Book review: What's the Use of Economics?

The textbook The Economy, by CORE Economics (and which I use in my ECONS101 class), is marketed as teaching economics "as if the last three decades had happened". The genesis of that textbook project, with the first edition released in 2014 (as I noted here), was a conference hosted by the Bank of England and the Government Economic Service in February 2012, that "brought employers and academics together to discuss the state of economics and the state of economics education". This was particularly important in the wake of the Global Financial Crisis.

One other outcome of that conference was the book What's the Use of Economics?, edited by Diane Coyle and featuring contributions from a number of conference attendees. The book is divided into four parts. The first part looks at what employers of economists want. The second part covers economic methodology and the implications for teaching, while the third part looks more specifically at macroeconomics - especially important after the financial crisis. Finally, the last part covers reform of the undergraduate economics curriculum in more detail, focusing on the UK (of course).

So, what do employers of economists want? The authors in this part of the book highlighted a number of things that are missing from the curriculum at present, from the perspective of employers. Coyle summarised these missing things well in the introductory chapter, noting that:

The missing ingredients listed here are

greater awareness of history or real-world context,

practical knowledge of data handling,

the ability to communicate technical results to non-economists,

understanding of the limitations of modelling or of economic methodology,

a more pluralistic approach to teaching the subject, and

a combination of inductive and deductive reasoning.

I think there would have been (and probably still would be) agreement among many economists that more economic history and more history of economic thought would be welcome additions to the economics curriculum, and indeed the second part of the book confirms that. The challenge, as always, is what to omit in order to fit the additional content and context in existing courses. Stand-alone courses on economic history or history of economic thought are unlikely to prove popular enough to remain sustainable.

One of the highlights of the second part was the chapter by John Kay, which uses video games as an analogy for economic models, then notes that:

...it obviously cannot be inferred that policies that work in Grand Theft Auto are appropriate policies for governments and businesses.

Andrew Lo also offered an amusing, but entirely true, quip:

We economists wish to explain 99% of all observable phenomena using three simple laws, like the physicists do, but we have to settle, instead, for ninety-nine laws that explain only 3%, which is terribly frustrating!

I didn't get much out of the second or third parts of the book, to be honest, but this was more than made up for by the final part. I particularly enjoyed the chapters by Michael McMahon and John Sloman. McMahon used an analogy of student learning being like going to the gym, which I am almost certain to use with my students. The more they go to class, or engage in learning activities outside of class, the more 'econ fit' they will get. Lectures and tutorials are like a Zumba or spin class, while office hours are like a session with a personal trainer. There's a lot of potential in that analogy. Sloman's chapter was a great summary of recent developments in pedagogy, especially as applied to economics. I particularly liked the short section on problem-based learning. Interestingly, we had already decided to adopt a lite version of problem-based learning in ECONS101 this year.

Overall, the book was interesting, but I kind of wished I had read it much earlier (it has been sitting on my bookshelf for many years). However, it was good to see some of the things that I do (or will do) in my classes affirmed, and it is clear to see how the textbook The Economy grew out of the discussions at that conference. This is a book that would only be of value to economics teachers, but many of them should read it (and I will be circulating a copy of Sloman's chapter to my colleagues tomorrow!).