The State of Economics and the Education of Economists



The financial crisis has reinforced a prior debate already taking place among economists about whether the mainstream of their subject was unduly narrow. The additional question now is the extent to which the character of mainstream economics itself bears responsibility for the present crisis. Most economists—whether in the academic, business, finance or policy worlds—reject the wholesale criticisms made by non-economists and ‘heterodox’ economists, but nevertheless do question what aspects of the conventional approach to modelling might have contributed to the profession’s pre-crisis blinkers. While exciting research has long been under way in behavioural economics, in institutional and development economics and in the well-being agenda, this had not gained much traction in the core curriculum. The gap between the interesting questions or real-world problems and the workhorse economics being taught to students at all levels has become a chasm, and a broadening of the undergraduate curriculum is urgently needed.

2 responses

  • Yeshitela Seifu says:

    Currently the situations and characteristics of the global economics is ever changing. While the curriculum designed for undergraduate students is not still considering this facts. This is therefore as a string foundation is basic for the construction of any building fundamental, as I think more focus for in-depth curriculum development with a consideration of the current global economic conditions has paramount value especially for undergraduate classes.

  • Anthony Barzey says:

    The paper notes most economists reject wholesale criticism from non-economists and heterodox economists, which implies many of those heterodox critics also reject the economics accepted by most economists. Mutual rejection would seem to merit an open, plurality of approaches in economics curricula offering students, scholars and practitioners some opportunity to make up their own minds.

    Regarding how common this rejection is, does this justify excluding heterodoxy from the curriculum or the paper? Relying on ‘justification by association’ (e.g. most exclude heterodoxy so we should too) leaves the curriculum open to structuring by bias. The paper offers little or no comment on why most economists make this rejection, or even of the author’s view on the subject. Perhaps there is an implicit assumption that most economists have a made a fair, unbiased assessment of the economics they accept and the heterodoxy they reject? By contrast, the paper itself indicates that even what would implicitly be ‘non-wholesale’ criticism has failed recently to make it onto economics curricula. Moreover, it is open to question whether most economists, themselves probably trained in similarly restricted curricula have been able, let alone willing, to make a fair assessment of heterodox alternatives thence of orthodoxy.

    Regarding what should be on the curriculum, the author focuses on three themes: firstly, the narrow ranges of skills relative to what employers of economists want; secondly, questions raised by the crisis and thirdly, the pedagogical challenge and incentives to reform or resist reform of curricula and teaching in universities. These seem reasonable issues, but the paper’s discussion leaves many relevant questions unaddressed.

    Part of the paper focuses on employers’ needs and the economics curriculum; this begs the question of the purpose of economics education. Is it for the welfare of the individual or society, the working class or capitalist class; men or women; consumers, parents, people from developing, emerging or developed economies? Can employers fairly, adequately represent the purpose? The paper makes no comment on the suitability of the skills of those employers, their experiential economic curricula (outside academia) or barriers to reform of these and teaching of them. Keynes famous aphorism about practical men being slaves to some long defunct economist seems relevant, but forgotten or ignored.

    In addition, the paper cites two authors who make the point that although few economics undergraduates become academics, many economics curricula are nevertheless ideally suited to deliver future PhDs. The authors come to the reasonable conclusion that knowledge of history, institutional context and communication skills are key elements of the professional economist’s toolkit. Is the implication that the ideal curriculum for delivering future economics PhD excludes these elements? It is likely ideal from the orthodox perspective of most economists designing such curricula, and would be challenged from many heterodox perspectives. If the ideal curriculum for such PhDs includes the elements, then what place is there for the changes the Coyle appears to advocate?

    The paper cites an investment banker lamenting, perhaps quite reasonably an alleged lack of discussion in economics curricula of the financial crisis. How should a representative of a group whose applied skills played arguably so large a part in generating said crisis, be used to evaluate albeit informally the skills aspects or other aspects of economics curricula?

    Regarding lessons learned from the recent crisis, the paper outlines striking contrasts between those wishing to shore up orthodox macroeconomics curricula with more orthodoxy, and those suggesting macroeconomics curricula should reflect a new research agenda. The latter encompasses among other things interdependent, networked economic agents, recognition of credit and complex financial intermediation. It should replace important parts of the orthodox approach such as independent optimising representative agents, DSGE models and rational expectations. However, the orthodox focus is on stable, unique, steady-state, rationally expected macroeconomic general equilibria and crises in theory or empirically are treated as aberrant due to stochastic shocks, short-term rigidities, rational mistakes, irrational mistakes e.g. state crowding-out effects and other non-systemic, non fundamental factors. Fundamentals such as (un)certainty, technology, productivity, institutional context, state policy and price flexibility are assumed given exogenously. Heterodox crisis theory seeks in diverse ways and degrees to explain endogenously, rather than assume, the existence and nature of these fundamentals and use the associated uneven, disaggregated course of their change across the globe and through time to generate understanding of the fundamental, systemic nature of crises. As such, these two broad approaches are different, each not reducible to the other. Thus, insofar as the contributions mentioned in the paper stem from a largely orthodox perspective, they are unlikely to emphasize the extent of agreement that post-crisis undergraduate macroeconomics curricula must change. This seems contrary to the author’s explicit contention.

    Some of the views in this section seemed more valuable, e.g. integrating lessons of history, intellectual history of macroeconomic thinking though not with the current workhorse macroeconomic model. Similarly valuable is the suggestion that macroeconomists research and teach features of the economy in which we live, rather than that more readily modelled. However, questions remain over the interpretation of history (should it be just using orthodox economic analysis?) and whose view of the economy we live in should be researched and taught (the orthodox one?).

    On reform of undergraduate teaching, the paper focuses on the UK but notes the discussion could apply to other countries including the USA. The paper cites a mandatory course for all undergraduates at LSE, to learn several issues from the perspective of more than one social science discipline including geography, political science and anthropology. The aim is to stress the range of methodologies available for studying social science and specifically for economics students to add inductive reasoning to the prevailing deductive reasoning in economics. If such a range of disciplines is to be considered, why should heterodox approaches and associated ranges of methodologies within the discipline of economics be excluded?

    The paper concludes that attempts to reform economics teaching have foundered on system-wide obstacles and inertia, in response it says coordinated effort is needed, and hopes and expects that student enthusiasm will be an important source of momentum. Other contributors to the current conference indicate student enthusiasm for heterodox courses. By keeping heterodox alternatives off the agenda, the paper seems to provide an obstacle to its own alleged hopes for curricular change, for some students at least. The irony is that orthodoxy may not countenance students’ income-constrained individual choice of a heterodox curriculum, unless that choice is also constrained by orthodoxy itself.