What's the Use of Economics? Teaching the Dismal Science after the Crisis

4.6/5 ( ratings)

On the fourth anniversary of the collapse of Lehman Brothers, how could economics possibly have emerged from the financial crisis unreformed?

With the crisis still continuing, many economists, as well as people outside the profession, are questioning why economics failed to either send an early warning signal or resolve the situation quickly. The gap between important real-word problems and the mathematical model-based economics being taught to students has become a chasm. Students continue to be taught as if not much has changed since the crisis, as there is no consensus about how to change the curriculum. Meanwhile, employer discontent with the knowledge and skills of their graduate economist recruits has been growing.

This book examines what economists need to bring to their jobs, and the way in which economics education in universities could be improved. It is based on an international conference in February 2012, sponsored by the UK Government Economic Service and the Bank of England, which brought employers and academics together. Three themes emerged: the narrow range of skills and knowledge demonstrated by graduates; the need for reform of the content of the courses they are taught; and the barriers to curriculum reform. While some issues remain open, particularly with regard to the teaching of macroeconomics, there was strong agreement on such key issues as the strengthening of economic history, the teaching of inductive as well as deductive reasoning, critical evaluation and communication skills; and a better alignment of lecturers’ incentives with the needs of their students.

In the final chapter of the book, Alison Wride concludes the discussion with a fundamentally important point. There has been a substantial increase in the number of economics students at university, and unprecedented interest in the subject thanks to the crisis. She writes: ‘We will lose all credibility if we come out of the crisis without learning from it and changing what we do.’ Students expect to be employable but they are still being taught courses based narrowly on technical models, giving them skills that employers say are inadequate.