Recently in College Teaching Category

Beloit College's annual "Mindset List" is out, just in time for the start of classes. As I pointed out last year, they are recycling old material. So far, at least three (I quit counting) of the eleven installments make reference to Johnny Carson (or Ed McMahon). Looks like one of the list creators was a real Tonight Show fan. There are always some Cold War references too.

Over the years, the list has become rather formulaic: _____________ (person, place, or thing) have/has always/never _______________ (something that it wasn't/was prior to the year they were born).

Example from this year's list:

Wayne Newton has never had a mustache.

I'm not sure all of them know who Wayne Newton is. I'll find out next week and report back.

In addition to that formula, there are also the obligatory references to movies and television shows that came out the year they were born.

This year's list is of some interest to me as I graduated from high school and started college in 1990, the year that many of this year's freshmen were born. The Beloit list mentions that for this year's freshmen, Stevie Ray Vaughn has always been dead. Indeed. He died in a helicopter crash on August 27, 1990. This was the subject of some sorrowful discussion among us 18-year-olds during my own freshman orientation.

While the list does invoke nostalgia, the focus on the year of birth for this year's freshman is too limiting (and was not the way the list began). As we begin classes, it is useful to think about changes in pop culture and the differences between the way the generations see the world. It will be a few years before Beloit's list references 9/11, but this year's freshman class was entering 6th grade in 2001. They were 11 years old. They have very little (if any) meaningful memory of the way the world was geopolitically before 9/11.

Only 8 more years until they can tell the incoming freshmen that Beloit College has always been publishing the Mindset List.

Of course I have tried to accomplish some things on my summer break as well. In addition to doing a little research, I sat down and knocked out another Mathematica demonstration. You can download it from the Wolfram demonstrations website.

This one was actually pretty easy to do. It's a neat way of looking at how the coefficients of the cubic total cost function affect the average and marginal cost curves. If you use it in class, let me know!

This all started with my post on how a computer demonstration allowed me to illustrate a certain technical feature of the Solow model that would otherwise require a lot more setup time. The (unstated) implication being that it allowed me to get to the "good stuff" sooner.

That's a little ironic because both John Palmer and Gavin Kennedy clearly want to focus on the other important institutional aspects of growth. Kennedy wants more attention to a careful and correct reading of Adam Smith (I can't disagree with that), and Palmer wants to focus on reducing transaction costs a la Coase. No doubt that others could come up with entirely reasonable things to add to that list, and no doubt many of those additions are things that, given enough time in the semester, would be beneficial to cover in class.

Yet I think that both John and Gavin overstate the objection to the Solow model (and presumably other models) as just a mathematical exercise--math for math's sake. As John puts it, "Yes the models are a great seive for filtering the students and putting them through the hoops." But in his later post he writes:

Second, the basics of economic growth are extremely important: consumption uses scarce resources that cannot then be available for producing capital goods; saving allows investment, which means more will be available for consumption in the future. We all (I hope) teach something like this in our intro courses when we show that saving today shifts the production possibilities frontier outward for the future.

We agree! And there's probably no better way to quickly and coherently communicate this than a simple undergraduate treatment of the Solow model. You have the most simple dynamics possible. You can talk about investment and depreciation. You can talk about stocks and flows. You can talk about capital seeking a high rate of return. You can talk about the tradeoff inherent in the consumption/saving decision. It's all there in a convenient package that can be covered in one class period.

And really, the Solow model as typically presented at the undergraduate level is not much of a math problem. It reduces to a couple lines of algebra. One does not have to do the full-blown differential equations version.

Perhaps this would be a good time to lay out the way that I approach growth in an intermediate macro course. It is based on the presentation in Steve Williamson's text, but I add my own twist.

1. Overview of growth experiences across the world. Evolution of average world GDP since the industrial revolution. Demonstration of gapminder.org website. Parente and Prescott stylized facts.
2. Malthusian pre-industrial revolution scenario. No growth. Mercantilism.
3. Industrial revolution. Economies begin to accumulate physical capital in a serious way. Solow model is introduced. Growth accounting. Solow model can explain how high marginal product of capital attracts investment. Solow model can't explain why countries take off or why sustained growth occurs. Convergence happens among wealthy countries with similar institutions but no worldwide convergence. Finish with Alwyn Young analysis of TFP in Asia before the financial crisis, which leads directly to...
4. Modern growth. Robert Lucas and Paul Romer style models (sketch... little math). "It's not factor accumulation, it's 'A'" a la Easterly and Levine. Endogenous TFP. Discussion (institutional issues are raised).

It's not particularly math heavy, though there are some opportunities for the motivated student to show off a little. If anyone had the impression that I dwell on the Solow model, I'll clear that up now. But it is a very important part of the context of the whole discussion (not to mention the only way I know to introduce growth accounting). Plus, while the Parente and Prescott approach is not exactly the Solow model, it is of that lineage.

There are so many interesting things to talk about when the time of the semester comes around to discuss growth theories. The simple algebra of an undergraduate version of the Solow model is one of the boring parts, but it is, I believe, necessary. Not as a filtering device (it is a rather coarse filter), but as a way of showing the "measure of our ignorance" (as the Solow residual is sometimes renamed) before moving on to (attempt to) lift the veil of that ignorance.

So anyway, I think we should have more and better presentation tools for streamlining the presentation of the Solow model to make the mechanics clearer and to better allow us to communicate how it revolutionized thinking about growth and how it ultimately showed us that there is so much we don't know without getting our students bogged down in the technical details.

That's what started this whole discussion anyway.

See also: Mike Moffatt (whose comments on the Coase theorem I will take up at a later time), Gabriel Mihalache (who agrees with me while maybe overdoing the case for analytical precision--at least if we're mainly talking about undergraduate pedagogy--but that is to be expected of a soon to be first year Ph.D. student [been there, done that]), and YouNotSneaky (who agrees with me for essentially the right reasons).

John Palmer asks this question in response to yesterday's post.

My response was:

Same reason we teach the Ricardian model of comparative advantage.

Even though it oversimplifies reality to nearly the point of absurdity, it contains many useful insights that are vital to understanding more sophisticated models and policy discussions.

It introduces a way of organizing one's thinking about the topic at hand. (Growth accounting, in Solow's case... a very important concept.)

It is a touchstone in the literature for an entire field. One cannot be considered to be educated in that field without an understanding of it.

It can be augmented and extended fairly easily to obtain more interesting and potentially useful results.

Despite all that, we know that it is a bit too simple to be the only tool in our arsenal. Indeed, to use it as the only tool in our arsenal would be dangerous.

Would not each of these statement apply to the Ricardian model as well as the Solow model? (Readers are invited to suggest others.)

John responds:

Recently a colleague asked me if I teach anything about growth in my intro course. I replied that I teach nothing explicit about growth theories, but I do teach the Coase theorem and the importance of property rights and transaction costs in understanding exchange and growth.

In contrast, Ricardian comparative advantage lies at the heart of exchange; some would argue it is the only argument we have in favour of free trade. It is indeed based on heroic assumptions, but in many instances these assumptions do not detract from the usefulness of the concept. And at least comparative advantage depends on such basic concepts as opportunity costs and relative prices.

I wholeheartedly agree with the emphasis on the Coase theorem--which may be one of the most important ideas in economics. And yes, the Ricardian model is where we show off our propensity to make opportunity cost and relative prices the cornerstone of the entire edifice of our theory. The Solow model does not give opportunity cost and relative prices the same central role. Indeed, they play almost no role (unless you count the rental rate being the marginal product of capital, but one could overlook that if one is not careful).

But the successors of the Solow model do give prices that role. And so again I go back to my assertion that Solow's model provides the basic framework for thinking about the problem of growth accounting, for taking a measure of our ignorance, and for laying the foundation for half-a-century of research. Not a bad record.

And let's be honest. Any model that can get our attention and cause us to take stock of the measure of our ignorance about a problem as deadly serious as economic growth and development is very much worth teaching.

Gabriel M. also comments.

Via Newmark's Door comes this from the Richmond Fed "Why I Want To Be An Economist". Read it. Many of us have had students who would tell similar stories.

Ruminating on this post by Gabriel Mihalache reminded me of this. It's Preston McAfee's introductory econ text. Since I'm teaching MBA microeconomics this summer, I need to make a note to put this on the list of suggested supplements.

Gabriel has noted some other free books and notes out there as well. The variety of what's out there for economics is truly amazing. McAfee's text is fine for a principles course at Cal Tech but probably too advanced for principles courses at most places. However, one could put it on the reading list as an optional supplement for more advanced courses, as I intend to do.

Students occasionally ask what economics book they should read for pleasure. If you're an econ professor, you know what I mean. Greg Mankiw tells us of a recent conversation he had...

Student: Professor Mankiw, if you could recommend just one book, what book would it be?

[Mankiw]: Am I allowed to recommend my favorite textbook?

Student: No. Textbooks are disallowed.

[Mankiw]: In that case, I'll suggest Milton Friedman's Capitalism and Freedom.

Student: That's funny. That's the same answer I got when I asked this question of Professor Summers.

Capitalism and Freedom is a book that I have recommended as well. As I described previously on this blog, that book was and still is a favorite of mine.

By the time I read Capitalism and Freedom, I had already made up my mind to go to grad school and be an academic economist. So it was not a life changing event in that sense. However, by the time I put the book down I knew that I had made the right choice for me. I remember that one of my thoughts after reading it for the first time* was, "Wow, that's how to make an economic argument." Maybe that's why economists across the spectrum from Mankiw to Summers and undoubtedly many more in-between recommend the book to students.

*It is indeed a shame that I will never again read it for the first time and capture that exact feeling again. I am reminded of an episode of "Classic Albums" on VH1Classic in which one of the members of Pink Floyd (probably David Gilmour, but I don't recall for sure) waxed philosophical about what it must have been like for someone to bring home Dark Side of the Moon, turn out the lights, put on the headphones, and listen to it for the first time--and that since he was so involved with brining it into being he never had that experience for himself. I can't help but wonder if Milton Friedman had a similar experience with Capitalism and Freedom.

This blog will proudly wear the colors of Northern Illinois University until Monday evening. Western Illinois University is also paying tribute on their web site with NIU colors. A vigil will be held at 3pm on Monday in the University Union.

Another shooting on a college campus--this one closer to home. Northern Illinois University is just three hours up the road. There are probably more than a few students from the Macomb area studying up there, and many students studying at WIU have friends at NIU. It is a somber night down here as I'm sure some of my own students are waiting for word from their friends in DeKalb. However, we are comforted to hear that a fellow economist blogger, Stephen Karlson (Cold Spring Shops), is ok.

The Northern Star has wall-to-wall coverage.

UPDATE: The Chicago Tribune has much more.

The college had a bulletin board contest for the various student organizations. The Economic Student Association took 3rd place (the cash prize will help pay for our trip to St. Louis we're planning). The Finance Club took 1st, but I really shouldn't complain since one of the items on their bulletin board was a sign advertising my talk to their club earlier this week.

Also this week, I heard from a former WIU student now studying for her Ph.D. in economics that she has passed both her comprehensive exams...with a "high pass" in macro. Since I taught both her macro classes in our M.A. program, I am delighted to hear that news. She did both her B.A. and M.A. at WIU.

Another former student of mine recently returned from a semester at Oxford. Still another student is in the running for a very prestigious award. Hopefully he'll find out about that soon.

Not to mention that I have some really bright students this semester as well. Could be one of my best groups yet (compared to any place I've been). We've got some really good econ majors, and some good finance majors getting a minor in econ (a very good and increasingly popular combination here).

Yes, I've been quiet the last few days. It has been final exam week, and on Wednesday it almost required a shovel to get down to the desktop. Things are better now, and I hope to be rejuvenated after the weekend. In the morning, I will be at the Commencement ceremony. As I often do, I will be leading the graduate students (MA Econ) across the stage and handing each of them their diploma cover as we smile for the camera (the actual diploma will be in the mail after grades are in).

Then, after the ceremony, we're going to St. Louis to see Wicked (for the 2nd time).

Have a good weekend!

I figure I've logged about 1600 miles of driving in the last 11 days. That cuts into the time available for blogging. Things should improve now for a while at least.

Yesterday, I was in Chicago with my students competing in the 7th District College Fed Challenge. Three time defending national champion Northwestern University won again. Although the University of Chicago certainly gave them a run for their money. We faced U of C in the first round and thus didn't advance. Even so, the value of the program as a learning experience for our students is tremendous.

Fredric Mishkin spoke yesterday about the risk management approach to monetary policy decisions. This was the basis for the lead off question in the final round Q and A session at the Fed Challenge. By the way, all of the final round teams (in addition to our team), were unanimously in favor of holding rates constant at this point in time. The competition is real-time. Therefore having it so soon after the last meeting does sort of predispose one to holding steady. However, there was a lot of discussion and debate by all the teams about what the outlook is going forward.

As for that outlook, Tim Duy is concerned.

...One has to imagine that the Fed must be feeling a little uneasy about pulling the trigger on another 25bp last Wednesday given Friday’s employment report. Still, they likely take comfort in the belief that they drew a line in the sand with the statement, declaring a balanced risk outlook.

But can they stick to that line during a scary four months? Can they look through to that period of “moderate growth” that they keep predicting? I would like to believe they are ready to stick to their guns, but recent history is not on my side.

...

Can the Fed resist that pressure to keep cutting even if they are confident that the medium term risks are really balanced? If the “risk management” faction at the Fed continues to hold power, it seems like more rates cuts are likely, especially if there is any hint of further softening in employment or investment. That is what recent history tells us.

Standing in the way of additional cuts, however, is these new-found inflation concerns that appeared in the last statement. Declining core-inflation has been cited as a justification for Fed easing based upon decreasing estimates of the neutral Fed funds rate. I would only like to suggest that the recent history of core-PCE is not all that comforting. Looking a three-month inflation trends on an annualized basis:

I detect something of an upward trend in the past four months, on the order of 50bp – perhaps it is too early to be lowering estimates of the neutral rate? Personally, I wouldn’t break out the champagne on the inflation story just yet. It appears, however, that Fed Chairman Ben Bernanke and Governor Frederick Mishkin – the power couple in the “risk management” regime – already popped the cork.

The chart is from Duy's post at Economist's View.

This is precisely a point that was made by my students as well as most of the other teams at the Fed Challenge yesterday. This is a concern going forward. There is a very real risk that any further easing could have nasty repercussions for intermediate to long term inflation expectations. And if the Fed is going to be facing a real inflation problem in a year or two, when the economy is still trying to right itself from the subprime debacle, that's not going to be good for growth either.

See also this article by Bloomberg's John Berry.

The Road to the White House, a multi-day mock presidential election event is off to a tremendous start here at WIU. Tonight, students played the roles of primary and caucus voters from a selection of states. Other students played the roles of campaign workers trying to sway the voters. Broadcast students used it as a real-world training exercise and broadcast the proceedings on the college cable channel. Print journalism students were seen scribbling on notepads and taking photos. Our state senator was in attendance. Faculty supervised the ballot process, answered questions, and kept the process moving forward.

Students were given a taste of what it is like to vote in a primary or take part in a caucus. Having participated in the Iowa caucus once back in the day, I volunteered to coordinate a couple of the caucuses. What a rush! (That is not a phrase that I use often, and probably never have used on the blog to this point.) Before we started, the look on some students faces was one of apprehension and confusion. Many, if not most, have not participated in any "real" politics. Maybe some have voted in a state election, but not many in this bunch would have voted in 2004. Given that we are in a primary state, I doubt that many have caucused (though we do have many students from Iowa--some of whom I learned from conversations are planning to caucus in '08).

At the end of the session, I noticed a visible change in the facial expressions of those students. It was no longer apprehension and confusion, but a look of satisfaction. A look that said that this wasn't so bad after all, and maybe it was even interesting.

The best part of it is that this mock election event is spread out over a couple of weeks. The energy will continue to build. Many of the students are signed up to participate each night, giving it some real potential for creating a lasting impression.

Here's the main website for Road to the White House. You can read more about the events here and here.

The results of tonights polling of the students? On the Republican side, they like Giuliani. Romney was close behind, and Ron Paul was surprisingly strong. On the Democratic side, Obama was the clear favorite. Now of course, we are in Illinois, and there is obviously some home bias. It wasn't even close. This may be one area where the simulation is not quite in sync with reality. Obama clearly has the hearts of these students even as he has lost ground to Clinton in the larger population. Can he come back? I just saw a ballroom full of students who hope so. Whatever your political affiliation, it was quite a sight to see on our campus tonight.

Dani Rodrik notes Greg Mankiw's recent post announcing the end of comments on his blog and wonders, "Is the econ-blogosphere sustainable?"

At this rate, in any case?

Two things happened in the last twenty-four hours which made me wonder if some of the best economics blogs may be on their way out. First, an economist with a very high-quality blog told me that he was not sure if he had made the right decision by starting it. He said he worried about coming up with new content on a daily basis, and that he may run out of energy at some point. Then, Greg Mankiw declares that he is too busy to be reading and filtering all the comments he gets on his site and turns off the comments section. In a long post, he says the whole blog thing is taking too much of his time, and intimates that he may not be doing this for ever.

So if economists with high opportunity costs of time start to get out, shall we have a lemons problem on our hands? Will eventually the only prolific bloggers remain the ones that are not worth reading?

It is ironic that this post comes in a rather slow period in my own blogging. My excuse? Working on getting a conference paper out. Not to mention the fact that conferences aside, as late October rolls around a lot of us in the academic community find ourselves in a pretty busy time. It's what I call the rhythm of the semester. In my case, a lot more is hitting right now than would be usual even for late October. Opportunity cost, baby!

But to call this a "lemons" problem is to imply that there is some information asymmetry in the market. In other words, when there are a lot of blogs out there, it is harder for people to tell which ones are the "good" ones and which ones are the lemons. Unable to command a price to cover their opportunity cost, the "good" bloggers exit and you're left with lemons.

Nah.

Finding a good blog is a lot easier than finding a good used car, and the commitment factor is a lot less of an issue. If you buy a lemon used car you're stuck. If you find you're reading a sub-par blog, you can move on. Information is passed in the form of links that tie us all together. Yes, there can be a bit of an echo chamber in some corners, but particularly in the economics wing of the blogosphere there is also a lot of cross-traffic between writers of different ideological persuasions. I mean, I comment at Angry Bear once in a while. They haven't kicked me out yet. My comments and their responses there and here build a stock of information about our blogs that makes it way around the network of readers. That helps people make decisions about who to read. So while I wouldn't say that the econ-blogosphere is a picture of a perfect market of ideas, it's got a lot of things going for it. I don't think the lemons issue is much of a problem.

I have a feeling that the stable long run equilibrium will have some of the better blogs that feature mostly economics and less of the daily political bloodsport will post better items less frequently. Also, blogs by academics will be subject to bursts of activity and periods of relative quiet. Readers who become familiar with that rhythm will accept it the same way that TV viewers are accustomed to sweeps week and summer reruns.

In other words, the death of the econ-blogosphere has been greatly exaggerated. It seems much more likely to me that the medium is simply entering another stage in its development.

I intended to post last night, but lack of sleep got the better of me. Anyway, the reason that I was away from the computer yesterday is that two other economics faculty and I took a group of econ majors, graduate students, and other interested folks up to the Chicago Board of Trade yesterday to watch what happened on the floor when the Fed announcement came out. Astute readers will recall this post from a few weeks ago:

Note to self: WIU economics faculty and students usually make a trip up to Chicago to see the Board of Trade every year. I am one of the faculty who works on scheduling and arranging the trip. I must do what I can to see if we can get up there on an FOMC day this fall.

The blog is great for keeping some of those notes to self in writing so they can be remembered and acted upon.

Let me also say that I am very happy to be part of a department that places such value on these kinds of experiences for students.

Last spring we saw the Board of Trade on a day where there was considerable activity in the grain markets, but the financial markets were absolutely dead. There were just a few people milling around checking the computer screens, reading the newspaper, and so forth.

Contrast that with yesterday. In the gallery there was a map showing what instruments are traded in each pit. It appeared that the most activity was in the bond futures and options, particularly the 10 year, but a bit of activity in the 2 and 5 year as well. There were some people in what the map showed was the fed funds pit, but the activity was not frantic. My guess is that a lot of that activity is electronic. There was some activity in the Dow futures, more on that later.

We got up to the gallery shortly before 1:15 as traders were quietly waiting for the announcement. I was looking at the bond options area when I heard a noticeable rise in volume from the floor. That's when I turned to the big CNBC monitor in the corner and saw that the announcement had come out and that it was 50 basis points. Within seconds, the pace of activity had increased from relative calm to a rather brisk pace. Yet it was controlled rather than frantic. I would guess that every trader on that floor had a game plan for this possibility that they had thought out ahead of time. They were executing that game plan rather than simply reacting. Had the decision been for 25 basis points, the game plan would have been different, but it would have been similarly executed.

Casual observation: There was some media coverage on the floor. I could see the cameras but from my vantage point I could not see the reporters. It looked like CNBC cut to their camera on the floor a couple times while we were there, and when it did the volume level on the floor seemed to rise. (Playing to the camera?)

Prices of various instruments were posting up to the big digital boards on the wall. Green numbers under the 2 year note futures, red numbers for the 10 year futures reflecting the movements taking place on Wall Street as the short term prices rose (yields fell) and the news was mildly negative for the longer term bonds. As someone who takes an interest in this and teaches it, I have to say that it was quite a sight to see those the hand signals in the pit and look up and see the numbers on the board go red and green as the traders digested the information.

Another way that the trading in Chicago mirrored that on Wall Street was in the Dow futures. Again, we could see on the digital price board that the DJIA was heading upward while all of this was going on. It was up about 170 points at the point when I started to notice what was going on with the futures. Every few minutes there was a little outburst of activity in the futures. As the Dow climbed, the futures kept pace. The September contract expires on Friday, and of course other months prices rose in lock step (this is where you can illustrate the law of iterated expectations).

All told, it was a great day for the students to see economics and finance in action. Before the announcement, we even got to go down to the trading floor briefly as a guest of a trader who knew one of our students. Also that morning, before going to the CBOT, we visited a consulting firm. That gave our students a chance to see more about how economics is used in the "real world". Now I'm working on a handout and presentation as a "debriefing" for the students to reinforce what they learned. I think the title of the presentation will be "What happened while you were watching and why?".

We also got to meet up with a student of ours who just finished an internship in Chicago and leaves next week for a study abroad term at Oxford. Did I tell you that our students can compete with the best?

Later, some thoughts on the rate decision itself.

Brad DeLong is teaching American economic history. I'm scheduled to teach it next year, and I feel his pain when he says that his eyes are bigger than his stomach.

The canonical course on American economic history spends:

* one week on the Spanish conquest

* one week on Amerindians

* one week on colonial settlement

* one week on the American Revolution

* one week on Alexander Hamilton

* one week on agriculture in the Old Northwest

* one week on New England manufactures

* one week on slavery

* one week on the Civil War

* one week on the Gilded Age

* one week on Populism

* one week on Progressivism

* one week on immigration

* one week on the Roaring Twenties

* one week on the Great Crash and the Great Depression

* one week on the New Deal

And we have overshot the end of the semester by three weeks.

He goes on to say that he wants to make room for post WWII history by getting to 1865 by the fourth week. Wow. I think you could buy a little time by spending just one day rather than a full week on the pre-colonial period and on Hamilton. Due to my location, I would switch out agriculture in the Old Northwest for agriculture in the Midwest, put it later in the semester (together with the railroads). Make Populism and Progressivism a day each instead of a week each. Similarly for immigration and the 1920s--make them a day instead of a week.

But even at that, you've only crammed that syllabus into the proper length of the semester. You haven't made room for post WWII.

This is going to require some serious contemplation.

Here we go again. The Mindset List is out. It looks like the are recycling some old material. From this year's list for students born in 1989:

61. They never saw Johnny Carson live on television.

And from the very first one back in 1998, for students born in 1980:

28. "The Tonight Show" has always been with Jay Leno.

Carson was on "The Tonight Show" until 1992. So it's not even correct to say that the students entering college today were not yet born when Jay Leno came on board. Save that one for three years from now. Yes, the last decade worth of students were really young when Carson retired. We get it.

Not sure about this one either...

32. They grew up in Wayne’s World.

Only if their parents let them watch SNL before kindergarten. Mike Myers had moved on to Austin Powers fame before the time today's incoming freshmen hit junior high.

There are, as always, some good ones, but I think it's getting harder to come up with a new list every year. Check out the list and judge for yourself. I'll be sure to run it by my students today.

UPDATE: I did run it by my students. My line about Mike Myers/Austin Powers elicited a few smiles. They were familiar with Wayne's World from reruns. Of course, I'm familiar with The Brady Bunch (which was canceled when I was two years old), but it wasn't a touchstone for me. Family Ties, on the other hand....

But I digress. The real purpose of this update is to link in this MSNBC article with a quote from a Beloit student. The setup is that the Berlin Wall came down the same year that most of today's freshmen were born.

“I actually visited the Berlin Wall with my parents when I was in fifth grade,” said Jacob Williams, 18, of Louisville Ky., who is going through freshmen orientation at Beloit this week. “I didn’t know a lot about the history, but I think it was a great piece of architecture.”

Yes, it appears that Mr. Williams is identifying the Brandenburg Gate with the Berlin Wall. The Brandenburg Gate is, of course, a magnificent piece of architecture which was completed in 1791. It was incorporated into the Berlin Wall, and in fact, in photos from the time you can see that the Berlin Wall actually obscured the Brandenburg Gate as seen from the West. The fact that Mr. Williams could visit the site as a fifth grader and appreciate its architectural beauty is due to the fact that the wall itself is gone.

The Berlin Wall itself was not a great piece of architecture, as we have freeway sound barriers in this country that look nicer. Sure, there was some stunning graffiti on the wall, but it could only be appreciated from one side.

The Brandenburg Gate is today a symbol of the reunified Germany. If Mr. Williams is under the impression that the Brandenburg Gate was built as part of the Berlin Wall (which is what it sounds like), then he indeed doesn't know much about the history.

If he thinks that the Berlin Wall (aside from the Brandenburg Gate) was a great piece of architecture then he doesn't know much about architecture.

Robert Frank brings up a problem he wrote about two years ago and goes on to compare learning economics to learning a foreign language. Here's part of the article. Read the whole thing.

In a recent paper, Paul J. Ferraro and Laura O. Taylor, economists at Georgia State University, suggest a more troubling possibility — that introductory economics instructors may not have mastered some of the basic concepts themselves. When the researchers described an activity and asked a sample of 199 professional economists to identify its opportunity cost, only one in five answered correctly.

The good news is that an approach that has revolutionized the teaching of foreign languages promises similar gains in economics and other disciplines. I took four years of Spanish in high school, only to have difficulty making myself understood when traveling in Spain. In those days, most language courses focused on arcane grammatical details, the functional equivalent of the technical material that often bedevils introductory economics students. Today, the best language programs try to mimic the organic process by which children learn their native language.

My first exposure to the new approach came during my Peace Corps training for teaching math and science in rural Nepal. All the things we learned to say were grammatically correct, but we were never taught any formal grammatical rules. Starting from scratch, we had to be able to teach, in Nepali, just 13 weeks later. Our linguistic skills were fairly basic, but virtually all of us made it.

Of course, it’s not easy taking this approach consistently in an economics textbook. Ben S. Bernanke and I have tried in our own textbook, but given what the marketplace is willing to accept, we have not yet gotten all the way there.

Just as a few simple sentence patterns enable small children to express an amazing variety of thoughts, a few basic principles do much of the lifting in economics. If someone focuses on only these principles and applies them repeatedly in examples drawn from familiar contexts, they can be mastered easily in a single semester.

The form in which ideas are conveyed is important. Perhaps because our species evolved as storytellers, the human brain is innately receptive to information in narrative form. Years ago, I stumbled upon an assignment that plays directly to this strength.

Twice during the semester, I ask students to pose an interesting question based on something they have personally observed or experienced. In no more than 500 words, they must then use basic economic principles to answer it. I call it the “economic naturalist” assignment, in the spirit of field biologists who use Darwinian principles to interpret the traits and behavior of living things.

Here's his column from two years ago and my response. Economic naturalism is harder to do for macro (current conditions excepted), but macro principles could use a fresh approach as well. Something for the "to do" list.

I learned today that one of our alumni is now Deputy Minister of Finance for Economy and Integration in Paraguay. One of my thesis students from this past year is in the Ministry of Finance in Mozambique. He and I are working on a paper together.

Both came here on a Fulbright Fellowship. Over the years, WIU has attracted many Fulbright students from around the world. They add to the intellectual vitality of the department, and it is rewarding to see them do well.

Tonight, WIU held its graduate commencement exercises. I believe we had about eight of our MA students walk across the stage to receive their hoods. At our commencement ceremonies (both grad and undergrad), graduates are seated by major subject area. This is the first place where I have been (as student or faculty) that does this, and I like it. Maybe I just noticed that I like it more because this group of grad students was such a close-knit bunch and such a pleasure to work with. I haven't had that much fun at a commencement ceremony in a long time. Lots of pictures. Lots of handshakes with family members of the grads. Lots of excited talk about jobs and Ph.D. programs.

This is why we do it.

It's just a shame that the ceremony was indoors because the weather was perfect.

The NY Times editorial staff has a slow day...

The State of Washington is looking out for students and their families by passing a law requiring textbook companies to disclose prices and other relevant information when they market books to college professors in the state. Lawmakers hope that professors who learn the costs upfront will opt for reasonably priced textbooks that cash-strapped students can afford.

This law, along with similar measures pending in several other states, is a response to intense lobbying by student groups, who have complained for years about the bankrupting cost of college textbooks. A 2005 study by the Government Accountability Office found that book costs had nearly tripled over some two decades, thanks in part to pricey but marginally useful CD-ROMs and instructional supplements, as well as the constant issuing of lucrative but little changed new editions — publishing’s version of planned obsolescence.

Of course, no student wants to spend more than absolutely necessary on books. We complained about it when I was a student. It is part of the order of things. But it is true that prices of textbooks have gone up faster than the rate of inflation. I paid roughly $50 for a calculus text (new) in 1990. I think my intermediate macro text in 1992 was around $50 (also new). I pile of used books for a history or philosophy course could generally be had for under $50. My campus job paid minimum wage ($3.95 in 1990 as a freshman in Minnesota). Ignoring taxes, a calculus book took me roughly 12.5 hours to work off. Call it 14 hours once taxes are added in.

Today, comparable books are in the $100-$150 range. Currently at the Illinois minimum wage of $6.50, a $150 book will take about 23 hours to pay off. When students arrive on the campus of WIU in the fall, the minimum wage will be $7.50 and they will need to work 3 fewer hours to pay for that book. More than I had to do, but in the cost/benefit calculus of a college education, still small potatoes.

This is especially true when you consider that you generally do get something back when you sell the book at the end of the semester. I think most students get back approximately 1/2 of the used book price. Hence the number of hours of labor needed to pay for a used calculus book after netting out the resale value is almost certainly in the single digits. Over the course of a 15 week semester, it's less than an hour per week. Yes, it adds up, but not exactly "bankrupting".

But a lot of people think that we need a law. Would it help if publishers were required include the student prices in the marketing materials they send to us professors? I doubt it. Most of us know the average cost of textbooks in our field anyway. Is a marginal $5 or $10 difference in the student price going to cause us to choose one book or another? Probably not. More importantly, is a marginal difference in student price something that should cause us to choose one book over another? If I choose a textbook based on the fact that the style of presentation is similar to my own presentation style for that material (such compatibility has benefits for the student), should I feel guilty for making them pay an extra $10? What is the purpose of the law if not to make professors feel guilty? Is this where the attention needs to be focused?

Now would be a good time to hoist a paragraph from the archives. Almost a year ago, the NY Times ran an editorial on the same topic. I speculated on how the availability of free or low cost alternative texts might affect the market. I stand behind my prediction.

I predict that textbook prices will continue to outpace inflation. There are alternatives to the traditional textbooks. Preston McAfee and Roger McCain are two notable examples of freely available on-line texts in economic principles. The change is slow in coming, but it is happening. But there is another side to this development. There will, I think, always be a substantial market for traditional texts. As some professors leave the market for freely available texts, that leaves a more inelastic demand curve facing the publishers. The effect on the revenues of the publishers will necessarily depend on how many customers leave the market and how much they are able to recoup with price increases. But if, as I suspect, those professors most likely to use the free texts are those who are most price sensitive (on their students' behalf), we should see textbook prices continue to rise.

Yesterday, I was at the Chicago Fed helping to judge the high school Fed Challenge. I was impressed with the overall quality of presentations. Hopefully some of them will go on to compete in the college version of the competition.

The overwhelming (unanimous?) consensus of the teams competing was to keep the target for the fed funds rate unchanged. No surprises there.

In the Illinois competition, it appears that the schools were all from the Chicago area. Here's hoping that some downstate schools will get involved. It would be great to see the program grow. The more students are exposed to economics in the high schools, the better.

As a side note, Tim Schilling (who works tirelessly at organizing these competitions all around the 7th District) tells me that for my judging efforts I will receive an official "Fed Challenge T-shirt". When it arrives, you can expect a photo for the blog.

As another side note, after the competition, I had a couple hours in Chicago before catching the train home. I spent that time (and could have spent hours more) at the Art Institute of Chicago. The featured exhibition right now is Cezanne to Picasso: Ambroise Vollard, Patron of the Avant-Garde. Well worth your time and the price of admission.

Of course not.

Is Wikipedia a useful research tool for college students? Absolutely.

Middlebury College's history department sees students relying too much on Wikipedia and decides to nip it in the bud. (NY Times)

When half a dozen students in Neil Waters’s Japanese history class at Middlebury College asserted on exams that the Jesuits supported the Shimabara Rebellion in 17th-century Japan, he knew something was wrong. The Jesuits were in “no position to aid a revolution,” he said; the few of them in Japan were in hiding.

He figured out the problem soon enough. The obscure, though incorrect, information was from Wikipedia, the collaborative online encyclopedia, and the students had picked it up cramming for his exam.

Dr. Waters and other professors in the history department had begun noticing about a year ago that students were citing Wikipedia as a source in their papers. When confronted, many would say that their high school teachers had allowed the practice.

Well, encyclopedias have always been a staple of high school libraries. Any manual on writing term papers has a line about how to cite information from an encyclopedia. I always cringe a little at that.

But the errors on the Japanese history test last semester were the last straw. At Dr. Waters’s urging, the Middlebury history department notified its students this month that Wikipedia could not be cited in papers or exams, and that students could not “point to Wikipedia or any similar source that may appear in the future to escape the consequences of errors.”

With the move, Middlebury, in Vermont, jumped into a growing debate within journalism, the law and academia over what respect, if any, to give Wikipedia articles, written by hundreds of volunteers and subject to mistakes and sometimes deliberate falsehoods. Wikipedia itself has restricted the editing of some subjects, mostly because of repeated vandalism or disputes over what should be said.

Although Middlebury’s history department has banned Wikipedia in citations, it has not banned its use. Don Wyatt, the chairman of the department, said a total ban on Wikipedia would have been impractical, not to mention close-minded, because Wikipedia is simply too handy to expect students never to consult it.

Precisely. Consult it. Read it. Find out what people are saying. Learn some interesting facts and pick up some additional sources. Then confirm everything in more reputable sources before you put it in a term paper.

As for using Wikipedia to study for a test and then regurgitating what you read into your blue book, well, that's like skydiving without knowing who packed your parachute. It might work sometimes, but that doesn't make it smart.

At Middlebury, a discussion about the new policy is scheduled on campus on Monday, with speakers poised to defend and criticize using the site in research.

Rather low on my list of priorities for a campus discussion, but hey, whatever floats your boat.

Jimmy Wales, the co-founder of Wikipedia and chairman emeritus of its foundation, said of the Middlebury policy, “I don’t consider it as a negative thing at all.”

He continued: “Basically, they are recommending exactly what we suggested — students shouldn’t be citing encyclopedias. I would hope they wouldn’t be citing Encyclopaedia Britannica, either.

Mr. Wales gets it.

The Wikipedia phenomenon caught my attention some time ago. A few semesters back, I got deluged with Wikipedia citations in term papers. It took me a little by surprise. One semester it wasn't there at all, and the next semester it's everywhere. Henceforth, I have informed my classes that it is not an appropriate source for term papers or essays. It is, as I also tell them, a valuable research tool that can point you in positive directions.

That said, I've picked up a lot of interesting tidbits from browsing Wikipedia. It is useful for looking up obscure things like who the celebrity panelists were on Match Game. Not to mention the fact that the "wiki" concept is great for software support websites--let the users help each other. I'm all for creating open source communities. The Times article describes some positive uses of the wiki concept in higher education. The article also goes on to say,

The discussion raised by the Middlebury policy has been covered by student newspapers at the University of Pennsylvania and Tufts, among others. The Middlebury Campus, the student weekly, included an opinion article last week by Chandler Koglmeier that accused the history department of introducing “the beginnings of censorship.”

Oh, please. Much of what is in Wikipedia is also in reputable sources, so confirm it and cite the reputable sources. In fact, most entries have a reference list. Notable exceptions to this would be erroneous information and blatant opinion which is typically anonymous. Of course in a term paper opinions are fine to cite, but they should be attributable to someone, preferably someone of some authority on the topic. Most professors would look askance at citing an anonymous person off the street as an authoritative source in a paper. That's not censorship. That's teaching students the craft of scholarship.

But then there's this opinion,

Other students call the move unnecessary. Keith Williams, a senior majoring in economics, said students “understand that Wikipedia is not a responsible source, that it hasn’t been thoroughly vetted.” Yet he said, “I personally use it all the time.”

Leave it to an economics major. I'm of a similar mind. The part that Middlebury gets right was at the end of the 4th paragraph,

...students could not “point to Wikipedia or any similar source that may appear in the future to escape the consequences of errors.”

That's the right approach.

Note to students: If you cite Wikipedia in a term paper, you are working without a net. At this stage in your career, you are not qualified to do that. You may also be interested to know that your professors can spot errors, inconsistencies, and shallow reasoning in Wikipedia a lot more easily than you can. You have been warned.

From Wired: The real story behind the iPod.

Exercise for those who teach principles of economics (especially micro): Come up with as many principles level lessons as you can from this. Here's one:

Apple's team knew it could solve most of the problems plagued by the Nomad. Its FireWire connector could quickly transfer songs from the computer to player -- an entire CD in a few seconds; a huge library of MP3s in minutes. And thanks to the rapidly growing cell phone industry, new batteries and displays were constantly coming to market.

Complementary goods in production Lower input cost per unit of quality--Better and cheaper cell phone batteries and displays lowered the cost and increased the quality of Apple's innovation. (UPDATE: Lower input costs would be a more direct answer, but here is what I was thinking. Smaller batteries and displays were complementary with the smaller sized hard drive and other features of the iPod. What good is the small hard drive if everything else is bulky? What good is it to be mobile if the battery doesn't last? The iPod's value came from the combination of innovations. Only when the size and power requirements on all of these complementary inputs are met does the iPod become viable. Substituting a bulkier battery greatly diminishes the value. That is the sense in which I meant them complementary. Not in the literal production process, but innovative, value-creating process.)

You could probably spend a couple weeks in class on the intellectual property rights issues if you were so inclined. You are invited to post iPod teaching suggestions in the comments.

UPDATE: I also like to use the iPod as an example of invention (small hard drive, battery, etc.), innovation (assembling the various inventions into a music player), and diffusion (network externalities with iTunes, marketing, and adoption by the masses).

If you haven't read the previous post and the comments, start there and come back.

Frequent commenter "Lord" writes in:

Schools can teach it but only the students can learn it. Is basic competency all we are talking about though? It barely makes for a globally competitive workforce. At the same time, how many positions do you see for math and science graduates? Not many at all. One takes math and science to pursue a graduate degree in it, or one doesn't take it at all. The demand must change for any serious change in supply.

Is basic competency all we are talking about? Yes and no. You see, I'm not sure that the people surveyed in the poll know enough about math to be able to judge whether they or their kids are getting enough. I'll say it again. To most people, math is arithmetic. And for a lot of jobs, arithmetic is all that is necessary. But even for those jobs where arithmetic or simple algebra (cf. Donald Coffin's comment) is all that is required, people need to be able to carry out calculations and estimations quickly, accurately, and with confidence. Perhaps many of the parents surveyed think that if you can do that, it's enough math. But ask junior high and high school students if they think it's necessary and I know what they'll say. (They'll say the same thing college students say about general education requirements, for the same reasons--and be wrong, for the same reasons.)

Basic competency in math and science is now, and will continue to be, necessary for people who want to be flexible enough to survive in an ever changing job market.

What about going beyond that? The good news is that colleges and universities make an effort (imperfect, yes, but an effort) to ascertain the level of technical skills required in the jobs for which they prepare their students. I was just reading in a professional newsletter that the math department at the University of Iowa had recently reworked their engineering math sequence as a result of meetings with the engineering department. In their case, the changes were driven by accreditation, but this need not always be the driving force. (Note: The link is to the home page of FOCUS, articles seem to be archived to the web with a lag, so the article I refer to is not on that page... yet.)

When we require calculus (and more), we usually have a pretty good idea why. And we do so in the context of a market that demands the services of those graduates. We aren't perfect. There is much that can be done to improve, but overall the market is pretty efficient. Students who take advanced math in college get a good rigorous background in the subject. Some pursue advance degrees, while some work on the applied side of things. Future engineers should take differential equations, those who do will be more employable as engineers. Future lawyers don't need to--it won't affect their ability to find a job as a lawyer much at all.

But future lawyers need to be able to compute percentages just as much as anyone!

To be continued... (in the meantime, keep the conversation going)

From CNN:

WASHINGTON (AP) -- Science and math have zoomed to the top of the nation's education agenda. Yet Amanda Cook, a parent of two school-age girls, can't quite see the urgency.

"In Maine, there aren't many jobs that scream out 'math and science,"' said Cook, who lives in Etna, in the central part of the state. Yes, both topics are important, but "most parents are saying you're better off going to school for something there's a big need for."

Such as?

Nationwide, a new poll shows, many parents are content with the science and math education their children get -- a starkly different view than that held by national leaders.

Fifty-seven percent of parents say "things are fine" with the amount of math and science being taught in their child's public school. High school parents seem particularly content -- 70 percent say their child gets the right amount of science and math.

Of course, the parents probably get their information from the kids.

Students aren't too worried, either, according to the poll released Tuesday by Public Agenda, a public opinion research group that tracks education trends.

Only half of children in grades six to 12 say that understanding sciences and having strong math skills are essential for them to succeed after high school.

Oh dear.

For one thing students in grades 6 through 12 don't know enough math (until maybe grades 11 and 12) to know what they will need to know. Most people think math is arithmetic. Certainly that's what an 8th grader would think. Do I really need to know how to do fractions and percentages to be successful?

Yes, because if you're on the job somewhere and you need to know what 20% of 350 is and you take out a calculator (or worse, say "I don't know"), your boss might think you're not that bright.

Calculus is negotiable. Basic math and science competency is not. Ability to do estimation and mental arithmetic is not negotiable.

There's a lot of stuff beneath the surface of this article that I don't have time to get into tonight. Comments welcome. I'll be happy to come back to this later.

It's a law of nature. Move in day on college campuses must be at least 90 degrees (it was 91 today to be precise). The dewpoint peaked at 79 degrees, which, for those who don't know, is very high humidity. As I recall, it was about like that on my very first move in day as a freshman back in 1990.

Today's freshmen were as old then as my son is now.

Anyway, the rain held off until the evening. Tomorrow is the opening convocation. Time for the professors to get all dressed up and show off our colors and explain to curious freshmen and their parents how to tell what a person's degree was in and where they got it by the colors of their gown and hood. Hopefully the rain will stay away until after the event.

Welcome back, WIU students. And best wishes to any of my readers who are graduate or undergraduate students getting ready to get back to work.

Apparently a lot. NY Times

Names have gained increasing importance in the competitive world of higher education. As colleges jockey for market share, they are looking for names that project the image they want or reflect the changes they hope to make. Trenton State College, for example, became the College of New Jersey nine years ago when it began raising admissions standards and appealing to students from throughout the state.

And then there's this...

Many college officials said changing a name and image could produce substantial results. At Arcadia, in addition to the rise in applications, the average student's SAT score has increased by 60 points, Juli Roebeck, an Arcadia spokeswoman, said.

Sadly, no. Many college students do not have the general knowledge of history and literature that was once almo