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Symposium 2013

Solution for The Future of Economics Teaching

The Challenge

Economists are asking the great questions that motivated the discipline when it began – questions of growth, distribution, behavior and instability. The field is booming in terms of methods. Field a ...

Economists are asking the great questions that motivated the discipline when it began – questions of growth, distribution, behavior and instability. The field is booming in terms of methods. Field and lab experiments have been introduced and advances in empirical analysis allow policy interventions to be evaluated. Economics has never been more central to the discussion of the major policy issues that animate the public. But economists are in disrepute. And economics teaching is under pressure to change. There are three sources of pressure. The public, policy-makers and employers blame economists for complacency prior to the crisis. Some complain that the undergraduate curriculum is training candidates for admission to PhD programs and is too narrow and technical for the majority who will work in business and government. Students are forming new student societies to press for teaching more relevant to today’s serious economic problems. Teachers themselves feel the pressure from students. They are discomforted by the gap between what they teach and the last 3-decades of developments that frame their research, and are anxious about the potential of the new disruptive technology of MOOCs (massive open on-line courses).

Increase the relevance of basic economics courses

More relevant microeconomic and macroeconomic models (which are also closer to the research frontier) could readily be taught in undergraduate courses. The models could be presented in a straightforward way and yet are also much truer to the reality of the world. The macro example is a three-stage model: first, a (pre-crisis) model of a central bank with an inflation target, and a labor market with efficiency wages and involuntary unemployment; second, the introduction of money and banking (which have largely vanished from the undergraduate curriculum); and third, the financial sector as a transmitter of shocks. In the micro example, recent research on two-sided markets, with ‘platform’ operators between two categories of users, can be presented using the basic economic concepts of substitutes and complements, and the differing results of collusion between producers of goods that are substitutes and those that are complements.

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