E-mail: stutes@mnstate.edu

HW #1

Based on the assigned reading, and on your knowledge of how GDP is measured write an approximately 500 word essay  answering the following questions:

1)Is GDP per capita a good measure of well being?

2)Are changes in GDP per capita a good indicator of economic progress?

3)What are the drawbacks or limitations of GDP per capita as an index of well-being?

Be sure to explain your reasoning.

Our understanding of American economic history rests in part on the reconstruction of quantitative measures of various aspects of economic activity.  At first such quantitative estimates may seem highly precise and scientific.  But it is important to keep in mind that they are the product of human efforts to measure aspects of economic behavior.  As a result there may be gaps between the ideal concept that we seek to measure and the information available to track it.  Moreover, no measurement will ever be perfect.  This assignment is intended to provide you with an opportunity to explore these issues in a practical way.  It also seeks to familiarize you with an important source of historical information.

For this assignment I want you to consider the measurement of immigration into the United States as reflected in the volume Historical Statistics of the United States, Colonial Times to 1970, bicentennial edition, compiled by the U.S. Bureau of the Census. You can find this volume in the reference sections of the Economics Lounge and in the Library.

As you will see these volumes are divided into a number of alphabetically labeled sections.  Chapter C deals with migration, you should begin by reading the General Note dealing with international migration, and then read the notes specific to the series labeled c89-119, which detail arrivals in the United States by country of origin.  Finally take a look at the data in these series.

After you have read the notes and looked at the data write an essay of about 500 words addressing the following topics:

• What is the relationship between the available data and the economic activity that we would like to measure?
• What issues of interpretation are involved in making use of the available data? That is what judgments, decisions, or inferences have the compilers of these data had to make? 
• What are the most important imperfections in the measurement of the data? How are they likely to affect the data? Will immigration be under or overstated as a result of these imperfections? Why?
• Based on the data themselves, what is most striking to you about the history of immigration to the United States? Explain.

Economic theory suggests that a country will tend to specialize in those activities in which it has a comparative advantage.  For the United States in the early 19^th century, with abundant land and natural resources, it would seem that its comparative advantage lay in agriculture (not manufacturing).  But, by 1850 the United States had a thriving manufacturing sector, and by 1900 it had become the world’s largest producer of manufactured goods.

Based on the assigned reading(end of Chpt5 and Chpt 10, and outside reading on Industrialization ), write an essay, explaining why the US began to industrialize in the early 19^th century, why this occurred first in textiles, and why manufacturing tended to be localized in New England.

It has been said that slavery was a contradiction on the verge of destroying itself.  Based on what you have learned from the text and this article (Slavery in the United States), write a short essay summarizing and evaluating the economist's methodology used  to examine that statement.  

The nineteenth century the American Banking system underwent a variety of significant institutional changes.  From 1791 through 1836, the first and second Banks of the United States played an important role, subsequently the spread of “Free Banking” contributed to a rise in bank density.  With the Civil War, the National Banking Act once again re-wrote the rules of the banking system.  These rules persisted until the establishment of the Federal Reserve System in 1913.

Based on what you have learned from these chapters and from these articles (Antebellum Banking & Banking: Civil War to WWI) about the history of banking and about economic historians views on this subject write a short essay evaluating the impact of these different legal and institutional environments on the operation of the banking system.  Can you make any judgments about which institutions and rules were most effective?  Does the answer depend on the historical and economic context?

To many observers at the time and to subsequent historians it has seemed that the railroad was a crucial factor shaping the course of American economic development in the nineteenth century.  Economic historian Robert Fogel has challenged this argument for the “indispensability” of the railroad.  According to Fogel, railroads made only a modest contribution to economic growth as of 1890.

Based on the assigned reading, write an an essay, explaining and evaluating Fogel’s argument.  That is describe how Fogel reaches his conclusion, and then explain what (if any) potential criticisms might be relevant.

In the second half of the nineteenth century the United States was becoming the World’s leading industrial economy.

Based on the assigned readings, write a 500 word essay identifying the sources of America’s rise to industrial leadership.  Are all of your sources linked to the railroad?  Conclude by commenting on whether a single industry or invention can precipitate accelerated growth. 

The Great Depression lasted from 1929 to 1933 in the United States, but the American economy took much longer to recover.  Indeed it did not reach full employment until at least the beginning of WW II.  One of the puzzles of this period then, is why recovery took so long.

Based on the assigned readings and the New Deal presentations in class, write an approximately 500 word essay evaluating the successes and failures of the New Deal programs.   

During the 20^th century the size and structure of the American economy have changed substantially.  Accompanying these changes have been equally large changes in the role of the Federal government in the economy.  One aspect of these changes has been the adoption since World War II of an explicit goal of reducing (or eliminating) macroeconomic fluctuations.

Write a short essay (no more than about 500 words) assessing the effectiveness of government macroeconomic policy in reducing or eliminating macroeconomic fluctuations.  Among the topics you may wish to address are: (1) what do the data show about the changing nature of macroeconomic fluctuations in the 20^th century, and (2) how government policies appear to have affected these fluctuations.

Our recent reading provides an overview of the changing role of government in the American economy.  But we have also dealt with this topic at other points during the semester, such as when we examined transportation improvements, macroeconomic policy, and immigration, to cite just a few instances.  For this assignment write a short essay (about 500 words) on the topic of how the nature of government intervention in the economy has evolved over time.  Be sure to cite specific historical instances to illustrate your thesis.