There is a big problem with economics education: PhD programs are turning out a lot of applied mathematicians and statisticians with little to no economics knowledge. Price TheoryAt the undergraduate level, social control (“market failure!”) and activism (“inequality!”) have replaced careful reasoning about markets and politics. Very few programs To instill in students an understanding of the power and universality of economic thinking.
The economics curriculum as it exists today is the result of decades of gradual, piecemeal selection of topics and methods that may have been justifiable at the time, but which have resulted in a course of study that leaves students ill-prepared to speak and write intelligently about economics.
We have rebootEven at this late hour, there are enough good economists in academia in positions of responsibility who can make a difference. It’s time to take the “gloomy” out of “gloomy science” and rethink what we teach. We should start with our core textbooks.
There is no one-size-fits-all best curriculum. Different programs have different emphases, especially in areas of expertise. However, there are some textbooks that stand the test of time and continue to provide deep insight. If I were in charge of designing a curriculum, I would base my program on the following books:
Introduction to Economics. Economics 101 is the most important course in the curriculum. Paul Hayne You realize that you should teach your introductory economics class as if it were the only class your students will ever have. Show them the big picture, give them the keys to unlock the secrets of wealth and poverty, and convey the beauty and breadth of economic thinking. If you do this well, it will be the first of many classes, not the only one your students will ever have.
There are several good options for introductory economics textbooks, but in my opinion, there is one that stands out far above the rest. Universal Economics Written by Alchian and Allen. From basic topics such as scarcity to Property RightsIn this book, two of the 20th century’s greatest economists walk readers through the subtleties of economic reasoning, from economy, society, and demand to price-follower strategies, interdependence, and even advanced topics like unemployment and inflation, without excessive complexity or jargon.
Don’t get me wrong: this is not an easy book; it asks significantly more of you than, say, the widely used Mankiw primer. But it’s worth the effort. There’s no better book for teaching the fundamentals. Even if a student leaves Economics 101 behind and doesn’t take economics anymore, they’ll still know everything they need to know to be effective. And if they go on to a minor, major, or graduate school, they’ll have a stronger foundation in this book than any other book currently available. Recent Reviews, Universal Economics “It should be required reading for all bachelor’s and master’s students and a prerequisite for doctoral programs.”
Intermediate Economics. Most intermediate courses are taught as watered-down PhD seminars: abstract and unrelevant, leaving students confused and unprepared to solve real-world problems. Clearly, this is a mistake. We need to encourage students in intermediate courses to think more deeply about the assumptions and content of their flagship models, but we must not lose sight of our goal of refining students’ analytical toolkits so that they can think like economists.
My favorite text at this level is Steven Landsberg’s Price theory and its applications,Hirshriefer et al. Price theory and its applicationsand David Friedman’s Pricing Theory: Intermediate TextAll of these texts do a good job of showing students the inside story of the models they learned in introductory economics, but without overwhelming them mathematically, and with a very important focus on problem solving. After one semester of studying any of these texts, students will be equipped to be applied economists.
Advanced Economics. Whether “advanced” is considered the final stage at undergraduate level (elective) or the first stage at graduate level (required) is not important; what matters is the focus. Advanced economics courses should help students cross the bridge from consuming economics to producing economics. This does not necessarily mean academic papers, but sophisticated analyses of ongoing debates among economists and contemporary issues in markets and politics.
Avoid trendy textbooks like those by Mas-Colell et al. and their imitations. If you want a flashy presentation, Varian and Krebs is better. But remember that even at advanced levels, very few students need to know the abstract math of preference relations or equilibrium existence proofs. Rigorousness should not come at the expense of relevance.
Gary Becker’s Economic theory and Jaffe et al. Chicago Price TheoryIdeally, instructors use both. Becker’s text includes many topics not covered by Jaffe et al., who go into a bit more detail on overlapping topics. Reading these books together prepares students to critique and build partial equilibrium models of sufficient complexity to yield meaningful insights.
Mathematical Economics. I dislike most mathematical economics textbooks. They usually do a poor job of explaining the relevance of the theory to real economic reasoning. And very They do a poor job of grounding their model in economic intuition. A notable exception is Silverberg and Suen’s little-known book, last revised in 2000. Structure of economic analysis.
Every mathematical economics textbook will introduce and prove to its readers: Envelope TheoremSilverberg and Suen’s book is one of the few that explains why it matters economically, and while much of the presentation is outdated (economists these days rarely use linear programming or matrix algebra to solve models), it still does a good job of conveying the basics of constrained maximization and comparative statics, which are essential to doing price theory at the highest level.
Related Text. An excellent comprehensive text that complements the above is McCloskey’s Applied Pricing Theory, Milton Friedman’s Price TheoryGeorge Stigler Price TheoryWhen students get stuck, sometimes presenting the material in a different way can help them understand the key points. Supplementing the core topics with relevant sections from these books can help develop an intuition for economics. McCloskey’s books in particular are valuable because they have excellent end-of-chapter problems.
problem solving. you Gordon TullochThe only way to master economics is to solve a lot of problems. Economics is simple in concept, but applying it is not. It takes a lot of practice. Problems with price theory De Meza and Osborne Problems with price theory A comprehensive list of easy-to-understand and challenging exercises. Anyone interested in graduate school should do every problem in this book.
paper. All On Waddell’s and Williams These are classics of economics that every advanced student and practitioner should know. Mulligans Recent papers, especially his A price-theoretic perspective on externalities and his analysis of how public policy affects Opioid ConsumptionFinally, if you will allow me a bit of self-promotion, I would like to draw your attention to the following. Salter and KatzingerA survey of the current state of price theory in the economics community.
Rebuilding our economy will take a lot of work. But it will be a job worth doing. These articles will help us get started. All we have to lose is ignorance.
Alexander William Salter is the George G. Snyder Associate Professor of Economics in the Rawls College of Business, a Comparative Economics Research Fellow at the Free Market Institute at the Toronto Technical University, a Senior Fellow at AIER’s Sound Money Project, and a Provincial Fellow at Young Voices.
