Frederick Wolff Ogilvie, who was raised in Dundee, succeeded Nicholson to the chair in 1926.
After studying at Oxford University, he became a lecturer in economics. He held the Edinburgh chair only until 1934 when he became vice-chancellor of Queen's University, Belfast.
In succession to John Reith he became the BBC's second director-general in 1938. As life at the BBC was too stormy to suit his sympathetic, idealistic manner, he retired in 1942.
His last appointment, as principal of Jesus College, Oxford 1944-49 was cut short by his premature death. His widow was originally from Edinburgh, and became a tutor of female students at Leeds University before principal of St Anne's College, Oxford 1953-66.
While he was at Edinburgh, Ogilvie wrote Industrial Conflict, a text in which he argued for a National Industrial Council to settle disputes.
He was one of the first economists to see the significance of tourism, and he subsequently wrote The Tourist Movement: An Economic Study (1933) which discusses the statistical difficulties of measuring tourism, and shows how economic growth brings about a faster growth in services with more expenditure on tourism
In 1927 Ogilvie introduced changes to the economics courses at Edinburgh. He sidelined Smith, Mill and Nicholson in the Political Economy Ordinary course so that the recommended books could be:
Following the lead of the Arts Faculty, the Economics department introduced an intermediate honours course as a preparation for honours courses.
From 1929 there were modifications to the diet of honours papers, too:
Palaeography, which is a study of Scottish documentary sources, was dropped from the curriculum, and the options available were taken from other departments.
While this gave breadth to the degree programme, it reflected the limitations of only four staff members teaching political economy. Rankin and Joynt continued to lecture; Fenelon was replaced in 1932 by KS Isles who remained on the staff until 1937.
The external examiners were illustrious - Sir Henry Clay followed by Sir Josiah Stamp and TE Gregory for honours and JR Hicks for the ordinary course.
Alexander Gray took over the Chair from Ogilvie in 1935.
His distinguished early career began at school in Dundee before he took a joint honours degree in mathematics and economics at Edinburgh University: he was Nicholson's pupil and later the external examiner for his courses.
He worked as a civil servant during the First World War, using his linguistic abilities to engage in anti-German propaganda. He also translated German and Danish ballads into Scots and published a considerable amount of his own homely poetry.
He held the chair of political economy at Aberdeen 1921-35, and he wrote his most famous work, The Development of Economic Doctrine; a well-written introduction to the subject which, in a long sweep of economic literature ending with the early Austrians, still deserves a place on reading lists.
Gray maintained an interest in 'the real world' through his position as an insurance company chairman.
During his long tenure of the chair at Edinburgh the department went on much as before. Over the Second World War he returned to the civil service.
While he was at Edinburgh, his chief contribution was his text; The Socialist Tradition: Moses to Lenin (1946); a thorough and invaluable work that is all too often neglected and forgotten.
Although not a period of innovation in terms of teaching, there was a conscientious effort to introduce major economics works into the reading lists soon after publication; Keynes's General Theory of Employment, Interest and Money (1936) was recommended for study from 1938.
Similarly, Hicks's Value and Capital and Joan Robinson's Economics of Imperfect Competition rapidly became recommended texts for honours students. Few would dispute that the MA degree curriculum of those years was a worthy, if sceptical, training in economics.
The student first learned what was wrong with Adam Smith and all the things in which he was wrong and confused, then he went on to learn what was the matter with Ricardo, then what was the matter with Marshall. Many students never learned anything that was right at all, and I think they emerged from the course with the impression that economics was a monumental collection of errors.
There were many staff changes under Gray's custodianship of political economy at Edinburgh. The different lecturers appointed included:
Alexander Gray was succeeded in 1956 by a young economist born in 1922, Alan Peacock.
Alan Peacock was also the product of Dundee High School, and the son of a Dundee professor of zoology. His education at St Andrews University was interrupted by service in the Royal Navy, which gave him an opportunity to be tutored by the Cambridge economist Pigou. Peacock lectured in economics for a year at St Andrews University before lecturing at the London School of Economics during the period 1948-51, where his increasing fame as an authority on public finance was rewarded with a readership.
While at Edinburgh, Alan Peacock enthusiastically embarked on modernising the teaching and research activities of the Department. First year students were exposed to the rigour of Samuelson's Economics; honours students were taught to regard economics as a professional discipline as well as being a scholarly pursuit requiring them to demonstrate how economic analysis could be applied to policy.
Although there were insufficient resources to mount a programme of taught graduate courses, a regular staff/graduate seminar was instituted. Eleven postgraduates completed their PhD theses during this period. The department increased its lecturing staff by three: Ian Stewart, Douglas Dosser and Donald Winch. Four extra assistants were employed. There was a significant rise in research output. Peacock, for example, published articles in seven major economics journals and jointly wrote four books, mainly on public finance.
However, Alan Peacock's stay in the Edinburgh department was short; in 1962 he became the first professor of economics at York. Later he migrated to University College, Buckingham, succeeding Max Beloff as its second principal. His long standing interest in the economics of the arts and the media culminated in his chairing the Committee on Financing the BBC in 1985-6. Like Ogilvie and Gray he was knighted.