Wednesday, February 18, 2009

Philosophy on Learning Economics

An expression my nine year old shared with me recently, “Do it. Do it now. Do it right.” He brought this home from school. If that is for an assignment for something like arithmetic in third grade, where there is only one way to do it, then this is good advice. Do your homework. Do it on time. Do it the way you are taught so that it is done right.

When thinking about how I learned economics and how I have tried to teach economics, I would change the expression. When it comes to learning the “art” of using economic logic, I would say that I have the following philosophy for my students: “Do it. Get some feedback and do it again. Keep doing it until it becomes second nature.”

Why the difference between third grade arithmetic and economic logic? Economic logic is an internally consistent set of ideas that give us the capacity to reason out all sorts of things. People who think like economists are good at reasoning out the direction of change in response to changes in incentives. People who think like economists are good at reasoning out the combination of supply and demand changes. However, there are a whole variety of combinations of changes that can lead to ambiguous results. The first step of “doing it” is simply using the economic logic that is available as a tool to try to reason things out.

Getting feedback does not necessarily mean “writing for an exam”. Rather, getting feedback can mean trying your ideas out with friends. It could be at the water cooler at work. It could be at the table at dinner. It could be at the coffee shop with an espresso. It could be at the bar with a glass of wine. The key is to see whether your ideas make sense.

Doing it over and over again essentially means “practice”. Just like any of us who wants to get good at anything would practice. A person will know when things are right. The will make sense, and the person who thinks like an economics will be able to anticipate what economists on the news will say. Maybe not every last detail—but the gist of things.

If a person does this enough times, it becomes second nature. A person need not always think that way. But the fact that the person can makes it possible for that person to understand a lot more about what economics says about how policy could change out future.

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