## Transforming Economics Teaching

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### Background and impetus for curriculum reform
- In the early 2010s, a widespread feeling that economics teaching was failing students prompted a group of professors to revamp the undergraduate economics curriculum.
- In 2013, Wendy Carlin, Samuel Bowles of the Santa Fe Institute, and others including Oscar Landerretche from the University of Chile founded Curriculum Open-access Resources in Economics—also known as CORE Econ—to provide high-quality, open-access courses worldwide.
- CORE Econ aims to broaden the standard curriculum, increase access to economics education, and attract and retain a more diverse student body by including issues such as climate change, inequality, innovation, and the future of work.

### Public perception and limits of traditional teaching
- Public image: economics often represented by supply and demand curves crossing; commonly associated with “money” and the image of “a white man in a suit pointing at a spreadsheet or at a screen with stock prices.”
- Traditional Economics 101 conveys a narrow view: “economics is mainly about markets working well,” implying limited relevance to crises like a pandemic or the climate crisis.
- Developments in theory, empirical tools, and data have shifted focus away from narrow state-versus-market debates, opening new space for economics.

### Expanding the conceptual framework
- Proposal: move beyond a single spectrum from “the state” to “the market” by adding a third pole, “civil society,” to encompass altruism, reciprocity, dignity, sustainability, “in- and out-group” thinking, social norms, and private power.
- Interdisciplinary contributions: psychology, evolutionary biology, sociology, political science, and history become relevant where games specify “who does what and who gets what.”
- Behavioral economics has adopted methods from social psychology and evolutionary biology, developing experimental methods in the lab and the field.

### Relevance to real-world problems: pandemic and climate
- Pandemic lessons:
  - Face-to-face interaction risks produced spillovers to economic relationships.
  - Manager–worker conflicts and power dynamics within firms became salient; traditional classroom models often omit who exerts power within the firm.
  - An expanded economics that includes non-market interactions addresses problems beyond traditional efficiency concerns.
- Climate implications:
  - Traditional debate framed as state solutions (e.g., bans, subsidies) versus market solutions (e.g., carbon tax, cap and trade).
  - Neither approach alone “mobilizes all the mechanisms available,” and both may be inadequate.
  - The new economics emphasizes how changing preferences toward greener initiatives can complement state and market measures.

### Integrating ethics, norms, and normative reasoning
- Inequality is frequently cited as the most pressing problem economists should address; climate and sustainability rank second.
- Ethical questions arise: fairness of inequality; weighting future global citizens in climate cost–benefit calculations.
- Economics should equip students with analytical tools to connect positive analysis to normative criteria, rather than excluding normative questions.
- To prompt normative reflection, educators can use John Rawls’ veil of ignorance to ask whether allocations are fair when students do not know if they would be winners or losers.
- Critique: restricting normative evaluation to Pareto improvements biases toward the status quo; students should also ask “Is there some allocation that would be fairer, and are the rules of the game that produced the allocation fair?”

### Curriculum reform: coherence, relevance, and new benchmark models
- The curriculum should be COherent and RElevant—the capitalization signifies CORE Econ’s aim to implement radical change in introductory economics.
- A new curriculum must:
  - Reflect contemporary problems and demonstrate that economics provides tools to engage with them.
  - Be anchored in a new benchmark model reflecting what has been learned over the past 30 or 40 years about behavior, interaction under incomplete information, and policy implications.
- Examples from CORE’s work:
  - The Economy 2.0 (CORE’s latest e-book) introduces a new way of teaching labor markets that incorporates recent research on monopsony power.
  - The model helps students understand the effects of the minimum wage and models the aggregate labor market as part of an integrated treatment of unemployment, real wages, and inflation.
- Teaching complex problems:
  - Topics such as housing and financial market crises, environmental tipping points, and adoption dynamics for technologies like electric vehicles require models with instability and multiple equilibria.
  - Exposure to a variety of model types teaches students how economic models can illuminate different kinds of complex problems.

*Source: Interview with Wendy Carlin, F&D, March 2024.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2024/03/cafe-econ0324.pdf_