Sunday, June 28, 2020

Teaching economics for a better world

(This is the English version of my article in Spanish published in Alternativas Económicas)
After the 2008 crisis and mobilizations such as those of the “Occupy Wall Street” or “Indignados” movement, or those of Chilean students, many voices around the world called for a rethinking of the teaching methods of economics at the university. The traditional ones had not been useful to understand the crisis.
The CORE Project ( is an empathic response to these voices, without giving up reasonably high standards of quality and rigour. The project consists of making a series of high-quality materials available to teachers and first-year students free of charge, which update the teaching of the introduction to economics, both for those studying a degree in economics and for those studying other degrees (but having to learn economics at the introductory level). These materials range from a free e-book to data for conducting empirical guided projects, videos, exercises, or experiments.
CORE's objectives include: to build a global community of people interested in innovating pedagogical methods for teaching economics; to develop an interactive methodology aimed at solving social problems; to bring contemporary developments in economic research into the classroom from the beginning; and to provide everyone with the tools to understand the great economic issues of the world around us, emphasizing issues such as inequalities or climate change. The on-line nature of the materials makes it easy to adapt quickly to current issues. In this sense, it was only weeks after the start of the coronavirus crisis that CORE made available to its users a series of educational materials on the pandemic and its economic implications. The fact that the material is freely available online facilitates distance learning when necessary, and also facilitates modern learning methodologies.
The project has been led by a wide group of economics scholars from different parts of the world, concerned about the need to renew methods and content in teaching economics. The leadership work carried out by Samuel Bowles, professor at the Santa Fe Institute in New Mexico, and Wendy Carlin, professor at the University of Oxford, stand out within the group. Among the Spanish economists involved, the participation of Humberto Llavador from the Pompeu Fabra University, and Antonio Cabrales, until now at the University College of London (UCL), and soon at the Carlos III University, stands out. CORE materials are already being used in various universities around the world, such as UCL in England or the Toulouse School of Economics in France.
The CORE e-book is being translated into Spanish, and 8 chapters of the translated version of the 22 of the complete e-book are now available. The translation will be fully available for the next academic year 2020-21. At the Universitat Autònoma de Barcelona (UAB) we are gradually introducing it in the teaching of economics for non-economists.
One of the characteristics of the selection of content in CORE is its inter-disciplinary nature. At the UAB we will use it as the main material in Introduction to Economics of the new degree of History, Politics and Economics that will begin in 2021-22. It is accepted naturally and as a positive thing that the economy must dialogue humbly with other branches of knowledge, such as history, political science, psychology, natural sciences or computer science.
The organization of the contents in CORE contains significant differences with the traditional textbook of introductory economics. Specifically, issues of income and wealth inequalities are addressed from the beginning, and the traditional separation between microeconomics and macroeconomics is blurred. The market as a resource allocation mechanism is approached as an institution along with other possible ones that act on the really existing social interactions. The typical supply and demand graph does not appear until well into the e-book, once students have been introduced to Game Theory as a toolbox to analyze social interactions in general, which allow us to address real questions such as negotiations on climate change, the provision of public goods such as peace and security, or the existence (or not) of potential conflicts between efficiency and equity.
The market is a powerful institution based on individual interests that has advantages and disadvantages (these are especially visible when there are external effects such as climate change, or when free agreements leave uncovered contingencies and give rise to power relations). Another important institution is the State, with its coercive power ideally legitimized by democracy, and it also has advantages and disadvantages. There is a third block of resource allocation mechanisms, traditionally left aside by traditional economics, which are communities, that is, organized human groups without the need for external coercive power, which are based on social norms as the foundation of cooperation. This set of mechanisms also has advantages and disadvantages: it allows the development of collective projects without the need for a coercive apparatus, but part of the cooperation can be translated into intra-group cooperation to go aggressively against another group. The CORE project itself, constituted as a non-profit organization financed mainly by foundations, is an example of the work carried out by a community of altruistic professionals interested in renewing the teaching of economics. The great challenges of the present and the future of human societies will require combining the best of markets, state and communities, trying to mitigate their disadvantages.
This is not the only attempt to renew the teaching methods of economics. The freely available video courses of Raj Chetty based on his classes at Harvard, where he progressively introduces the most modern methods of economics and econometrics with real empirical work, or the mobile phone experiment platform that Humberto Llavador and a group of collaborators have launched, are complementary efforts.
All of this is extremely useful for students and teachers. And it is also useful for journalists and policy makers, and for anyone who wants to better understand the economic reality (the economy) and the branch of knowledge that tries to approach it (economics). Not to disseminate slogans, but to better understand the complex social reality in which their activity and life take place.

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