I recently discussed the teaching of Ph.D. Microeconomics with a noted professor in a top five econ department. His bottom line: The curriculum is virtually the same as it was when I took Ph.D. Micro a *quarter century ago*. Among active researchers, the status of pure theory has dramatically fallen during that period, but pure theorists retain a stranglehold over the first-year curriculum. This surpasses even my pessimistic expectations for the education system; I would have thought that top schools would have at least marginally decreased pure theory in favor of empirical work. But at least according to my source, this hasn’t happened.

Rather than decry this stasis, however, I thought it best to write a dialogue.

The Scene:

Meeting room at a prestigious university

The Cast:

Professor Proof, old-school micro teacher

Professor Raze, radical curriculum reformer

Professor Well, swing voter on the curriculum committee

Prof. Raze: I just reread your Ph.D. Micro syllabus, Prof. Proof. Frankly, it’s ridiculous. You haven’t changed the content in a quarter century. You make zero effort to introduce students to any of the great empirical work that’s been done in the meanwhile. Instead, you waste a year of their lives on useless math. Enough is enough!

Prof. Proof: Relax, Raze. Students have plenty of time to learn empirical work later on. The point of Ph.D. Micro is to train economists in the fundamental ideas of their discipline. That’s what I set out to do when I wrote the syllabus 25 years ago, and that’s what I’ll continue to do.

Prof. Well: Let’s take it down a notch. We’re the curriculum *committee*, so we have to work together, Raze. And the chairman appointed us to reach a consensus, Proof. You can’t just stonewall.

Raze: [sullenly] Fine.

Proof: [snottily] Fine.

Well: Let’s start with Raze. What exactly is wrong with Ph.D. Micro as it is?

Raze: We spend the whole year teaching mountains of irrelevant math and theory. The opportunity cost is high, because we could spend that time teaching promising young minds about how the economy actually works – not to mention basic economic principles. And it’s a needless entry barrier for students who care about the real world.

Proof: “Irrelevant math and theory”! So we should just become sociologists?

Raze: I never said that. I’m all for teaching math that students are likely to use in their research, and theories that actually shed light on the real world.

Proof: [harumphs] That’s already what I do.

Raze: [mock incredulously] Oh really! Students are likely to use topology in their research?

Proof: Many do.

Raze: Name one.

Proof: Well, two years ago my student Chloe used topology in her dissertation.

Raze: And for her sake, all her classmates had to spend weeks suffering through the subject?

Proof: Suffering? It was their privilege. Topology is one of the most beautiful branches of mathematics.

Raze: See what I’m talking about, Prof. Well? This is all about micro theorists’ bizarre aesthetics; it’s got nothing to do with training future economists.

Well: Here, I’m inclined to agree. If you want to teach math because of its intrinsic beauty, Proof, you should do it in a math department.

Proof: [exasperated] Even so, you need topology to grasp basic economic theorems, starting with general equilibrium theory.

Well: Naturally…

Raze: [annoyed] Theorists need topology to prove the theorems, but that hardly means that students need to actually learn topology. Why not just give the intuition behind the theorem, point the rare future theorists to some reference works, and move on? A single lecture would suffice.

Proof: [outraged] A single lecture? This is a top five economics department – and you want us to turn out a generation of ignoramuses?

Raze: Just tell me this, Proof: How empirically relevant is general equilibrium theory anyway?

Proof: There are many applications…

Raze: How many rely on more than a quick intuitive version of GE theory?

Proof: That’s hardly the point.

Raze: Uh-huh. More importantly, how many of our students *realize* that the sparse empirical applications of GE rely on no more than a quick intuitive version of the theory?

Proof: That would hardly motivate them to study the topic.

Raze: In other words, you keep your students in ignorance of the deep irrelevance of what you’re teaching them, because otherwise they’d be less motivated to study it.

Well: Surely you’re not proposing that we cut theory altogether, Raze?

Raze: Far from it. I think we should teaching empirically relevant theory, using as much math as empirical researchers need to know.

Proof: And according to you, what would qualify?

Raze: Basic supply and demand for starters. Game theory. Information economics.

Well: Doesn’t sound too different from what we already do.

Raze: Actually, it is. First, I wouldn’t teach any more math than you actually need to grasp the intuitive idea. And second, I would immediately follow any theoretical topic with relevant empirics.

Proof: But often the “relevant empirics” directly contradict the theory. See much of behavioral economics.

Raze: That’s a bingo. Our students ought to learn the extent to which standard economic theory correctly describes the real world. I don’t mind teaching influential flawed theories, as long as students realize the severity of their flaws.

Well: I’m worried that our students will barely remain economists if we follow your advice.

Raze: Look, what’s intellectually distinctive about economists isn’t our knowledge of math. It’s our rejection of Social Desirability Bias.

Proof and Well: [in unison, skeptical] What?!

Raze: You know how economists are always saying, “Look at what people do, not what they say”?

Proof: Yes…

Well: Yea…

Raze: Well, psychologists have empirically confirmed that we’re on to something. When the truth sounds bad, people tend to say – and often believe – falsehoods. Psychologists call this “Social Desirability Bias.”

Proof: What in the world does this have to do with Ph.D. Micro?

Raze: Plenty. One of the main goals of Ph.D. Micro should be to root out Social Desirability Bias from our students. It’s central to “thinking like an economist.”

Well: What, stuff like, “If you put an infinite value on life, you’d never cross the street”?

Raze: Exactly. Some of the wisest words ever said.

Proof: You want to replace general equilibrium theory with a bunch of trivial slogans?

Raze: They’re deep truths, not “trivial slogans.” Yet many of your students have barely heard them.

Well: Could you name some others?

Raze: Sure. I’ll express them as slogans, though each deserves multiple lectures of elaboration.

“If you’re right, why hasn’t anyone gotten rich using your idea?”

“What’s are the relevant elasticities?”

“What precisely is the market failure supposed to be?”

“What are the regulators’ incentives?”

“Immigration is trade in labor.”

Proof: So you want to politicize Ph.D. Micro. [sarcastic] Great!

Well: I have to admit that I share Proof’s concerns, Raze. This isn’t science.

Raze: If it’s true and important, who cares if it’s “science”?

Proof: See, Well? Raze doesn’t even *believe* in science.

Raze: [losing his cool] Fine, I misspoke. Yay, science! My point remains: We should radically overhaul our Ph.D. Micro curriculum. Proof should stop wasting our students’ time with irrelevant math and theory. He should teach them how the economy actually works, delving into math and theory only insofar as it serves that goal. None of this will “turn our students into sociologists” as long as he instills the deep truths of economics along the way.

Well: I see…

Raze: Actually, since we could never trust Proof to do any of this, you should hand his class over to me.

Proof: [glares daggers at Raze]

Well: Very well. I think I have enough information to make my recommendation to the chairman.

Raze and Proof: [in unison] Namely?!

Well: You both make good points. I’m going to ask the chairman to ask Proof to update his syllabus in light of the last quarter century of research.

Raze: And..?

Well: That should do it.

Raze: But that will change next to nothing! Proof will be the sole judge of what “needs to be updated”!

Proof: [smugly] I promise I’ll do a scrupulous job.

Well: [self-satisfied] Please see that you do. We’ll revisit this issue again in three years to see how things are going. Until then, colleagues!

## READER COMMENTS

## Denver

## Jun 22 2018 at 1:04pm

Look, what’s intellectually distinctive about economists isn’t our knowledge of math. It’s our rejection of Social Desirability Bias.

If only. Economists might be a little better than the average person, but if this were true, I think the profession as a whole might be a little more skeptical of findings that say minimum wage laws don’t cause unemployment.

## Alexandre Padilla

## Jun 22 2018 at 1:06pm

Bryan is indeed correct but I would argue that this part is incomplete even though I understand that’s not the main goal of the post:

“Raze: Plenty. One of the main goals of Ph.D. Micro should be to root out Social Desirability Bias from our students. It’s central to “thinking like an economist.”

Actually, the one of the main goals of any economics course, particularly, microeconomics course, should be root out Social Desirability Bias from our students and more so at the undergraduate level than at the graduate level. Given that most undergraduate students take one, at most two courses in economics, we should indeed make one of our main objectives to eliminate Social Desirability Bias from our students, not just the Economics graduate students.

## nobody.really

## Jun 22 2018 at 2:25pm

Absolutely. That was a crucial part of my first undergrad econ class. Literally, it changed my life

But, to change topics, I had the opportunity to gain these insights only because the class didn’t set up needless mathematical barriers to entry. My prof would eventually reel me into econometrics, etc., but not until after the intro class got that econ hook was firmly planted in my lip.

## nobody.really

## Jun 22 2018 at 1:22pm

Nice!

Never got the Ph.D, so maybe that’s a special case. But as a general proposition, I share Raze’s view, specifically:

1. Math forms a needless entry barrier for many topics, econ among them. We should keep that barrier as low as possible for as long as possible.

2. While teaching the powerful (and math/graph-based) classical econ models, we should provide illustrations showing how the models accurately predict outcomes–and where they failed to do so, and conjectures about why. (That is, toss in some behavioral econ.)

3. Yes, as sociologist do more rigorous stats, it begins moving toward econ. What’s wrong with that? Imitation is the sincerest form of flattery. Likewise, as economists do more behavior studies, it moves more toward soc. Gosh, it’s almost as if both econ and sociology were studying the same species….

4. Finally, yes, arguably econ’s strongest quality is its challenge to Social Desirability Bias.

There’s an old joke about the magic ratio, reflecting the maximum percentage of economists you can invite to a party before you ruin the conversation. It’s not entirely whimsical. Many people hold views–or at least only express views–that confirm social norms. (“Surely there’s a strong distinction between prostitutes and the rest of us!”) Where they observe apparent conflicting evidence, they dismiss it as an anomaly. Economists are not immune to this tendency, but have powerful models that lead to predictions–even when those predictions conflict with social norms. (“Actually, both theory and evidence reveal that people move in and out of prostitution in response to demand….”) That is, econ helps people overcome this bias–even as it ruins dinner parties.

New research topic: Compare the BMI of your typical economist and your typical sociologist and see who has been going to more dinner parties. You can guess my hypothesis….

## Malcolm Kirkpatrick

## Jun 22 2018 at 2:32pm

Theories provide maps which aid navigation through the real world. Useful maps omit much data. What a map will omit will depend, in part, on the scale. A useful map of Eurasia might not be lumpy where it indicates mountains, wet where it indicates lakes, or hot where it indicates volcanos. Arithmetic is a map. What is the sun of one cloud and one cloud? What is the sum of 10,000 rabbits and 10,0oo rabbits, released onto a predator-free, grass-covered island? Wouldn’t the answer depend on how long it took you to count the rabbits? A mature understanding of the theory will include some idea of the circumstances which affect the accuracy of the theory’s predictions in a given application.

The frequency of radical revision measures the immaturity of a theory. Copernicus, Galileo, and Newton overturned Aristotelian physics. Darwin overturned Biblical notions of species stability. The academic environment invites theorists to dream of being the next Einstein or Darwin. That is not easy. “That theory was constructed by dead white men” doesn’t do it for me as a courageous radical revision. The academic environment also invites theorists to build a reputation on generating tenth-decimal precision in predictions where, given the imprecision of real-world measurements, second-decimal place accuracy is good enough.

Martin Anderson wrote that all the Economics you need to know to write good policy was written down before 1900. Mancur Olsen, Gordon Tullock, and James Buchannan showed why governments often do not deliver good policy. P. T. Bauer lamented that university Econ departments were graduating students whose lack of understanding of basic principles permitted acceptance of bad policy (minimum wage, import tariffs).

Just a few thoughts from an interested non-economist. Please accept my apology if I wasted your time.

## Juan Manuel Pérez Porrúa Pérez

## Jun 22 2018 at 10:00pm

I would ask Prof. Caplan to clarify: what type of economic theory needs simply not to be in the curriculum? (a) Theory à la Debreu’s

Theory of Value, which I agree says little to nothing about the real world; (b) Theory like in Becker’sEconomic Theoryor to cite something I’m reading right now, Cornes and Sandler’s survey of externalities and public (and club) goods?## JFA

## Jun 23 2018 at 7:30pm

I wish my micro sequence had covered Cornes and Sandler. I will say, I bet there is a lot more on matching markets taught than there used to be.

## Jess Riedel

## Jun 23 2018 at 8:57am

It’s important to distinguish between criticizing math/theory for (1) being bad at describing the world and (2) not being useful in cutting edge research. Teaching all the results that are necessary to understand the premises and motivations of cutting edge research is critical, even if those results are never actually used. If the foundations aren’t taught (which they aren’t in my field, physics), researchers choosing new directions on the cutting edge will not actually be able to reason about what’s important from first principles. Instead, they will only be able to pick new research directions “locally”, i.e., by assuming without question the major starting points of their local community (because they are unequipped to reassess them) and moving from there.

## Andrew_FL

## Jun 25 2018 at 9:51am

There would be nothing wrong with introductory micro teaching exclusively pure theory but curiously this post seems to describe abstract irrelevant mathematics as “pure theory” which might be an accurate description, in the math department, but not in economics.

Of course, the last slogan is just economist’s myopia. Changing which polity one is a member of is not solely, not even primarily an economic act. It is primarily a political act. It is not necessary to be “anti immigration” to see that this is true, and the slogan is false: if a retiree emigrates from one country to immigrate to another, in what sense is this “trade in labor”?

## Floccina

## Jun 25 2018 at 4:36pm

The retiree is now buying his services at lower labor costs.

## ee

## Jun 25 2018 at 1:22pm

Seems like academic courses suffer from too much bundling. Professors Proof and Raze could settle this by splitting courses into smaller more focused chunks and seeing where the students go.

Comments are closed.