What's Wrong With the Macro AP
By Bryan Caplan
Today my 8th-grade homeschoolers take the Advanced Placement test in Macroeconomics. Back in 1989, when I took this exam, it covered little more than 1960s Keynesianism. The current test is marginally better. Now we’ve got long-run Aggregate Supply curves and long-run Phillips curves to remind students that pumping up demand has clear long-run dangers and little long-run benefit. But this AP is still far worse than it should be.
The biggest lacuna: There’s essentially nothing on the fundamental question of macroeconomics: Why are some countries rich and others poor? Short-run macro stabilization policy questions outnumber long-run growth questions by at least 20:1. Part of the reason is probably the legacy of Keynesianism: “In the long run, we’re all dead.” But the main reason is that the test writers fear to be empirical – even when the empirics are clear. Saying, “Economic freedom is a major cause of development” just sounds too ideological, even when the statistics are pretty clear and the natural experiments are crystal clear.
The essay portion of the test is especially defective. The history AP essays demand high-level understanding of the world. A typical U.S. history question would be, “To what extent did slavery cause the Civil War?” The econ AP essays, in contrast, test mid-level understanding of models. A typical macroeconomic question:
Suppose Rankinland has a current account deficit. Rankinland’s currency is called the bera.
(i) What will initially happen to the current account deficit in Rankinland solely due to the change in the real GDP from part (b)(iv) ? Explain.
(ii) What will happen to the international value of the bera solely due to the change in the real GDP from part (b)(iv) ? Explain.
This is fine material for the multiple-choice section of the test, but the essay ought to tap students’ ability to apply the concepts to a complex real-world economic problem. For example, you could give students six documents and statistical series about the Venezuelan economy for 2012-2017, then have them explain what’s going on.
Too hard to grade? Historians bravely rise to the challenge, why can’t we economists do the same?