Mainstream economics needs an overhaul?

I am surprised that there is no mention of agent-based simulations. That, in my mind, is the big transition that we now face.

Common reform themes

Common themes in the debate at that earlier stage were the need for students to have:

More exposure to economic history and the history of thought;

More practical hands-on experience with data;

Better teaching of communication skills; and

Some exposure to new developments in economic research.

Overall the thrust was for a less narrow and reductive approach to economics than has become the norm in undergraduate courses. Both academics and employers of graduate economists agreed on these needs.

In the UK, a working group set out such principles in a statement of principles (Coyle 2013). It concluded that undergraduate courses should become more pluralistic and should include:

Some economic history, which could be integrated into existing courses, especially macroeconomics;

An introduction to other disciplinary approaches;

Possibly ‘tasters’ of the frontiers of academic economic research with potential policy application, such as behavioural economics, institutional economics, and post-crisis developments in financial economics;

Awareness of some of the methodological debates in economics;

Confronting all theoretical frameworks with evidence and encouraging a healthy scepticism towards all assertion from whatever source.

What do these general principles mean in practice?

Even a relatively minimal interpretation implies a substantial amount of change in many undergraduate economics programmes. In many universities, the core curriculum settled into a predictable rut. This interacted with two factors: (i) incentives for academic research to focus on technical increments to knowledge – contributions aimed solely at professional peers, and (ii) rising teaching loads and student numbers stemming from pressures on university finances.

Despite the great interest in reform among economists teaching undergraduate courses, change will take some time as these various barriers are overcome.

There is probably the widest agreement about changes such as:

Re-introducing elements of economic history into core modules;
Incorporating some issues on the frontiers of research into undergraduate teaching;
Encouraging inter-disciplinary interest; and
Ensuring students are taught key skills such as data handling and good communication.
A number of economists have commented on the desirability of updating the curriculum to reflect interesting areas of research and ‘real world’ examples (see e.g. Seabright 2013).

More disagreement exists when it comes to the question of the character of economics itself, and the extent to which the experience of the past six years calls the mainstream of the subject into question. Andrew Haldane, newly appointed as chief economist of the Bank of England, argues: “It is time to rethink some of the basic building blocks of economics.” (Post-Crash Economics Society 2014: 4.) Student groups campaigning for reform would clearly agree on the need for a radical reinterpretation of what should be in the core courses or modules.

There is some overlap between their views and those of the mainstream. For example, the UK working group cited above also recommended greater pluralism in economics: “Hostility towards other approaches is the antithesis of a dynamic self-critical discipline that is genuinely seeking to discover new and better ways of understanding the world.”

But it added: “That said, students should not be left unnecessarily confused or with the impression that all schools of thought have an equal standing, or that ‘anything goes’. There should be a balance between a) providing a coherent ‘workhorse’ framework for intellectual development and building analytical skills, and b) the candid highlighting of uncertainty, the limits of economic knowledge and the existence of serious alternative views and approaches.”