With the new school year starting, there is good news for incoming
students of economics—and anybody else who wants to learn about issues
like inequality, globalization, and the most efficient ways to tackle
climate change. A group of economists from both sides of the Atlantic,
part of a project called CORE Econ, has put together a new introductory
economics curriculum, one that is modern, comprehensive, and freely
available online.
In this country, many colleges encourage Econ 101 students to buy (or rent) expensive textbooks, which can cost up to three hundred dollars, or even more for some hardcover editions. The
CORE curriculum includes a lengthy e-book titled “The Economy,” lecture
slides, and quizzes to test understanding. Some of the material has
already been used successfully at colleges like University College
London and Sciences Po, in Paris.
The project is a collaborative effort that emerged after the world financial crisis
of 2008–9, and the ensuing Great Recession, when many
students (and teachers) complained that existing textbooks didn’t do a
good job of explaining what was happening. In many countries, groups of
students demanded an overhaul in how economics was taught, with less
emphasis on free-market doctrines and more emphasis on real-world
problems.
Traditional, wallet-busting introductory textbooks do cover topics like
pollution, rising inequality, and speculative busts. But in many cases
this material comes after lengthy explanations of more traditional
topics: supply-and-demand curves, consumer preferences, the theory of
the firm, gains from trade, and the efficiency properties of atomized,
competitive markets. In his highly popular “Principles of Economics,” Harvard’s N. Gregory Mankiw begins by listing a set of ten basic principles,
which include “Rational people think at the margin,” “Trade can make
everybody better off,” and “Markets are usually a good way to organize
economic activity.”
The CORE approach isn’t particularly radical. (Students looking for
expositions of Marxian economics or Modern Monetary Theory will have to
look elsewhere.) But it treats perfectly competitive markets as special
cases rather than the norm, trying to incorporate from the very beginning the progress
economists have made during the past forty years or so in analyzing more
complex situations: when firms have some monopoly power; people aren’t
fully rational; a lot of key information is privately held; and the gains
generated by trade, innovation, and finance are distributed very
unevenly. The CORE curriculum also takes economic history seriously.
The e-book begins with a discussion of inequality. One of first things
students learn is that, in 2014, the “90/10 ratio”—the average income of
the richest ten per cent of households divided by the average income of
the poorest ten per cent—was 5.4 in Norway, sixteen in the United
States, and a hundred and forty-five in Botswana. Then comes a
discussion of how to measure standards of living, and a section on the
famous “hockey stick” graph, which shows how these standards have risen
exponentially since the industrial revolution.
The text stresses that technical progress is the primary force driving
economic growth. Citing the Yale economist William Nordhaus’s famous study of the development of electric
lighting, it illustrates how standard economic statistics, such as the gross domestic product,
sometimes fail to fully account for this progress. Befitting a
twenty-first-century text, sections devoted to the causes and
consequences of technological innovation recur throughout the e-book,
and the information economy receives its own chapter. So do
globalization, the environment, and economic cataclysms, such as the
Depression and the global financial crisis.
Given the breadth of its coverage, the CORE curriculum may be
challenging to some students, but it takes advantage of being a native
online product. (In Britain, a paperback version of the e-book is also
available.) The presentation features lots of graphs and charts, and, in
some cases, students can download data sets to create their own. The
quizzes are interactive, and the presentation is enlivened by potted
biographies of famous dead economists (Smith, Keynes, etc.) as well as
video interviews with eminent living ones, such as Thomas Piketty.
Unlike most textbooks, the CORE e-book was produced by a large team of
collaborators. More than twenty economists from both sides of the
Atlantic and from India, Colombia, Chile, and Turkey contributed to it.
(Two of them, Suresh Naidu and Rajiv Sethi, teach at Columbia and
Barnard, respectively.) The coördinators of the project were Wendy Carlin, of
University College London, Sam Bowles, of the Santa Fe Institute, and
Margaret Stevens, of Oxford University. The Institute for New Economic
Thinking provided some funding to help get things off the ground.
The members of the CORE team deserve credit for responding to the
critics of economics without pandering to them. They have produced a
careful but engrossing curriculum that will hopefully draw more young
people into economics, and encourage them to continue their studies. (At
University College London, students who took the CORE course did better
in subsequent economics classes than earlier cohorts who took a more
traditional introductory course.)
But the CORE material isn’t just for incoming students. It will also
reward the attention of general readers and people who think they are
already reasonably conversant with economics. (Personal testimony:
Having gone through some of the material in detail, I think I might finally understand the Malthusian model and how to calculate bank leverage ratios!) All this, and the price can’t be beat.