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Teaching economics

The September 1, 2005, edition of the New York Times carries a strong critique by economist Robert H. Frank of the way economics is taught at our nation's colleges. The piece will only be available without subscription through September 8, 2005, but here is the link.

Frank, who has taught introductory economics at Cornell since 1972, writes that: "most students seem to emerge from introductory economics courses without having learned even the most important basic principles. According to one recent study, their ability to answer simple economic questions several months after leaving the course is not measurably different from that of people who never took a principles course."

Frank blames several factors. First, "the encyclopedic range" of typical introductory economics courses, which cover too much material too superficially. Second, and probably related to the first, intro econ courses are "increasingly tailored ...[to] the negligible fraction [of students] who will go on to become professional economists." This means focusing on mathematical models that most students have trouble digesting, rather than spending time communicating "how basic economic principles help explain everyday behavior."

Frank also makes much of the incompetence of the economists teaching undergraduate (and presumably graduate) economics courses. He reports the results of recent research by Paul J. Ferraro and Laura O. Taylor of Georgia State University, who asked about 200 PhD economists what Ferraro and Taylor view as a straightforward multiple-choice-format question about the economic concept of "opportunity cost". Almost 80 percent of the respondents --economists with PhDs, a large majority of which had taught undergraduate introductory courses-- answered the question incorrectly. In fact, about one-fourth of the economists chose each of the four possible answers, suggesting that having a PhD in economics was no more useful than taking a random guess.

The results certainly leave the economics profession with some egg on its face. You can read all about the question and the correct answer either in Frank's piece in the New York Times or in Ferraro and Taylor's paper. But, I am just as interested in the discovery that the economic understanding of intro econ students "several months after leaving the course is not measurably different from that of people who never took a principles course."

What is missing from Frank's argument is an explanation for why this is happening, and why it persists. Frank never explains why thousands of economists at thousands of post-secondary institutions have decided over decades to teach the wrong material the wrong way to hundreds of thousands, probably millions, of students.

Maybe the purpose of teaching introductory economics to "non-majors" and others who will not go on to be professional economists is not to convey "how basic economic principles help explain everyday behavior". Maybe, instead, the purpose of exposing future non-economists to the conceptual breadth and mathematical depth of formal economics is to intimidate these future voters into deferring to economists when it comes to "free trade" or labor-market deregulation or our archaic software copyright system or Third-World debt repayment or a host of other class-biased policies that most middle-class people would otherwise find objectionable. Later in life, these non-economist veterans of economics principles courses will think twice before disagreeing with the professional judgments of economists, whose scientific knowledge obviously exceeds the poor former students' capacities even to comprehend.

One neat feature of this alternative explanation is that it can explain why the economics profession can tolerate the kind of fundamental incompetence unearthed by Ferraro and Taylor. Intro econ professors with a poor grasp of "economic fundamentals" --but usually no lack of professional self-confidence, at least when it comes to their undergraduate students-- only ensure greater confusion on the part of unlucky students. And personal confusion in the face of professional certainty simply amplifies the intended intimidation.