Academic journal article Journal of Economics and Economic Education Research

Technology: Connecting the Macro with the Micro

Academic journal article Journal of Economics and Economic Education Research

Technology: Connecting the Macro with the Micro

Article excerpt

ABSTRACT

This paper presents unique lecture material for a workshop on the role of technology in the economy. Technology is the vehicle to show the connection between macroeconomic and microeconomic concepts, a relationship neglected in many classrooms. The topic area is space and research and development (R&D). Technology's role in growth and development develops into the issue of public funding for R&D and NASA's technology transfer program. Tempur foam is examined as a successful innovation that evolved into a public company, the microeconomic application of a macroeconomic idea. History, government and mathematics are included to increase the applications of the lecture.

INTRODUCTION

In the current environment of testing combined with a lack of time in the classroom, economics becomes a more difficult subject to teach. Modern education requires that students understand the relationships between ideas and how those concepts interact. Unfortunately, integrating material is easier said than done. As one begins to draw the comparisons, the story becomes longer and the possibility that the students become lost increases. The length of the example and the knowledge gained by the students are sometimes inversely related. Thus, clear examples of economic ideas combined with other disciplines are needed to increase the opportunity to teach economics and the probability of student understanding. This paper presents a unique way to consider the roles and interaction between basic macroeconomics and microeconomic concepts.

Through work for the West Texas Center for Economic Education, it became clear that one area the teachers found difficulty with is the production possibilities frontier (PPF). While they were able to define and apply it to simple issues, the teachers did not know how to connect it to microeconomics. To them, it is purely macro. While the production possibilities frontier is a macroeconomic idea, its movements affect the microeconomic world and visa versa. The PPF is dynamic not static. Thus, the issue becomes how the PPF affects the firm and how the firm affects the PPF.

By not showing the students how the entire economy interacts, the students are left without the ability to see how the macroeconomic ideas and policies of the country affect themselves as individuals and their firms. One reason young individuals vote at reduced levels to other age groups may be because they don't see how the various government actions affect them. Showing how macroeconomic ideas and microeconomic ideas are interrelated may encourage students to see themselves in the economy.

The Executive Summary of the National Summit on Economic and Financial Literacy focuses on the areas lacking in economic education (NCEE, 2002). In particular, economic education is important for informed citizens. It also identifies the need to integrated examples with other disciplines. The findings of the Survey of the States Report Card (NCEE, 2003) coincide with Executive Summary. Most states short change economic education even it they acknowledge its importance. Both reports note that the comprehensive understanding of an idea involves knowing how it affects and is affected by other concepts. This lecture addresses this concern.

As a focal point for the workshop, space was chosen. With the renewed interest in space, space technology is timely and interesting to students. In addition, space technology allows the teacher to integrate economics with science, history, government, and mathematics.

Economics is one discipline that connects the other disciplines to each other. Showing how the technology from space affects our everyday lives increases the importance and relevance of science. Science benefits because economics tells us why it is important and how society uses it. A historical comparison is included to show how society has always explored and innovated. Government expenditures and the role of government funding for research adds a political element to the discussion. …

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