Standing on the shoulders of giants If Adam

Standing on the shoulders of giants • If Adam Smith can inspire us as economists he can also inspire us as teachers of economics. • Here’s what an inspired Woodrow Wilson said of Smith: – “He constantly refreshed and rewarded his hearers. . . by bringing them to those clear streams of practical wisdom and happy illustration which everywhere irrigate his expositions. ”

What is surprise side economics? • Lecture ideas to make economics – – Less abstract More intuitive More relevant More memorable • Combines entertainment with education – Element of surprise gives advantage to “live” lecture – Multimedia: animated slides, audio, video, on-line • Active learning component – Small group “work-outs” in class – Live experiments: participate or watch live demo • Not for everybody!

Ideas for teaching: No single way is best for all OLD NEW

03_08 A PRICE Supply curve 300 280 260 240 Equilibrium price rises New intersection 220 200 New demand curve 180 160 Equilibrium quantity rises 140 Demand curve 0 5 10 15 20 QUANTITY

I bet you wonder how I knew about your plans to make me blue with some other guy you knew before. Between the two of us guys you know I love you more. It took me by surprise (drive me crazy), when I found out yesterday. Don’t you know that. . .

Could you sketch the supply and demand diagram by hand?

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08_05 AL QUANTITY

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Economies of Scale

IT’S MACRO Put on your Big Picture Glasses

We will answer their demands for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.

WELCOME TO A school for central bankers. Dedicated to teaching the science and art of monetary policy.

A case where macroeconomic principles were given low weight in the economic policy decisions

To get a gut-feeling for the idea of comparative advantage, let’s imagine 2 people with 2 skills: lawyer economist

Survey Question Do you learn more going to a live lecture or watching online? • I learn more online 15% • I learn the same online versus in lecture 42% • I learn more by attending the lecture in person 44%

Active learning in large lectures • Classroom experiments • Small group work

Classroom experiments in large lectures • Partial class participation – Example: double oral auction – Some students participate as buyers and sellers on stage – Rest of the class observes how the market works • Total class participation – Example: free rider experiment

Free rider experiment • Students invest fixed number of tokens in private account and/or public account • Public account yields a higher interest rate, but the dividends are shared with everyone • Six rounds • No communication • Results posted after each round • Break for communication between rounds 3 and 4 • Cash prize for one randomly selected person

Free rider experiment Fall 1999 -2000

Free rider experiment and learning • Students quickly recognize similar phenomena in different settings • Strong impression in the minds of the students • “I believed in humanity… until today!”

Small group work in large lectures • Important characteristics: – “SGW mode” • verbal and audiovisual clues • example: Economic Jedi – very small groups: pairs (with neighbor) – very focused: one small problem or subset of a problem, not a big discussion – very short: 90 seconds to 3 minutes – share findings with the whole class

Economic Jedi: The mystery of increasing poultry consumption (1) • Why has consumption of chicken and turkey increased so dramatically over the last several decades? • Small groups: – Draw initial equilibrium in poultry market – In the same graph, show what could have happened to explain the increase in the consumption of poultry

Economic Jedi: The mystery of increasing poultry consumption (2) • Alternatives: – increase in demand: consumers are more health conscious and have switched from red meat to poultry. – increase in supply: cheaper ways of raising chicken and turkey and getting them to the market • How would you check which hypothesis is true?

Economic Jedi: The mystery of increasing poultry consumption (3) • Between 1950 and 1990 the real price of poultry decreased from $2 to $0. 80 per pound. • Changes in supply were more important. • Mystery solved!

Assessment • Results – More small group work and discussions improved performance – Peer review and the additional reading did not improve performance

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