THE EVOLUTION OF ECONOMICS TEACHING

Economics teaching is getting an online reboot from Professor Wendy Carlin of University College London, with her CORE project and e-textbooks. These try to engage students with “narratives” (the maths comes later) taken from real-world examples, starting with the economics topic that interests them most. The results of CORE’s student questionnaires shows that inequality looms large, it seems, in almost all of them.

A favourite “narrative” of Professor Carlin’s is the approach to the distribution of prizes taken by pirates, on which we apparently have a lot of historical data, showing this was (is?) a lot more egalitarian than the approach of the merchant navy. A slightly less wacky example explains how mobile phones changed the lives of fishermen off the Indian coast, helping them to direct their catches towards the village where demand was greatest, thus demonstrating the law of one price.

Some major universities have taken note (maybe they are beginning to demonstrate the law of one course). So how has economics teaching changed in Frontier’s lifetime? Sarah Hogg and Gus O’Donnell talk to two of Frontier’s economists, Andrew Leicester and Callum Cheshire, who by coincidence started their careers at the same sixth form college – one in the 1990s, the other in the 2010s.

SH: Andrew, Callum: what made you  choose economics to begin with, way back  at A level? 

AL: There weren’t any “pop econ” books  like Freakonomics around then to pull me in, and  I can’t pretend it was the state of the world around  me! I read the college’s prospectus at high school:  it had a short introduction to all the possible  choices, and I vividly remember that the first  line for this subject was: “Economics is about  matching limited resources to unlimited demand”.  So I thought: well, maybe that sounds interesting.  In 1998 there weren’t many of us taking the A level  – 10 to 15 out of a year group of 200. It was a bit of a  “boys’ subject” – only a couple of girls in the class.  I had been thinking about reading maths at  university, but I enjoyed economics enough  to choose it instead, to read at Cambridge. 

CC: There were twice as many of us  taking economics A level in 2012. It wasn’t that  long after the financial crisis, and we wanted  to know what on earth the banks had been up  to. (What was this thing called a sub-prime  mortgage, anyway?) I’d been thinking of reading  history, but opted for economics at Birmingham  instead. My class was still mostly boys; the girls  tended to choose psychology. 

SH: Maybe they were smart enough to  know that the psychologists were getting ready  to mount a takeover – that behavioural economics  was going to be the big new thing. Ah well, at  least there’s a behavioural strand to A level  economics nowadays.

AL: But the gender imbalance doesn’t  seem to have changed much. I checked: for  economics A level entries nationwide in 2017-18,  the male-to-female ratio was more than two to  one. Mind you, the girls did better: 34.1% got A  or A* compared with only 29.4% of boys.

SH: What was the A level course like  in your time? 

AL: Macro and microeconomics were  treated quite distinctly. We did a bit of political  economy – a whistle-stop tour in macro of  how political thinking evolved from Keynesian  demand management through to monetarism,  for example. And one part of the final exam was  based on real-world case-study applications,  but otherwise I got a thorough grounding in  some standard theory – demand and supply,  equilibrium, profit maximisation, demand  elasticities – which was a good preparation  for university. 

CC: With more of us on the course,  it was a bit broader, and teachers made quite  a good effort to relate theory to the real world,  teaching us about “natural monopoly” from  life, for example. Everything was still based  on the assumption that people behave  “rationally”, however. 

SH: So what were you taught  as undergraduates? What were the “hot button”  topics? And who were the superstars? 

AL: First year, the basics, plus more  economic history and political economy. It was  interesting to see how theories we were being  taught could be applied to data pieced together  from the industrial revolution, for example.  After that you could basically go “hard” – into  econometrics – or “soft” – into public economics:  development, labour markets, etc. Plenty of  industrial economics, but no behavioural stuff  yet. Of course we all did some mathematical  economics – Jim Mirrlees was still lecturing  at the time, on optimal tax theory, and  Nobel prize winners have a pull! But we  were also attracted by the new policy areas,  like environmental economics, studying  “externalities” and looking at carbon  pricing models. So that wasn’t wasted! 

CC: The basics for us in the first year,  too, then wider options. The economics of the  EU was a favourite topic in 2012! Lots of financial  economics, following the crash. And public  policy – how were governments responding –  public austerity, quantitative easing? Mervyn  King was still lecturing at Birmingham when  I was there, followed by Peter Sinclair, and they  were both crowd-pullers. 

SH: What about your fellow students? 

AL: There were two groups: the wannabe  investment bankers, who did lots of quant and  fought for the best internships – and the rest  of us. Overall the diversity was a bit better than  at A level but still a long way from gender parity  and economics still isn’t there. I did some more  data-mining, and it seems that even today,  men studying economics at university  outnumber women two to one. 

SH: Mind you, it’s all better than in the  1960s, when only three Cambridge colleges even  admitted women – and only five in my time at  Oxford. But then you have to remember that  Cambridge didn’t actually award full degrees  to women until the late 1940s. 

GO’D: And this gender disparity was  very evident among the teaching staff. My first  job was lecturing in the Department of Political  Economy at Glasgow University and the staff  were predominately male. The few women on the  staff were truly exceptional. (I remember Diane  Dawson, who was snapped up by Cambridge,  and Mary Gregory, who went to Oxford.) 

CC: Quite a few of my contemporaries  were still heading for investment banking,  even after the crash – or the Big Four accountancy  firms. But behavioural economics had become a  popular option, and students were thinking more  widely. Even so, I didn’t really begin to focus on  tools I use today until my master’s degree. 

AL: Me neither. I hadn’t done much  rigorous policy evaluation, proper cost–benefit  analysis, till I studied for my master’s. It felt like  undergrad teaching wasn’t really guided by how  people might use economic models and tools  later on in their careers. 

SH: So what do you think economics  students are learning now? Trade theory used  to be a big Cambridge subject – is everybody  going to start focusing on it again, now the  world trading system’s under threat?

AL: There’s so much that is changing;  partly because markets are changing so fast,  partly because behavioural science and the  ability to manage and mine large datasets  is making so many more issues tractable to  economics techniques. And also because policy  aims are changing, with more focus on the  environment and well-being, less on income  and output. You should talk to Gus about that… 

GO’D: I have given many seminars and  lectures on well-being and behaviour change  and their implications for public policy at  universities around the UK and more widely.  I get a lot of interest from students and lecturers  from a number of disciplines. Actually the group  least likely to attend are economics lecturers,  which says a lot about the distance we still have  to travel to get academic economists sufficiently  interested in public policy. 

Many thanks to our guest writer, Sarah Hogg (Former Frontier Chairman)