Exploring Heterodox Economics, Mainstream Economics, Finance, Computing, Environmental Sustainability, and Emerging Technologies. This Blog also promotes awareness of a Modern Universal Paradigm known as Transfinancial Economics (via page links) which is arguably the most advanced, and most "scientific" form of Economics of its kind.
Thursday, 8 May 2014
The mainstream economics curriculum needs an overhaul
Diane Coyle, 4 May 2014 Blogger Reference Link http://www.p2pfoundation.net/Transfinancial_Economics
The undergraduate economics curriculum is hugely influential, since today’s undergraduates are tomorrow’s policymakers. The massive policy failures before and after the Global Crisis have thus prompted a rethink. This column argues that there is a reasonable degree of consensus on the need for curriculum reform, but no agreement on whether this means rejecting the basic building blocks of the subject. Nevertheless, undergraduate courses in five or ten years will almost surely have changed considerably in character.
One of the delayed consequences of the financial crisis is a widespread and apparently growing desire to change how economics is taught. Students in a number of countries, including vocal groups in Chile and the UK, have recently intensified the demand for reform. One recent example is a report from the Post-Crash Economics Society at the University of Manchester (Post-Crash Economics Society 2014).
Professor Wendy Carlin of University College London is leading an international group of academics in developing a new open-source course for introductory economics (funded by the Institute for New Economic Thinking). It contrasts with conventional courses in:
Emphasising dynamics, instability, institutions, and environmental questions; and
Integrating new results and empirical evidence.
The question of curriculum reform was also the subject of a special session at the recent Royal Economic Society conference.
Some of the issues were first raised by contributors to a VoxEU debate in 2012 entitled “What’s the use of economics?” (see also Coyle 2012). The debate noted a widespread belief that the profession’s credibility was at stake. If the core economics courses did not respond to the challenges that the Global Crisis posed, economics as a whole would suffer a significant loss of credibility.
Common reform themes
Common themes in the debate at that earlier stage were the need for students to have:
More exposure to economic history and the history of thought;
More practical hands-on experience with data;
Better teaching of communication skills; and
Some exposure to new developments in economic research.
Overall the thrust was for a less narrow and reductive approach to economics than has become the norm in undergraduate courses. Both academics and employers of graduate economists agreed on these needs.
In the UK, a working group set out such principles in a statement of principles (Coyle 2013). It concluded that undergraduate courses should become more pluralistic and should include:
Some economic history, which could be integrated into existing courses, especially macroeconomics;
An introduction to other disciplinary approaches;
Possibly ‘tasters’ of the frontiers of academic economic research with potential policy application, such as behavioural economics, institutional economics, and post-crisis developments in financial economics;
Awareness of some of the methodological debates in economics;
Confronting all theoretical frameworks with evidence and encouraging a healthy scepticism towards all assertion from whatever source.
What do these general principles mean in practice?
Even a relatively minimal interpretation implies a substantial amount of change in many undergraduate economics programmes. In many universities, the core curriculum settled into a predictable rut. This interacted with two factors: (i) incentives for academic research to focus on technical increments to knowledge – contributions aimed solely at professional peers, and (ii) rising teaching loads and student numbers stemming from pressures on university finances.
Despite the great interest in reform among economists teaching undergraduate courses, change will take some time as these various barriers are overcome.
There is probably the widest agreement about changes such as:
Re-introducing elements of economic history into core modules;
Incorporating some issues on the frontiers of research into undergraduate teaching;
Encouraging inter-disciplinary interest; and
Ensuring students are taught key skills such as data handling and good communication.
A number of economists have commented on the desirability of updating the curriculum to reflect interesting areas of research and ‘real world’ examples (see e.g. Seabright 2013).
More disagreement exists when it comes to the question of the character of economics itself, and the extent to which the experience of the past six years calls the mainstream of the subject into question. Andrew Haldane, newly appointed as chief economist of the Bank of England, argues: “It is time to rethink some of the basic building blocks of economics.” (Post-Crash Economics Society 2014: 4.) Student groups campaigning for reform would clearly agree on the need for a radical reinterpretation of what should be in the core courses or modules.
There is some overlap between their views and those of the mainstream. For example, the UK working group cited above also recommended greater pluralism in economics: “Hostility towards other approaches is the antithesis of a dynamic self-critical discipline that is genuinely seeking to discover new and better ways of understanding the world.”
But it added: “That said, students should not be left unnecessarily confused or with the impression that all schools of thought have an equal standing, or that ‘anything goes’. There should be a balance between a) providing a coherent ‘workhorse’ framework for intellectual development and building analytical skills, and b) the candid highlighting of uncertainty, the limits of economic knowledge and the existence of serious alternative views and approaches.”
In a recent blog post, Roger Farmer of UCLA made a similar point: “My advice to students is this. […] [T]ake the time to absorb those ideas that are in the mainstream. The very best mainstream economists were the radical students who questioned authority when they were undergraduates. It is those economists who you must engage if you are to make meaningful changes that will advance our understanding.” (Farmer 2014.)
Shortcomings of the critiques
However, it is clear that the campaigning students have an incorrectly broad interpretation of the ‘neoclassical mainstream’ and a narrow interpretation of ‘pluralism’. For example, the recent report from the Post-Crash Economics Society fails to recognise the breadth of the courses available in its economics department (which it describes unfairly as a ‘monoculture’); and is itself narrow-minded in dismissing the value for economics students of courses that happen to be taught in the other social sciences and the business school.
The report also mistakenly equates pluralism with the specific views of heterodox economics, rather than the open-minded willingness to analyse economic issues from a range of alternative perspectives (including heterodox ones). There is an obvious logical fallacy in the labelling – and dismissing – of any non-heterodox views as the ‘neoclassical mainstream’.
Simon Wren-Lewis of Oxford University has expressed sympathy with the instincts of the student group but describes their conclusions as “fundamentally misguided”:
“I think it is true that economics as a discipline has tried too hard to emphasise that it is an objective, politically neutral discipline, thereby underplaying value judgements when it makes them. Worse still, sometimes heavily value laden ideas like the importance of Pareto optimality are portrayed as being value neutral, which is clearly nonsense. […] Yet the idea that it should be possible to build a science of human behaviour which is independent of ideology or politics is a noble ideal, and one which has been partly achieved. We may need (and are getting) more political economy, in the sense of recognising that economics works alongside and interacts with social and political forces, but I do not think we need more partisan economics.” (Wren-Lewis 2014.)
Indeed, the ‘science of human behaviour’ in the economic domain has made huge strides during the past 20 years or so, in the advances in applied microeconomics. More data, advances in econometric techniques, new methodologies such as randomised control trials and field experiments, interdisciplinary work with psychology in particular, the revival of economic history, and urban economics, have all contributed to scientific advance (for a survey, see Coyle 2007). This progress is certainly ‘mainstream’; it should be celebrated, and students should be agitating to be taught more about it.
Finally, it should be added that – not least because of such advances in much recent research in economics – there is by no means universal agreement among academic economists that substantial curriculum reform is needed. This reflects their view – in contrast to Andrew Haldane’s – that the basic building blocks of the subject remain solid.
This is therefore a debate with some distance to go, and not least because of the international character of the academic discipline. It seems highly unlikely, though, that undergraduate economics courses will not have changed considerably in character five or ten years from now.
Coyle, Diane (2007), The Soulful Science, Princeton University Press.