Download Ideas for the Economics Lecture

I cannot see that Lectures can do
so much good as reading the Books
from which the Lectures are taken.
• I know nothing that can be best taught by
Lectures except where experiments are to
be shown. You may teach Chemistry by
Lectures. You cannot teach making of shoes by Lectures!
• Lectures were once useful; but now, when all can read, and
Books are so numerous, Lectures are unnecessary. If your
attention fails, and you miss part of the Lecture, it is lost.
You cannot go back as you can upon a Book.
– Boswell’s Life of Samuel Johnson (1791)
These same criticisms with the lecture
format have been repeated again and
again over the past 200 years
• The pace is set by the lecturer, may be too fast or too slow
• Taking notes distracts from hearing the lecture, but if you
do not take notes it is hard to remember what was said in
the lecture
• You can’t go back and forth in a lecture
• You can’t stop to take a rest in the middle of a lecture
• Books give a more visual reinforcement than lectures
Yet the lecture format has
had great staying power
• Smith (Glasgow), Faraday (Royal Institution), Wilson
(Princeton), Gurley (Stanford), Denslow (Florida) ,...
• Here is what an admiring Wilson said of Smith:
– “He constantly refreshed and rewarded his hearers...by
bringing them to those clear streams of practical
wisdom and happy illustration which everywhere
irrigate his expositions.”
Some advantages of the lecture
Arthur Quillier-Couch (1927),
Lecture on Lectures
• Hearer comes in a state of excitement,
anticipation, like the start of a sporting event
• People coming together with a common purpose
can be a lifting experience
• Listening to a person with experience can be
inspiring in and of itself
• There is a penetrating power in the human voice,
as politicians know
Surprise side economics
• Lecture ideas to make economics
–
–
–
–
Less abstract
More intuitive
More relevant
More memorable
• Combine entertainment with education
– multimedia: animated slides, audio, video,
internet
• Not for everybody!
• Designed for live lectures
– but there is a role for an online component
Ideas for teaching skiing:
No single way is best for all
OLD
NEW
03_08A
PRICE
Supply curve
300
280
260
240
Equilibrium
price rises
New intersection
220
200
New
demand
curve
180
160
Equilibrium
quantity rises
140
Demand curve
0
5
10
15
20
QUANTITY
I bet you wonder how I knew
about your plans to make me blue
with some other guy you knew before.
Between the two of us guys
you know I love you more.
It took me by surprise
(drive me crazy),
when I found out yesterday.
Don’t you know that ...
I heard it through the grapevine.
How much longer would you be mine?
Oh I heard it through the grapevine,
and I’m just about to lose my mind.
Honey, Honey, Yea.
Heard it through the grapevine, how
much longer would you be mine, baby
oooo oooo oo oo
08_05
AT C
QUANTITY
08_05
AL
QUANTITY
08_05
BE
QUANTITY
0
BE AT C AL
QUANTITY
Economies of Scale
Consider the Pin-Making Process
“One man draws out the wire, another straights it, a third cuts it, a
fourth points it, a fifth grinds it at the top for receiving the head; to
make the head requires two or three distinct operations…I have seen a
small manufactory of this kind where ten men only were employed.
Those ten persons, therefore, could make among them upwards of
forty-eight thousand pins in a day. Each person, therefore, making a
tenth part of forty-eight thousand pins…. But if they had all wrought
separately and independently, and without any of them having been
educated to this peculiar business, they certainly could not each of
them have made twenty, perhaps not one pin in a day; that is,
certainly, not the two hundred and fortieth, perhaps not the four
thousand eight hundredth part of what they are at present capable of
performing, in consequence of a proper division and combination of
their different operations. ”
-- Adam Smith,Wealth of Nations, Book I, Chapter I
Let me tell you a story
about William Swain
• He was a young man who traveled from
New York to California in 1849
– See map for the route
• His goal: Find gold and go back home
• Thousands just like him: the Forty-Niners
– Much like an army
– No “supply corps” but news, food, tools,
entertainment was supplied
• The invisible hand at work
The story goes on. Let me tell
you about hydraulic mining
• High pressure water from the Sierra
mountains
• Break down the canyon walls to get more
gold
– caused huge damage to landscape
– impeded navigation downstream
• An externality thwarting the invisible hand
To get a gut-feeling for the idea
of comparative advantage, let’s
imagine 2 people with 2 skills:
lawyer
economist
What are the possible remedies
for externalities?
• Private Remedies Let the individuals work
it out themselves
– Need to define property rights
– But transaction costs and free rider problem
might prevent the private remedy
IT’S MACRO
Put on your
Big Picture Glasses
Employment release on the
internet
We will answer their demands for
a gold standard by saying to them:
You shall not press down
upon the brow of labor
this crown of thorns.
You shall not crucify
mankind upon a
cross of gold.
A Lesson for Prospective
Central Bankers
• We want to suppose there is a shift in
monetary policy
– This shift is a common tactical mistake
• What are the short run and the long run
economic effects?
• What are the political implications?
• To learn this lesson let’s first observe some
“Textbook Maneuvers”
WELCOME TO
A school for central bankers.
Dedicated to teaching the science
and art of monetary policy.
Key Dialogue
• Tom Cruise
– You don’t have time to think up there. If you
think your dead.
• Kelly McGillis
– That’s a big gamble with a $30,000,000 plane
Lieutenant. Let me teach you about the “gain
then pain scenario”. It starts with the Fed
cutting interest rates when inflation is not too
low and real GDP is just about equal to
potential GDP.
“Gain then pain” scenario
• Start: inflation rate = 2%,
real GDP = potential GDP
– Fed cuts interest rate
• buys bonds
– Economy booms---the “gain”
• real GDP> potential GDP
– Inflation starts to rise
– Fed must raise interest rate
• End: Economy returns to potential
– real GDP = potential GDP
– inflation is higher than 2%---the “pain”
Could you sketch the “pain then
gain” scenario by hand?
A case where economic principles
were ignored in the economic policy
Summary of survey results of the
online lecture experiment
• survey designed to assess students usage
and perceived value
– no direct assessment of effects on exam
performance
• about 2/3 response rate
• may be biased against computer users
because survey form was handed out in a
lecture
How often did watch online
lectures?
•
•
•
•
Once or more 45%
1 to 4 times 30%
5 to 9 times 8%
10 or more times 7%
How long in a typical single
sitting?
• 30+ minutes 65%
• 15-30 minutes 20%
• 0-15 minutes 15%
Main purpose of watching Econ 1 online?
• To replace having to attend lectures in person
62%
• To review material from lectures attended 18%
• Both of above 9%
• Other 11%
Learn more going to live lecture
or watching online?
(among online watchers)
• I learn more online 15%
• I learn the same online versus in lecture 42%
• I learn more by attending the lecture in person 44%
Would you feel comfortable
taking a course for credit using
Stanford Online exclusively?
• Yes
• No
Typical pro “live lecture” remarks
• Going to the lecture live is part of the
educational experience
• I get distracted when I watch in my own room
• It wouldn’t be worth the $30,000 tuition for a
computer to teach me
• I wouldn’t have the discipline to sit down in
front of a computer and watch it
• A fully on-line course would be insane
• I feel I learn better in person with others
• I am bad at computers
Typical pro “online” remarks
• I can stretch a one hour lecture into a two
hour lecture, so I can better understand the
material
• I feel I learned as much online as if I came
to class
• Same things as large lectures
• I prefer the online system because you can
view the lecture at your own pace and stop
anywhere a difficult concept arises and
spend time figuring it out
Preliminary Conclusions from Survey
• Online lectures are a good substitute for live
lectures for some, but not most, students
• Even online students express a need for a
teacher to ask questions to
• Indexed online lecture is a good study aid
– You can go back to that part you missed
• In sum, live lectures will not be driven out
by the internet any more than they were
driven out by books two hundred years ago
– But internet will be useful (like books) and may
even enhance lectures (like books)