The Teaching of Economics

Article excerpt

A little less than forty years ago, I came out with the first edition of my book Guide to Economics for Filipinos, a text book for high school and first year college students taking an introductory course in economics. At least two generations of Filipinos have used this text book to understand how prices of consumer products are determined in a market economy, how the government fights inflation, how the foreign exchange rate is determined by the demand for and supply of U.S. dollars and other everyday happenings in the national economy. In a few weeks, the seventh edition of Guide will be launched by Sinagtala Publishers. What have I learned from writing seven editions of the book in 40 years? What feedback have I gotten from both teachers and students about the strengths and weaknesses of the various editions?

First, let me acknowledge the intellectual debt that many of us economics textbook writers in the 1960s and 1970s owed to the late Paul A. Samuelson, who died last December 2009 at the age of 94. Especially for those of us economists who took our graduate studies in the U.S., Samuelson--who received the Nobel Prize in Economics in 1970--was the model we tried to emulate in writing a textbook for beginners. He wrote the most popular college textbook in economics in the history of American education. First published in 1948, the book simply titled "Economics" was the best selling textbook in American colleges and universities for some thirty years. It was translated into 20 languages and was still selling 50,000 copies a year fifty years after it first appeared.

Samuelson, who wrote his doctoral dissertation on the mathematical foundations of economic analysis, influenced us to introduce a great deal of geometric analysis in explaining the so-called laws of economics, e.g. supply and demand, profit maximization, consumer welfare maximization, diminishing returns, etc. In contrast with earlier textbooks which were highly descriptive, those of us who were influenced by Samuelson tried to challenge the beginning students to sharpen their analytical skills by using mathematical logic in understanding what happens to its price when the demand for a product increases; what happens to the price of a product when a specific tax is imposed on it; what happens to the national income when the level of investments falls; what happens to interest rates if the money supply is increased by the Central Bank, etc. Before we realized it fully, our textbooks started looking more and more like those in geometry with lots and lots of graphic illustrations.

I have gotten a lot of feedback from both teachers and students that the mathematical approaches found in our textbooks made the study of economics too esoteric and far from the real problems faced by a country like the Philippines, such as mass poverty, high rates of unemployment, unequal distribution of income, lack of global competitiveness, etc. These critics say that neat mathematical models do not explain most of what is ailing the Philippine economy. …