Attention Economy


Friday, May 23, 2014

Principles of Economics – In Need of Fundamental Changes


There is an interesting debate taking place currently on the need to change the content and structure of introductory economics courses. Noah Smith offers his perspective here:


There are two fundamental challenges in how Principles of Economics is taught at many American universities:
A.     Making economics relevant while keeping it accessible to freshman college students with wide-ranging backgrounds is certainly a challenge. The best way to introduce economics in not by emphasizing empirical testing of the validity of economic theories. In fact, the most interesting and useful lessons are often derived from studying economic history. For instance, if you want to examine business cycles, readings on the Great Depression and the Great Inflation (1970s) can be invaluable. Additionally, a thorough discussion of the causes and consequences of the recent financial crisis would be highly illuminating (especially, if students are shown the historical parallels to earlier crises). At the microeconomic level, a careful analysis of real world market imperfections –imperfect competition and industrial organization and asymmetric information problems – would enliven classes. Again key historical cases would make the material more accessible to students.
All of this requires highly motivated students who are willing to undertake extensive reading and analysis and faculties willing to challenge them. This leads us to the incentive problem discussed below.
B.     Underlying incentive structure for students and young faculties is flawed: Many students these days do not want to be seriously challenged (especially in first year courses). They want to essentially get through the lower core courses with the least amount of effort and with the highest possible GPA (the path of least rigor leads them to seek out instructors who are likely to be easygoing and flexible). From the instructor side, the growing obsession with student evaluations creates an incentive to kowtow to student wishes. As long as you make it easy to get a good grade and are as accommodating as possible, you will be ‘popular’ with the students. Universities need to create a system in which rigor and serious exploration of complex issues is appreciated.