Magazine article Teaching Business & Economics

Dealing with Politics in the Applied Macroeconomics Classroom

Magazine article Teaching Business & Economics

Dealing with Politics in the Applied Macroeconomics Classroom

Article excerpt

These are interesting times to be an instructor of macroeconomics. I tell my macroeconomics students that my goal is to help them understand what they read and hear in the media and to encourage them to develop their own opinions about what they learn when doing so. This is becoming an increasingly difficult task. How do instructors of macroeconomic principles use current events in a partisan political climate to teach applied economic policy while remaining apolitical themselves? Is it enough to tell students that economic theory itself is apolitical and that politicians latch onto the theories that match their own ideologies? Is it even a true claim? How does one reconcile the very public disagreements between popular political macroeconomists such as Paul Krugman, Alan Blinder, Robert Barro and Arthur Laffer? What does one say when students who are members of the new 'Tea Party' bring up Hayek, von Mises or Say? What follows are guidelines I use in my own teaching when dealing with politics in the applied macroeconomics classroom.

Guideline #1: Talk about it up front

Whether or not applied macroeconomics is inherently political is not clear. But if it is not political, then any good economist would make a good Presidential economic advisor. The problem is that there are different economic ideologies, just as there are different political ideologies. In a recent blog post', Greg Mankiw tells us about a test that Charles L. Schultze, chief economist for President Carter, suggested for determining a conservative from a liberal economist:

Ask each to fill in the blanks in this sentence with the words 'long' and 'shorf: 'Take care of the run and the run will take care of itself

And, of course, if one chooses long (short) and short (long), respectively, then he/she is conservative (liberal). This phrase highlights the distinct economic ideologies revolving around the dassical/Keynesian debate and, in many ways, these ideologies can be attributed to conservative and liberal political views. (Keynes once said, 'The long run is a misleading guide to current affairs. In the long run we are all dead.') In any case, talking about it up front gives students a sense about the difficulties of completely separating politics from macroeconomics when using applied real world examples.

Guideline #2: Try to be balanced in your approach

Having political views as an economist does not mean that an applied approach in macroeconomics has to lean right or left based on who is teaching. One could have a balanced, emotionless approach by teaching macroeconomic theory as it has developed in a historical context and by assuming that the government is a benevolent central planner. To do so, we would almost certainly have to exclude using current events and sources such as cable news, newspapers, magazines and the Internet. To include current events and media, one may have to take a more 'balance of models' approach.

Time constraints may influence what topics and models an instructor will cover and the depth of that coverage. Emphasising that there are several approaches to understanding economic events and that they often conflict may seem confusing to students, but it promotes something else that is valuable to all budding economists - critical thinking.

'Critical thinking begins when students learn that alternative thought structures exist, each consistent with the real material world.' (Knoedler & Underwood, 2003)

Done correctly, students will take with them a new understanding of their own ideology.

Guideline #3: Try to be nonbiased in your approach

Using what I call the 'on-the-other-hand' approach is essentially pointing out how different economic models can be used to explain the same data. When looking at current events, explain that politicians latch onto economic models which are convenient for their own beliefs or which they think are best for the current situation. When opposing politicians/ economists support inconsistent policies, it may help that students understand why their opinions differ, rather than suggesting that the one policy is right and the other is wrong. …

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