Download Economics gets a bad rap

The Dismal Science:
Economics in Plain English
Facilitator: Chen Song
Term: Spring 2009
Location: Monroe Hill House
Meeting Dates and Times: Section 1: Tuesdays 3:30 – 5:00
Section 2: Wednesdays 3:30 – 5:00 Course Topic and Objectives
Economics gets a bad rap. The subject is often poorly understood and economists, when they actually are listened to, are generally ignored. This is partly the fault of economists, who rarely venture outside of the ivory tower to write for the general public. As a fourth­year economics major, I constantly find myself defending my field of study and explaining subtle concepts to both non­economics majors and new economics majors. This class is the product of such dialogues and has been a work in progress over the last year. It is an attempt to explain economics in plain English for non­economists as well as provide a link between the topics introduced in Econ 201 through Econ 302 and more advanced topics and the real world applications of economic theory that many of my fellow students found lacking in their introductory courses. The other factor that motivated me to organize this course is that, whether we recognize it or not, we all practice economics in some form. The real question is whether or not we practice it well. It is a question of whether or not we are informed enough to make good economic decisions ourselves or elect leaders with good economic policies. The ultimate goal of this class is simply to help students become better­informed citizens. Qualifications
I am a fourth­year economics major with extensive coursework background and research experience. Economics is a passion of mine and I would like to share what I have glimpsed of this beautiful discipline with others. As for teaching experience, this would be my fourth year teaching a short course at UVa. Tentative Class Outline Class 1: Introduction: The Dismal Science After administrative functions, we will introduce the basic assumptions and key concepts in economics that we will build upon in later classes. We will introduce the tools of the trade: constructing mathematical models such as the basic standard model of microeconomics and the Malthusian model as well as becoming acquainted with more recent econometric approaches to modeling. Readings
Levitt, Steven J. Where Did All The Criminals Go?
Levitt, Steven J. Schoolteachers and Sumo Wrestlers
Class 2: The Hidden Side of Everything
In the first class, we started to “build” an economy using models. In this class we will extend that approach and consider economic growth to further explore the questions raised in the first class. Obviously, we will need to address what drives economic growth, which we will approach using the historical record and the Solow Model of exogenous growth. On the other side of the coin, people often ask about decline ­ particularly whether or not the U.S. is in economic decline. This is a particularly fruitful question, and we can glean insights from it relating to the key concepts of opportunity costs and income and substitution effects by looking at the growth of cities and evolutionary biology. Readings
Krugman, Paul. The Myth of Asia’s Miracle
Krugman, Paul. The Age of Diminished Expectations
Optional: Coyle, Diane. What Makes Economies Grow?
Class 3: Making Money
Who is the Federal Reserve and what does it do? Why does Wall Street get so much attention and what does it mean anyway? This class will introduce key concepts in money and banking to give students a basic understanding of our financial markets. We will also take some time to discuss the cause and implications of the current financial crisis. Readings
Blumberg, Alex. The Giant Pool of Money
Optional: Pratchett, Terry. Going Postal
Optional: Malkiel, Burton. A Random Walk Down Wall Street. Class 4: International Trade
Global international trade in 2005 reached a volume of $12.6 trillion and is certainly expected to continue to grow and continue to affect billions of people. Yet for something that impacts so many people, international trade is largely little understood. We will discuss the impact of globalization and international trade on people’s welfare, economic growth, immigration, job creation and job loss, and try to make some sense of it all. Readings
Krugman, Paul. Downsizing Downsizing Florida, Richard. The World is Spiky
Wheelan, Charles. Naked Economics
Bhagwati, Jagdesh. In Defense of Globalization.
Class 5: Development Economics
Here we return to the fundamental question of economics: how do we, using our limited resources, provide the best life for our people? How can we ensure some basic level of substance and dignity for every man, woman, and child on this planet? This one question begets thousands of other questions. This class will try to set those questions up in a sensible manner. We will take what we have learned of basic economic principals and apply them to situations such as extreme poverty, child labor, drug trafficking, and sex slavery around the world. Readings
Sen, Amartya. Development as Freedom
Sachs, Jeffery. The End of Poverty
Roderick, Dani. Trading in Illusions
Easterly, William. Where does the Money Go? Class 6: Market Failures: Environmental Economics
Until now, this class has introduced neoclassical models of economics based on certain assumptions. This class will relax some of those assumptions and examine situations that exhibit undefined property rights, non­rivalry, and public goods by exploring environmental economics using game theory, Coasian analysis, and the Hoteling Hypothesis. Readings
Bruce, Colin. Conned Again Watson
Solow, Robert. The Economics of Resources or the Resources of Economics Optional: Coase, Ronald. The Problem of Social Cost
Class 7: Market Failures 2: Health Care
If the last election was any indicator, public health will likely command much attention from the new administration. In this class, we will consider the implications of asymmetric information, moral hazard, and adverse selection in framing our understanding of the issues surrounding healthcare in the U.S. Levitt, Steven. Cracking the Real Estate Code
Wheelan, Charles. Economics of Information: McDonalds didn’t create a better hamburger. Optional: Akerlof, George. The Market for Lemons
Class 8: Government Intervention and the Political Economy Having explored where market failures exist, we examined the role of government in providing solutions and evaluate the efficacy of various policy instruments. This class will continue that analysis, looking at, for example, healthcare, welfare, tariffs, financial redistribution, regulation, etc. We will consider circumstances in which government intervention is desirable and situations where it can be counterproductive. We will also consider the implications of the political economy and policy instruments based on what we have learned in previous classes. Readings
Wheelan, Charles. Debunking One of the Worst Ideas in Economics
Wheelan, Charles. When Protecting Jobs Only Destroys Them
Class 9: Economics and the Meaning of Life
This last class will try to pull everything together and look towards economic policies to address problems that face us in the 21st century. We will examine issues such as inequality and economics in public policy. Finally, we will close with a discussion of economics, happiness, and the meaning of life. Readings
Krugman, Paul. The CPI and the Rat Race
Krugman, Paul. White Collars Turn Blue
Wheelan, Charles. Conclusion