What economics would I like to be taught?

The Edinburgh Economics Blog is open to contributions from our students. The first student to do so is Peng Shao, who reflects upon the famous LSE public debate on what kind of Economics should be taught. If you would like to contribute to the blog, send your texts to ssanchez@staffmail.ed.ac.uk

The set of answers to this question seemed all quite clear when I listened to LSE’s “What kind of economics should we teach?” podcast. However, it seems quite daunting when, with some afterthoughts, I have to put them as written on the blog. But with three guiding issues being mathematics, what models & scepticism and purpose of economics, the question seem much easier to handle. So I have decided to make them as my outline.

Since our first online test in Economics 1 A, we all became aware that Economics has normative and positive aspects. I thought to focus on the positive aspect will be easier to handle so I have decided to write only on that instead. After reading Freakonomics and some papers, many would realise that defining economics’ purpose is really difficult. But a central piece that is common to all is its attempt to describe phenomena through its “economic reasoning sense”.

Being an attempt, it is clear there is no absolute certainty to its accuracy and there should be always room for improvement. And luckily, we have had no lecturers trying to convince us with model’s truth above reality when the two clearly don’t meet. However, this attempt, as a 2^nd year undergraduate, is largely restricted to the emotionless and perfect calculating pleasure machines.

So are real economic agents really that mechanical? Having studied Economics for only two years, I have no doubt that rational models shed interesting explanation. But as we have two spheres in our brain, it seems we have left out a bit on the other side of economic behaviour.

Let it be market discipline or any other mechanisms to discipline us to be logical. We will still remain human and commit errors that may lead to a bubble or a recession. As Einstein had once said “Two things are infinite: the universe and human stupidity…”; I think we will be just doomed to be silly for some parts. No doubt again, in the long run, all this just get weeded out due to the size of data set and may become part of a learning curve.

But looking only at the long run can seem quite similar as looking through a window filled with many small chips - eventually we will miss something interesting and important due to the distortions of our sight. This possibility makes field like behavioural economics quite relevant to be part of this attempt, even in undergraduate level.

Now comes the part you won’t stop hearing criticism about it in economics from outside the circle, employing mathematics. Mathematics does simplify paragraphs or pages into one or few equations. Its makes an argument clearer than any words can describe intuitively and deduce useful conclusions without writing a thesis or two. I am not fussed about its use. But its justification to its use is, from what I recall, rarely talked about.

Why must we be wannabe physicist is an important issue to be discussed and taught on. Other than its usefulness for precision on analysing economic outcomes, early on courses discussing the troubles which non-mathematical economic approach faced can be a good motivator to students to overcome and prepare for the “mathematic nightmare” in Economics.

By now, I have realised that no existing word constraint has left me to ramble on a bit too much. I am sure I may take some risk to comment on things I may be quite ignorant about. But I guess being a student allows me to do so but I still beg your pardons.