days at Hopkins (1962-1966). I also served as his teaching assistant in an undergraduate course in economics. I chose university teaching and research as a profession, from which I am now retired. Whenever a student thanked me for my supervision and advice, I smiled in thankful remembrance of my experience with Professor Christ. I endeavoured to pass on the Christ attitude towards students, even though lacking his natural devotion to the cause of education and, above all, his easy ability to detect and direct you, always, to the important details in the analysis or argument. I received prompt and insightful comment when I submitted research to Carl Christ as late as 2004. A resounding thank-you. May the life that Carl Christ lived lessen the family’s grief at his passing.

—John W. Iton , Ph.D.(1966) Retired

 

I would like to mention another way in which Carl Christ was a memorable professor — he was a terrific teacher of undergraduates.

I was an undergraduate at Johns Hopkins (BA ’88), and I went on to graduate school in economics later on. I took Macro Principles with Carl (or Dr. Christ, as I called him then), and Micro Principles with Bruce Hamilton, and both the content of these classes and the personal regard of both professors had a huge influence on me. (And while I’m mentioning it, so did my first TAs, Jonathan Neuberger and Greg Hess.)

Carl was gracious to everyone, but not only that — he took me, as a 19-year-old, seriously. I recognize, now that I am a professor too, how meaningful that is. I got more and more excited about economics the more classes I took, and I ended up taking some first-year graduate classes, including econometrics from Carl, before I left Hopkins. As many of the letter writers have mentioned, his emphasis on simultaneous equations models stayed with me forever after!

I look back very fondly on these formative years that I experienced at Johns Hopkins.

—Leora Friedberg , Department of Economics, University of Virginia

 

Carl and I exchanged holiday cards regularly for more than 40 years, updating each other on our professional, family, and social accomplishments and challenges. Like many of my fellow Hopkins doctoral students, Carl Christ was a friendly, insightful, and demanding professor: certainly one of the great leaders in the department when I was there from 1967-71. Two anecdotes: Our econometrics class was one of the first to use his textbooks. One of the students in the class – not me – off handedly mentioned that there might be a conflict of interest if an instructor required his students to purchase a book that he had written. The next class day Carl gave each of us who had purchased the book something like $2.00 to reflect his royalties. However, his generosity had limits: there was nothing for anyone who had purchases a used copy. Second: At the time I was at Hopkins the department was on the top floor of Gilman Hall. There was a back staircase, and one day after lunch several doctoral students, including myself, decided to race us the stairs from the ground floor. We did this in waves, and not very quietly. At one point, at the top of the landing, we were greeted by Carl, and expected a stern “what are you doing?” or “you are disturbing the peace.” Instead, he simply smiled and asked what was the best time. I suspect that he might have tried to beat it!

—Bruce Jaffee , Emeritus Professor of Business Economics and Public Policy, Indiana University

 

Image Source:  Carl Christ at the Mathematical Economics Conference in Honor of M. Ali Khan in 2013.  From the gallery of pictures at “In Memoriam–Carl Christ (1923-2017)”.