Economic education has serious problems. Doctoral programs produce mathematicians and mathematicians with little experience price theory. At the graduate level, social regulation (“market failure!”) and activism (“inequality!”) have replaced careful thinking about markets and politics. Very few programs Focus on students’ appreciation of the power and integration of the whole economic way of thinking.
The economics curriculum looks the way it does because of decades of growing and cutting choices about topics and methods. These may have been secure at the time. But the result is a lesson that leaves students unprepared to speak or write intelligently about economics.
We need a reboot. Even in this latter period, there are enough good economists in positions of responsibility within the academy to make a difference. It’s time to remove the “bad” from “bad science” and rethink what we teach. We should start with our core documents.
There is no one syllabus that is best for all schools. Different programs may emphasize different things, especially in their specialized sub-areas. But there are several texts that have stood the test of time and continue to provide profound insight. If I were responsible for curriculum design, here are the books I would build the program from:
Introductory economics. Econ 101 is the most important course in the curriculum. As an accomplished economics teacher Paul Hayne realized, we should teach an introductory economics class as if it were the only one our students would take. Show them the big picture. Give them the key to unlock the secrets of wealth and poverty. Convey the wonder and breadth of economic thought. Get this right and it will be not only a class of students but the first of many.
There are several good options for an Econ 101 text. But in my opinion one stands head and shoulders above the rest: Universal Economics by Alchian and Allen. From basic topics such as scarcity, property rights, and demand, to advanced topics such as price search strategies, interdependence, and even unemployment and inflation, two of the best economists of the 20th century guide students through the subtleties of economic thinking without undue difficulty. or jargon.
Make no mistake, this is not an easy book. It demands significantly more from readers than, say, Mankiw’s widely used introductory text. But the effort is worth it. No other text does a good job of teaching the basics. If students stop taking economics after Econ 101, they will know everything they need to do for practical purposes. And if they advance to a junior, senior, or graduate career, they will have a stronger foundation from this book than any other currently available. As I wrote in a latest update, Universal Economics “It will be required for all Bachelors and Masters students, as well as a doctoral study requirement.”
Intermediate economics. Many intermediate courses are taught as watered-down PhD seminars. The vagueness and lack of coherence leaves students confused and unprepared to solve real-world problems. Obviously, this is a mistake. Although we should encourage our intermediate students to think more deeply about the assumptions and content of empirical models, we should not lose sight of the goal: to refine the students’ analytical toolkit so that they are ready to think like economists.
My favorite writings at this level are by Steven Landsburg Value Theory and ApplicationsHirschliefer et al.’s Value Theory and Applicationsand David Friedman’s Value Theory: An Intermediate Text. They all do a good job of showing students what’s under the hood of the models they learned in Econ 101. However, they won’t overtax students mathematically. They also maintain a very important focus on problem solving. After a semester spent with one of these texts, students will be well on their way to becoming working economists.
Developed economies. It doesn’t matter whether we think of “advanced” as the final (elective) phase at the graduate level or the first (required) phase at the graduate level. Instead, what’s important is focus. An advanced economics course should help students cross the bridge from food economics to production economics. That doesn’t necessarily mean scholarly papers. But it does mean a complex analysis of ongoing conflicts between economists and current market and political crises.
Avoid trendy texts like Mas-Colell et al. and its consequences. If you have to have a good presentation, What’s different again Kreps they are better. But remember that even at higher levels, very few students need to know the abstract statistics of preferred relations or proofs of the existence of equality. Rigor should not come at the cost of compatibility.
I recommend Gary Becker’s Economic Theory and Jaffe et al The Chicago Price Theory. Ideally, instructors will use both. Becker’s text contains many articles Jaffe et al. don’t cover him. Jaffe et al. go more in-depth on overlapping topics. Together, these books will help students critique and construct balanced models that are complex enough to reveal meaningful insights.
Mathematical economics. I don’t like most mathematical economics texts. They often do a poor job of explaining their importance to practical economic thinking. And they usually do a a lot poor job of grounding their models in economic theory. A notable exception is a little-known book that was last updated in 2000: Silberberg and Suen’s. Structure of Economic Analysis.
Every math econ text will introduce students and prove it the envelope theorem. Silberberg and Suen are among the few who explain why it matters in economics. Although much of the presentation is dated—economists rarely use linear programming and matrix algebra to solve their models these days—the text still does a good job of conveying the basics of constrained maximization and comparative situations. Knowing this is important for doing price theory at higher levels.
Companion texts. Some good writing around including the above is McCloskey’s Applied Pricing Theory, Milton Friedman’s Value Theoryand George Stigler Theory of Price. When students get stuck, sometimes a different way of presenting a story can drive the point home. Adding the main topics with relevant sections from these books will help in building economic sense. McCloskey’s is especially important because the end-of-chapter problems are so good.
Problem solving. Unless you are Gordon Tullock, the only way to get good at economics is to solve many problems. Although the economic method of thinking is simple, implementing it is not easy. It will take a lot of practice. Look at Khan Price Theory Problems and De Meza and Osborne Problems in Price Theory for a complete list of accessible yet challenging exercises. Those interested in graduate school should deal with all the problems in these books
Papers. Everything is open This is Waddell’s place again Williams list. These are classic lessons in economics that all advanced students and practitioners should know. I also highly recommend Mulligan’s recent papers, especially his a price-theoretic view of externalities and his analysis of how public policy affects opioid use. Finally, if readers will justify self-promotion, I direct their attention Salter and Cutsingeran assessment of the status of price theory within the field of economics.
Fixing the economy will take a lot of work. But it is work that must be done. These documents can help us to start the work. We have nothing to lose except our ignorance.
Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics at the Rawls College of Business, a Comparative Economics Research Fellow at TTU’s Free Market Institute, a Senior Fellow with AIER’s Sound Money Project, and a State Beat Fellow with Young Voices.
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