« Earnings in the "Good Old Days" | Main | Stability and counterfactual conditionals »


Feed You can follow this conversation by subscribing to the comment feed for this post.

"they can't really appreciate micro without seeing where it fits into (or doesn't fit into) the big macro picture"

One thing to consider here is people in many other disciplines have a need for micro, and this need would be just the same if macro didn't exist as a field. For instance, those studying marketing or industrial engineering should be able to have vast appreciations for micro without seeing how it fits in to the macro picture.

justin: yep. That's one of those commonsense what's best for students arguments that I am fighting my lonely rearguard action to resist.

As an amateur who has been following macro debates since the early 90s - so I guess I'm about Noah's age - I see it in the following way. To use your example of Newtonian physics, micro is like Quantum Mechanics and macro is like Newtonian physics, in that micro is a subset of the less accurate, more general macro. However, if used properly, Newtonian physics works. They employed Newtonian physics to put a man on the moon. They didn't need Quantum Mechanics which of course does a better job of describing reality.

As Konczal and Krugman point out, many economists got the macro issues around the financial crisis and ensuing recession and recovery wrong. Many students will wonder why this is the case. Perhaps part of the problem was the textbooks.

Peter K; fun thing is I view micro and macro in reverse to your example. Newtonian physics is simple and straightforward. It's at the quantum level that things get weird. You can't add speeds. Time and space contract. A particle can be a wave and vive-versa, in fact both at the same time, sometimes. Your wave function means you are everywhere at the same time so an electron can jump a potential barrier hogher than its own energy. Nah. It didn't jump, it was already there via its wave function. Einstein-Podolsky-Rosen mean that particle are entangled... Quantum physicist can teach Newton anytime. The reverse isn't. Same as for macro guy teaching micro in their sleep while Chicago guys just can't understand macro (they mico in their heads, whatever they think.)

Nick: yes. Fallacy of composition. But also "money". And "time". Money being an intertemporal mean of purchasing power transfer via its memory function.
And the balance of payments. Nobody in a pure micro world would rejoice in a current account surplus. But in a macro world, people can and do because they can make the mistake that holding money instead of goods is better.
I am basically a micro guy but veered macro in the last few years because things are funnier there.
But I already came in favor of splitting money into /kraputnics" and "gloupnology", if you recall...

Rather than having your intro econ course last for a year, why not just double up on intensity? It seems to solve some of the issues Nick raised.

To clarify, at my uni a standard single semester course is worth 3 credit points with 3 hours of lectures a week. Couldn't you organize intro econ as a 6 credit, 6 hour a week course, with the first half of semester spent on micro and the second half on macro? Or, alternatively, run the micro and macro alongside each other - 3 hours a week each (this would take some planning, but is possibly the best of both worlds)?

Where I did my undergrad a standard course was worth 10 credit points. In econ and the business school, 3 hours of lectures a week got you the 10 credit points. But in science and engineering, it took 6 hours of lectures a week to get the 10 credit points. First year math courses were split into calculus and algebra streams, each with as much work as a single econ course but for only half the credit!

At Laval inh the '70's, we did what Evan suggest. Intro ran side-by-side.

I can see both sides. As it happens, I'm teaching Macro right now to a class of students who haven't taken micro. Yes, I do have to talk about things that would otherwise have been in micro, like preferences and introducing supply and demand curves. But as you point out, the fallacy of composition means that these things aren't really all that clearly related to their micro-analogues anyway.

I think there is something to be said about the fact that microeconomics has broadly been much more successful than macro as a science. But, the micro that was successful isn't the micro we teach in principles. My experience is that principles micro students always leave the course thinking either that the free market is a magical fairy land that never ever has any failures whatsoever, or else thinking that free markets are always massive failures and that if you want it done right, you gotta get the government to do it. Neither view is remotely close to the truth.

By contrast, principles macro presents a much less stylized, much more data-driven view of economics, even if macro the research field doesn't quite live up to that promise.

Micro has reached Keynes dream: boring as dentists.
Though they sometimes forget their basics as if they were battling mocros.
Anyone writing "the economics of deregulation" not thinking about the effects of an empty Samuelson core?

At Laval in the '70's, we did what Evan suggest. Intro ran side-by-side.

That's still the way it's taught at Laval. Principes micro and Principes macro are two separate half courses, and students are expected to take both in their first term in the program.

We have one double-speed section of intro, in the Winter Term. And almost all courses in the Summer run at double-speed too. (That means 6 hours of classes a week instead of the regular 3.) I taught at quadruple-speed in Havana, for logistical reasons. It has its downside, since there is less time to reflect, or catch up, or turn stuff around.

The side-by-side micro+macro is interesting. I had never thought about that. They are thinking about one while they take the other, which is good. But in some ways it is the worst of both worlds, since they have done neither when they take the other. Dunno.

Justin--I have taught economics to MBA students who have never had an econ course (it's somewhat surprising how many of MBA students that is). I would argue that marketing students need to know both micro and macro in order to understand what works in marketing and what does not, to understand how economy-wide changes affect individual product markets (e.g., why some sectors of an economy are more strongly affected either by slumps or booms--income elasticity of demand being a key concept here, along with income changes). The relevance of macro (and micro) for finance seems to me immediately apparent...

Nick, can you point to a resource which answers "the biggest of all macro questions" ? I've looked at some macro texts, but they either ignore or dance around the answer. Is the answer "money is different frmo all goods"?

It is always important when teaching models to also teach their limits, to know when and where they apply and when and where they may not. Micro as classical physics is taught first but its limits are also taught, large masses and relativistic speeds, small masses and quantum forces, even though macro. That it is incomplete and only approximate along with some of its problems should be made evident from the start.

Last year I tried an experiment in a two-quarter "program" (what we call courses at Evergreen -- they're full-time and interdisciplinary). I did the first half of micro and the first half of macro in the first quarter and the second half of each in the second. It seemed to work pretty well. Students who left after one quarter and passed the exams got a generalized intro to econ credit, like they would in a one-quarter "economic problems" course. It helped (of course) that I could use chapters from my own textbooks, since each has a sort of once-through-quickly-followed-by-returning-in-greater-depth format. (This is especially true of the macro, since I wanted to get students into data and the econ blogosphere as quickly as possible.)

ISTM that the answer to this question would also depend in no small part on what your theoretical approach to macro is. Maybe it would be best to teach growth theory and the modern, monetary-disequilibrium approach to macro as part of the first-semester micro course, then have a second-semester course focused on the system of national accounts (and economic data, more generally) plus assorted macro topics.

Nick, I think the discipline of economics is, in a sense, much bigger than it was back in the day. While you've been teaching intro econ, there have been thousands of economists working on stretching the frontiers of the discipline.

It's got to the point when the discipline of econ is so big that it's not possible for any one person to understand more than a part of it. One could argue (I don't know if this is correct, but I'll argue it for the sake of argument) that micro and macro are on their way to becoming separate disciplines. This is why there is it is becoming increasingly difficult to sell the intellectual argument against dividing the two halves of intro - people really do see the two halves as distinctly different entities.

I haven't taught intro (either side) for years (decades?), but do teach intermediate micro. We've interviewed for teaching professor positions in the past while, and frequently have the candidates give a "typical" intermediate macro lecture as their job presentation - since macro is where we have a shortage of teachers. I've found the lectures incredibly confusing, and not because of the presenters: I just don't understand the content: it's vague. To be fair, when I teach general equilibrium in micro (the basic 2x2x2 model), I point out to students that it can get very complicated, and that is one reason why macro is so hard.

Nick. I remember telling students many years ago that just as there were microfoundations of macro, there were macro foundations of micro.

Macro is basically micro but with only a few variables. Employment, central bank interest rates, CPI inflation....I think it will shortly be obsolete without including tech advances/regressions (tech advances have been considered missing in macro by some for many decades) and efficacy of Crowns/civil-service. Education has been estimated to be 80% of human capital and employment only covers it a bit.
Macro is useful because we put very well-read and learned individuals as Central Bankers. CBC just did a story about Goldman Sachs shuttling aluminum back and forth between warehouses to inflate the price and earn rent. That is micro's problem: RW communism.

The comments to this entry are closed.

Search this site

  • Google

Blog powered by Typepad