Peter Coy: How to Use Storytelling as a Teaching Tool

Scott Wolla: Welcome to Teach Economics from the St. Louis Fed, where we provide insights and perspectives that can energize economic education and transform student learning outcomes. On this episode, I’m joined by journalist Peter Coy. Peter has spent a long career at the intersection of journalism and economics, from Businessweek to the New York Times, and many other places along the way. His long and impactful career all started with a chance job opening.

Peter Coy: I was working for Businessweek, and I had covered telecommunications and technology, and there was an opening. Somebody moved out of town in the economics coverage. And the guy who was-- would become my boss was Michael Mendel, and he was a Harvard PhD in economics who had taught at NYU Stern for a while and then decided didn’t want to do academic economics.

And when-- had been hired by Businessweek. And I really admired him, and I said, wow, I could get an on-the-job education from this guy. And that’s what happened. I applied to job, got it, and worked under him for a good number of years and really learned a lot on the job. You know, the theory-- even just how to go find data on the internet and -- I hadn’t really spent much time on spreadsheets before, and he helped me with, you know, Excel and stuff. So it was really starting from pretty much the bottom. And that’s the first time I really extensively wrote about economics.

Wolla: So your background was in history?

Coy: Yeah, as a history major. And then I became a journalist, starting in college and, you know, right on through and really enjoyed writing about all kinds of different things. And one of the things I liked about economics is that it still allows you to write all kinds of different things. You got your micro, you got your macro, and almost everything you can imagine touches on economics or economics touches on it. That’s why sometimes it’s called economics. The queen of the social sciences. And I took that to heart.

Wolla: So was there a teacher, class, or article that made the light bulb go on for you that really helped you see the world economically?

Coy: Well, I did take a year of econ in college. That’s the only formal training I ever had. And Robert Frank was my micro teacher, and he’s still teaching after all these years. So he was pretty much-- young assistant professor back then. And I think he assigned us to Robert Heilbronner’s The Worldly Philosophers. And I still remember a story he told.

I don’t know if he even claimed it was two at the time, but I’m sure it’s apocryphal. It was about teaching the lesson of opportunity cost. He said this guy has a pitch and putt golf course in rural Georgia, and he finds out he’s inherited 10 acres of land in Midtown Manhattan and immediately realizes he could make a mint by building a pitch and putt golf course in Midtown Manhattan. So, yeah.

Wolla: That’s great. And Robert Frank is a very influential economist. I used his textbook for a while when I was teaching, so I imagine having him as a professor was inspirational.

Coy: Yeah.

Wolla: What keeps you fascinated with economics after all these years?

Coy: I think it’s that-- economists are always trying to push up against the frontiers of what’s known and what’s not known. And it’s not an easy challenge. But I think economics has become more data driven and less purely theoretical during the time that I’ve been covering it. And that’s satisfying to watch. And some ways more ambitious and yet modest at the same time, recognizing, you know, what claims cannot be made. And it comes back to what I said before is that you can learn about so many different things by studying it through an economic lens. So I’m not an economist, never claim to be one, but I like that lens of trying to perceive the world. Things are very valuable.

Wolla: So this podcast is about teaching economics. And in some respects-- in many respects, you are in fact an economic educator.

Coy: Yeah, yeah.

Wolla: You write for publications that are general audience for the most part. And you provide your readers a good understanding of the economics and the issues. And you also use metaphor, and I know you’ve done some writing recently on using metaphor. Can you tell us a little bit about how you came to start thinking about metaphor in explaining economic principles?

Coy: I don’t think it was really deliberate; I didn’t say, well, this is a tool that I should employ. It was more like struggling to try to convey an idea, and stumbling upon a metaphor is the best way to do it. And I wasn’t always inventing my own that-- usually not, but finding useful ones.

Wolla: What are some of your favorite metaphors, either that you’ve used or that you use frequently when you’re explaining concepts?

Coy: Well, an example is the diamond and water paradox, which I think is a great one for intro students because why is it that diamonds are more valuable than water-- or, say, more costly than water is probably a better way to put it-- when they seem to serve no purpose and water is essential to life, and it’s really a matter of supply and demand that--- there’s plenty of water and very little, very few diamonds. And if you were in a desert and your canteen ran dry, you would give all the diamonds in the world for one sip of water.

Wolla: Right. That’s great. What makes metaphor such a powerful way to explain economics?

Coy: I think it’s the idea that a metaphor takes you from something you know, which is called the source, to something you don’t know, which is called a target. And it makes a bridge between those two. So the invisible hand would be a classic example. Adam Smith’s “invisible hand”. Everybody has a hand. They know what a hand is.

They know what it’s useful for. A hand does things. Invisible hand does things also. It’s as if the economy is steered by an invisible hand. I think it was an allusion to God, but it works whether you’re a theist or an atheist. The workings of people pursuing their own self-interest cause human needs to be satisfied. And when you put it in those words, it feels kind of sterile. But if you imagine an invisible hand gradually moving the butcher and the baker to make their-- the meat and the bread, then you get it.

Wolla: That’s great. And, you know, the invisible hand. Adam Smith are always good go-tos for economics teachers. Could you walk us through an example, maybe a recent piece where you use the metaphor to help us crystallize the idea but also how you use it to help crystallize the story.

Coy: Right. I wrote a recent article for a publication called Tech Icons in Britain about why it is that-- the difficulty that central bankers have in communicating. And I hit upon the idea that part of their problem is that they have different audiences that they need to reach out to. They have the audience of professional economists who hang on their every word and study the transcripts of Fed meetings. And then you have the general public, which is barely aware that something called a Federal Reserve even exists but care a lot about inflation and unemployment and so on. And so all the great central bankers are forced to communicate to those two audiences simultaneously. So the metaphor I came up with was two audiences, one lectern, and they liked that so much they made it the headline of my article.

Wolla: That’s right. I love it. How do you balance the need for accuracy with creativity when you’re using metaphor? In other words, how do you make sure the metaphor clarifies rather than distorts the economics?

Coy: Right. That’s a real risk because obviously, a metaphor is almost by intent and design. Not-- it’s not the target. It’s a bridge between the source and the target. And so it’s never going to be precisely representing what you’re trying to describe. It’ll represent some essential feature. So you need to be conscious when you’re writing to use it in the way that it does apply and avoid taking it where it doesn’t apply. And you sometimes hear, writers-- either by mistake or to be funny-- overdoing a metaphor and carrying it way beyond where it should go.

Wolla: That’s always a risk, I’m sure. And for readers, it could be hard to differentiate or to know when the writer is going too far.

Coy: Yeah, yeah.

Wolla: So I’m sure there’s a lot of responsibility for the author, for the writer, to make sure they’re transmitting the right ideas.

Coy: Yeah.

Wolla: Many of our listeners are teachers or professors who use examples and analogies to help students get it. You know, help them understand the concept. What can educators learn from journalists about using metaphor? But even just beyond metaphor, the skills that you employ in journalism-- what can educators glean from what you’ve learned?

Coy: Well, what we are good at is grabbing people and holding their attention because we have no choice. As students who signed up for a course presumably want to complete the course and get a grade, somebody reading what we write or listening to-- or what we broadcast, as in the case of, like, Stacey Vanek Smith, can turn it off, turn the page, close down a computer in an instant. And very often they do, so our goal is to keep them as long as we can and grab them by the lapels and hold them and see if we can get that idea across. Mike Mandel, I mentioned him earlier, used to tell me one idea-- just get one idea across and you can go home happy. Try to convey too much and you lose them.

And the metaphor is good for crystallizing that one idea you want to get, and it’s not the whole thing. I think one difference is that between how what we do and what, you know, educators do is that the educators would use that as a starting point, not a finishing point, because they would want to go on and show the graphs, show the equations, but the metaphor is a bridge from kind of knowing nothing to suddenly the graph makes a little more sense when you start with the intuition. And I go to professional economic conferences, and even in these panels or paper presentations with super smart PhDs talking with each other, you’ll hear them use a phrase: “The intuition behind this.” Right. Well, that’s what they’re doing. They’re kind of doing the same thing we do-- giving people the intuition. Then you can go on to the lemmas.

Wolla (VO): We’re going to take a quick break. When we come back, Peter Coy shares powerful metaphors for teaching economics and explains why economic literacy matters.

[FRE promo]

Wolla (VO): Welcome back to Teach Economics. Before the break, journalist Peter Coy spoke about what attracted him to economics and how he discovered metaphors as an effective tool for communicating complex ideas. We’ll pick things back up with some examples.

Wolla: And I think your point also about doing one thing is also good advice for educators. I’m involved in writing a lot about literacy-targeted teaching, which is really focusing on the core concepts instead of the encyclopedia of economic concepts. So I think there’s a lot to learn.

Coy: I mean, I give it-- I had a story when before my wife and I got married, we decided we should take some dancing lessons.

Wolla: Okay.

Coy: And the teacher-- we had one motivation, which was just to get through the wedding not looking totally foolish. The dancing instructor wanted to-- he teaches many different styles. You know, the Waltz, the Fox Trot, the Cha Cha. So we came away having been exposed to many kinds of dance and not being able to do any of them.

Wolla: That is actually a great--

Coy: Metaphor! How about that.

Wolla: --metaphor, exactly. I think the experience of many an economics student is the same in a principles course. They learn a lot of different concepts but learn that very shallowly, and perhaps it doesn’t stick very long. In your experience, what makes a metaphor stick? Is it the humor, the surprise, the simplicity, the emotion?

Coy: Well, you named four good reasons. I don’t know how I would rank those four, but they’re not all funny. But that humor certainly helps. And the simplicity, the surprise can very often be it-- it’s like, because what happens is it there’s a spark there. It’s like, oh, now I see what they’re trying to say. You can give that spark. That’s what a beautiful thing.

Wolla: Sure.

Wolla (VO): We’re going to take a quick break. When we come back, Peter Coy shares powerful metaphors for teaching economics and explains why economic literacy matters.

[FRE promo]

Wolla (VO): Welcome back to Teach Economics. Before the break, journalist Peter Coy spoke about what attracted him to economics and how he discovered metaphors as an effective tool for communicating complex ideas. We’ll pick things back up with some examples.

Wolla: You’ve been writing about the economy for quite a while. Through booms and busts, and bubbles, and recoveries. Are there metaphors that have stood the test of time?

Coy: I mean, I use different ones at different times. You know, as needed. So you don’t want to bore people by repeating yourself. I have a book coming out-- I don’t know if I’m going to get around to that, but called “Economics Without Numbers”. And in the course of that book, you know, like everybody else, I had probably sort of-- without really intending to use dozens of metaphors in my writing over the years.

And I started thinking I should compile these, and I could probably come up with, you know, 50 or even 100. Well, I have more than 500 now. Some of them I’ve never used in print myself, but I found them by just reading widely and in different cultures, different languages even, and different time periods. Here’s one from Thomas Jefferson-- was talking about, what we would now call a public good. He said an idea is like a candle. There’s a metaphor in that somebody can take light, put his taper to my taper, and have a light without diminishing my light.

Wolla: So, these transcend, time, human existence, and culture.

Coy: They-- well, I think they’re embedded in culture. But the good ones are [inaudible] able to go above it, but they come out of a certain time and place, which actually gives them a certain richness too.

Wolla: So, “Economics Without Numbers”, the book that you’re working on-- and I love the title.

Coy: Thanks. That’s the tentative title. It may change its name, but that was my book agent’s idea.

Wolla: Because I think, especially students sometimes are intimidated by the numbers or the graphs. So being able to explain economics aside from that, and it might be a bridge toward--

Coy: Right. Yeah. I would stress the word “bridge” because I’m not trying to sit here saying that you can learn everything you know about economics. Just say, like, reading my book, although go ahead please. I do believe that you should master the graphs. I remember when I was going to start that econ job at Businessweek. I went ahead and bought a used textbook. I think it was Samuelson, actually, and just went through all the graphs and made sure that I could recreate them myself-- the harbor triangles and everything else. And then I felt, okay, I think I can do this job now.

Wolla: Are there metaphors that you wish the profession would retire? They’re tired. You wish economists or economic journalists would just stop using them?

Coy: Well, there’s one that’s actually worse than tired, and it’s actually misleading. And that’s the “tighten your belt” metaphor, which I think most economists understand that it’s not good, but politicians use it all the time. So again, the concept is that if you’re a family that runs into financial trouble, the right thing to do is reduce your consumption-- metaphorically speaking, tighten your belt as if you’re not eating as much.

Either way, hope it’s not to the extent that you’re actually starving yourself to death. But conceptually, that’s the right thing to do. For a government, that’s not the right thing to do because you’ll have the paradox of thrift-- to use another, I guess that’s a metaphor, Keynes. Where you spend less-- that means less income for someone else. Then that family or company worker has to spend less, and you cycle downward. And you need-- the government has the ability to do deficit spending to fill in the hole in demand.

So, it’s not being profligate. It’s not being foolish. It’s the right thing to do to get out of a slump—“priming the pump,” to use another metaphor. There’s metaphors everywhere.

Wolla: That’s right. So I know the one of your roles, is, as a journalist or economic educator, to address misconceptions. And there are a fair amount of misconceptions that people have about the way the economy works. As a journalist, how do you think about misconceptions and how do you go about trying to explain it in a way that maybe pushes some of that misunderstanding aside?

Coy: This is a very hard problem, and I don’t claim to have cracked it. And I think probably a lot of people listening to this podcast will relate. But misconceptions can be deeply lodged in people’s minds. And a classic one is the idea of the lump of labor fallacy, which is that there’s only so much work to be done.

And if one person gets a job, then that means somebody else has no work to do. And the related one, as it applies in international trade, is that any country that has a surplus with us is trying to take advantage of us. It’s a zero-sum thinking, and I believe that it’s-- one of the reasons it’s so hard to dislodge is that it’s imprinted on us from when we’re babies.

If we’re having a playdate and some other baby steals my blocks, you know, I want those blocks back. And I think if we can make educators to do no more than to get rid of some of those pernicious misunderstandings-- you know, they may not teach everything about indifference curves, but if they could get those few ideas across, they’d really be providing a service.

Wolla: No, I agree. When you think about your audience, you’re often explaining economics to non-specialists. Teachers face a similar challenge with students seeing economics for the first time. What parallels do you see between your role as a journalist and our audience, as educators?

Coy: Well, especially if you’re talking about intro students, principles courses, then you’re right. They’re seeing these things for the first time. And I guess in some ways that’s thrilling for an educator because you have a chance to make their eyes light up, you know, these cool ideas. But it also means that you’re hitting students with-- you know-- the seeds may not fall on fallow ground, and that can be frustrating.

But we have the same thing. We don’t know who our audience is. We have a general idea, but, you know, I have some people who read me who are PhDs, and others who haven’t finished high school. And I’ve got to find a way to speak to all of them in a way that they’ll all get something out of it.

Wolla: If you were designing a metaphors in economics workshop for teachers, what would you include?

Coy: Do you mean in terms of actual metaphors?

Wolla: It could be both, you know, some basic instruction about why metaphors are important but then also some go-to metaphors that might be really useful.

Coy: Right. Well, again, I have more than 500 of them. So first thing they need to do is buy my book, which is not out yet, by the way. But it’s scheduled for publication early ’27. But it’s not a standalone be-all and end-all teaching tool. So I think the metaphor can be embedded in a course along with other tools. The strength of it is that it-- again, it’s that, it’s sort of like setting up things for-- maybe the first thing you want to do is give people the intuition.

Wolla: So, Peter, I would really love to hear some examples of metaphors that are just really useful in helping to understand. And I imagine that with your book having 500, you probably have a list of good go-to metaphors.

Coy: I mean, they’re all over the map. Some of them are more finance, i.e., personal finance. I was just browsing through the draft of my book recently. I saw one from Beth Hammack, who’s the new Cleveland Fed president when she was at Goldman Sachs and Treasury Borrowing Advisory Committee. She was talking about she was trying to explain to people how repo lending works.

And she said, just like you go to the bowling alley, and you don’t just take the bowling shoes-- you have to give me your own shoes. That’s the collateral. I thought, oh, wonderful. You know, the metaphor of the house as an ATM. You borrow against your house through a home equity loan or something like that, you get cash out.

That was a metaphor that really clicked with a lot of people too. There’s the story of Chesterton’s Fence, which is the idea that you shouldn’t tear down a fence until you know why it’s there. Once you can explain why it’s there, then you might be allowed to tear it down. Cockroaches-- Jamie Diamond of JPMorgan Chase was just describing how, you know, when you see one financial problem, there are probably others. And he said, it’s like when you see a cockroach, if you see one cockroach, then there’s probably plenty of others around. I could go on and on.

Wolla: That’s really great. Peter, what’s one economic metaphor that changed the way you think about the world?

Coy: Well, I think-- the concept of game itself-- game theory has become increasingly important in economics. And one type of game is the zero-sum game, but there are also positive-sum games. And I think that one difference between economists and members of the general public is that economists are more likely to see the opportunity for positive-sum games, and the more they could get that idea across to others, the better.

Wolla: Yeah, no, I totally agree. And it works in many different areas of the economy, as you mentioned, there’s more than one concept related to that idea. Peter, I want to thank you for being here on this podcast. I’m a big fan of your work.

Coy: Thank you.

Wolla: Thank you for what you do for educators. I know a lot of educators use your work in the classroom as a supplement to their textbooks and their lectures, but also what you do for the public in writing economics in a way that’s understandable and increasing economic literacy among the public. So once again, thank you for being here. It’s been a pleasure.

Coy: Well, thank you for what you do at the St. Louis Fed and the new Federal Reserve education website. Give it a plug. And, of course, FRED-- everybody loves FRED. You guys are doing a lot of great work.

Wolla: Thank you very much.

Wolla (VO): Thanks for listening to my conversation with journalist Peter Coy. If you liked this show, please subscribe anywhere you get podcasts, and leave us a review—each one really helps. Also, be sure to tell your friends! Until next time, I’m Scott Wolla, and from the St. Louis Fed, you’ve been listening to Teach Economics.