"Colleges are teaching economics backwards"

Colleges are teaching economics backwards

Posted by Mike Konczal at the Washington Post

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/30/colleges-are-teaching-economics-backwards/

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Notice how this orients the casual student, the non-major who will only encounter economics once in this survey course. They start off with an abstract market that always works, versus having to see the messy parts when it doesn’t. They then proceed to the long-run, and only after everything else do they get to something that might help them understand why unemployment is so high for young college graduates. Only then might they be introduced to the institutions that make markets happen, if those are discussed at all.

So, what if we just reversed all that?

What if macroeconomics came first, before the study of individual markets? If were to reverse the typical curriculum, the first thing undergraduates would encounter wouldn’t be abstract theories about people optimizing, but instead the idea of involuntary unemployment and the idea that the economy could operate below its potential. They’d study the economy in the short-run before going to issues of long-term growth, with professors having to explain the theories on how the two are linked, bringing in crucial concepts like hysteresis.

Then, in the second class, they would get to microeconomics. But that too would be taught backwards. They’d start with institutions, understanding what enables a market economy to exist. Then they’d move on to the issue of firms with market power and externalities. Then, only at the very end, they’d get to the purest abstraction of perfect markets, with a final emphasis on what it means to be the isolated, optimizing Robinson Crusoe at the very end.

None of the core elements of today’s economics survey would go missing. But it would radically alter the content, shifting the subtle priorities and emphases communicated to students in how the materials are laid out. Economics would be less the study of abstract, perfect individuals and markets, but instead start with the messy business of the business cycle, of there being a macroeconomy that works or doesn’t, and also the institutions that make such things possible.



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