Matthew C Klein, Columnist

Fixing What's Wrong With Economics 101

Less abstract math and more real-world examples would make the subject more useful.

December 4, 2013 at 2:32 PM UTC

Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and its economics blog, Free Exchange. Before that, Klein was a research associate at the Council on Foreign Relations, where he spent more than two years studying the history of the Federal Reserve and the intellectual history of monetary economics for an upcoming book by Sebastian Mallaby. He also worked at Bridgewater Associates, where he studied the economies of Central and Eastern Europe and advised institutional investors on asset-liability management. Klein has a bachelor's degree in history from Yale University. Originally from Chicago, he lives in New York.

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Harvard's most popular course is Ec 10, the introductory class in economics. This fall, 760 undergraduates were enrolled -- almost half the school's freshmen. Economics is the most popular major atHarvard, Yale and Princeton. Rightly or wrongly, these students and others will have an outsized impact on policy making, so it matters how the subject is taught. Yet many, especially those who only take first-year classes, get a misleading impression of how the economy works. We can do better.

Mike Konczal, a fellow at the Roosevelt Institute, cleverly suggested changing the order in which various topics are introduced. Instead of starting with two people in isolation on an island trading coconuts and bananas, students would learn about the business cycle. Only after those macro concepts have been introduced should college freshmen be asked to think about the legal and cultural institutions that make markets possible. At the end they could worry about how individual firms compete. Princeton economist Paul Krugman likes this proposal but is skeptical that it could ever be introduced. (Harvard's intensive summer course in first-year economics seems to offer a hybrid approach.)