When Introducing Economics to Students, It Helps to Keep Things Simple

Greg Mankiw: Well, the main thing I want to say to economics educators is to thank them for what they do, because I think economic education is so tremendously important for society overall.

Scott Wolla: I’m Scott Wolla. Welcome to Teach Economics. This show is all about the power of bringing economics into the classroom. And when first introducing economics to students, it helps to keep it simple.

Mankiw: Keep in mind that these students, many of them, will only take one course in economics. And so the question is what? For that student what can you leave them with?

Wolla: That’s Harvard University economics professor Greg Mankiw. He taught an intro course at the famed university for 14 years, making sure economics is accessible to people who may only be briefly exposed to the subject, has turned Professor Mankiw into one of the most recognized names in economics and economics education. He holds a PhD from MIT and frequently writes for The New York Times, The Washington Post and The Wall Street Journal. But before becoming a successful economist, Greg was once a new college graduate with an uncertain future.

Mankiw: I wasn’t completely sure what I wanted to do, and I enrolled in both the MIT PhD program in economics and the law degree at Harvard, and I was going back and forth.

Wolla: After completing his PhD, and with a year and a half to go on his law degree, he came to a conclusion.

Mankiw: My advisors were saying, your career in economics looks like it’s pretty promising. Why are you finishing a law degree? And it took me a while to come to an agreement that that was right.

Wolla: That turned out to be really good advice. And he’d go on to write one of the most popular principles of economics textbooks in the world. On this episode, Greg Mankiw talks about his academic influences.

Mankiw: Harvey Rosen, Alan Blinder, Larry Summers, Stan Fisher.

Wolla: He also talks about student engagement and how we developed the ten principles behind his bestselling textbook.

Mankiw: There’s no magic to the number ten. I basically just sort of sat down and tried to boil it down to the simplest words possible.

Wolla: From the Federal Reserve Bank of St. Louis. This is Teach Economics.

Andrea Caseras-Santamaria: Hi, I’m Andrea Caceras-Santamaria, an economic education specialist at the St. Louis Fed. If you’re an educator, we know finding creative ways to engage your students can be a challenge. That’s why we created Page One Economics®. Each issue provides a short overview of a timely topic that offers students an opportunity to learn economics while using close reading strategies. You can find Page One Economics at stlouisfed.org under Resources for Teachers and Students. And while you’re there, be sure to subscribe to our newsletter. Okay, let’s get back to the show.

Wolla: Gregory Mankiw, who has built an impressive career, he is currently the Robert M. Beren Professor of Economics at Harvard University, and his research is published in top economics journals. He is also a research associate with the National Bureau of Economic Research, and a former chair of the Council of Economic Advisers. But before that, he was a freshman in college, thinking about what major he should pick.

Mankiw: I was a freshman at Princeton. I really had no idea what I wanted to do. I thought I’d be a math major. There’s one thing of the being the best math student in your small, high school is the other thing. Going to a college where there’s people who are competing in the International Math Olympiad. And I realized, okay, I’m pretty good at math, but I’m not the level of math that I could really become a professional mathematician.

And so I was sort of floundering around looking for things to do. And I took the Principles of Microeconomics course from Harvey Rosen, and he was absolutely a fantastic teacher. He’s just so clear and funny, but also passionate about the material that he just drew all the students in. During the course of that semester, that was a spring in my freshman year, I went to him and asked him if I if he needed a research assistant. Now I knew no economics, but fortunately I know a little bit of Fortran programing, and that’s exactly what he needed. So he hired me to spend the summer after my freshman year doing Fortran programing for him, and he had to teach me all the economics I needed to know to do the project. And so I learned so much from him, that it was really great. So that’s the first person who is really important to me.

The second person was Alan Blinder. I drifted towards macroeconomics. And I took a graduate level macro course from Alan. Alan was also a fantastic lecturer, he was also my senior thesis advisor at Princeton. And he was a real role model for me at the second half of my undergraduate career. I then went to grad school at MIT. And so the two people there who were important to me. The first was Larry Summers, and I know Larry, I think his second year of assistant professor. So he was already a great economist, but not a famous one yet. So, you know, it was easier to get his attention. And he I thought he was one of the more compelling lecturers in MIT. In a school that had many compelling lectures, but Larry was really a standout. I thought. And then fortunately, in the summer of 1982, Ronald Reagan appointed Marty Feldstein to be chairman of the Council of Economic Advisers.

Marty Feldstein then brought his former student, Larry Summers, to be on the staff of the Council of Economic Advisers, and Larry invited me to basically be his assistant. So I was on the junior staff of the council in 1982-83. And so I worked very closely with Larry for that year, and I really learned a tremendous amount from him.

When I got back to grad school after that year, Larry at that point had left MIT to go back to Harvard. So I was looking for a dissertation advisor. Stan Fisher was my dissertation advisor. And, he was such a role, he was great, gave great lectures, such a role models of a human being, that really kind human being advised lots of students, was passionate about economics. He was only in his, I think, late 30s at this point. And at the time, he seemed so senior to me. But he was tremendously important. So I think I look back, those four people at different stages of my life were very much a role models, and I’ve tried to sort of lead my own career sort of as they theirs.

Wolla: So what was it about their teaching or their instruction that really drew you into the field?

Mankiw: It was a very rigorous, but also very policy oriented. They never did technical things just for the point of being technical. All they had were academics and also a career in academia, but all them spent time in Washington doing Washington kind of jobs. Stan eventually sort of left MIT, became basically a full time policymaker. Then they were also just really clear speakers. And so their lectures were just so outstanding. And it was such a joy to talk, to listen to them. And so they really drew you into the field.

You know, different kind of think about things in different ways. I could tell that their mind worked in a way that was compatible the way my mind worked. I mean, some people are much more theoretical. Some people are much more data driven. They were sort of a combination. They were sort of in the middle of the field, taking theory seriously, taking data seriously, taking policy seriously. But also being very clear expositors of basic economics.

Wolla: That’s great. I read your blog a lot when I was starting teaching and actually was super helpful for me as a, you know, developing economies, developing teacher. And I think I remember reading something about law school that you were…

Mankiw: I did, you know, when I left Princeton, I, I wasn’t completely sure what I wanted to do. So I applied to both PhD programs, and economics and law schools. And I enrolled in both the MIT PhD program in economics and the law degree at Harvard. And I was kind of going back and forth. I ended up finishing a PhD first, and I had the year and a half under my belt of law school and a year and a half to go, and my advisors are saying, do you really need to finish that law degree? Your career in economics looks like it’s pretty promising, why are you finishing a law degree? And it took me a while to come to an agreement that that was right. I don’t regret having spent the time working with you. Because you learn certain things that are different, especially the first year of law school.

I view it as a useful educational experience. But I wouldn’t necessarily recommend people just follow my path. I thought my path was largely based on indecision. Coincidentally, the Harvard Economics Department and the Harvard Law School are just across a parking lot from each other. They share that parking lot, so we’re really very close.

I think it was 1984, 1985, I dropped out of law school and got the job with the Harvard Economics Department. So I literally moved from one side of the parking lot where I was a student, paying them tuition, the other side of the parking lot, where as an assistant professor, they were paying me a salary. And that seemed like kind of a good trade off.

I always thought maybe I’d go back and finish the law degree, but I never had any good reason to, I never really wanted to practice law.

Wolla: That’s great. So you’re at a party, right? And, you’re at a party where people don’t know you, which maybe doesn’t happen is often at this point in your career as it did before. But let’s just imagine this was the case. You’re having a conversation. Eventually someone asks, you know, what do you do for a living? Or you’re on an airplane and you happen to sit down and you strike up that conversation. How do you respond?

Mankiw: Well, I usually just say I’m a professor, but that always generates more questions because they’ll where do you teach? And of course they’ve always heard of Harvard. There’s always something going on at Harvard. It’s always in the news in some way. People ask about that or they’ll say, oh, what do you teach that? I’ll say I teach economics, and they’ll have questions about economics and the economy. And what do I think about, you know, what’s going to happen to interest rates or something like that. It’s almost always a macro question. I mean,  I’ve taught both micro and macro with some reason at the cocktail parties, it’s always a macro question that they ask about.

And I’ve always happy to talk about, talk about what I do. I’m actually quite proud of being a professor. I think it’s actually a noble profession. So I never feel shy to admit it. Sometimes I’m a little more reluctant to mention Harvard because people somehow think it’s more different from other universities that it really is. It has this image in the, in the public mind, that’s sort of outsized of what it really is. I was always very… I’m always been very proud of sort of what I do for a living.

Wolla: So what are the two most important things that you want your students to learn and retain? So when they finish their introductory course, if you could choose two things that they, you know, take out in the world, you know, from your class, what would they be?

Mankiw: I think it’s just the two big ideas are market success and market failure. I mean, I think the first idea, well, I really hit home a lot on this is that unfettered markets do miraculous things. You might think that unfettered markets are a recipe for disaster, right? A bunch of people who are completely self-interested, they’re out there looking after themselves, and it seems like you need somebody to come in and direct these children do it doesn’t lead to chaos. But we’ve known since Adam Smith, that that’s not true, that under certain conditions, markets can lead to desirable outcomes and along certain dimensions, this whole idea of market efficiency. And I think explaining that is the first thought that I want students to come away with.

The second is, okay, why don’t markets do everything there? There’s market failures. There’s things like the externalities, things like market power that’s going to lead markets to be inefficient. There’s concerns about inequality, that even outcomes are efficient, that doesn’t mean they’re equitable from all perspectives. So, understanding, you know, what the markets can do, what you can trust markets do right. And we when markets need intervention and what kind of interventions they probably need. That I think is sort of the big theme of the course. It’s mainly a micro idea but also runs through macro as well, thinking about sort of stabilization policy as an example of an intervention needed, because of a market failure. You can think of the recessions as some sort of market failure on a grand scale. And so Keynesian economics, I think, is, is part of the idea of market failure. So that’s really what I want students to come away with. This is that central duality of economics, market success and market failure.

Wolla: So, in, teaching the introductory courses, right, you get 18-year-olds who may or may not have ever had economics. They may or may not read newspapers that present, you know, economics in a fair way. What kind of misconceptions do you find that students bring into that classroom? And how do you try to address that?

Mankiw: Yeah, I mean, I think the biggest misconception is economics is just about people want to make money. I think they come in thinking, oh, I’m not interested economics, because that’s where people are going to go into finance or consulting. And the truth is, we have a lot of econ majors that go into finance and consulting. So it’s not a completely unreasonable misconception, but it is a misconception.

It’s not just about making money. It’s a useful framework for people who want to make money. But I really like the definition of economics from Alfred Marshall. He said, economics is the study of mankind to the ordinary business of life. And if you’re interested in sort of mankind. If you’re interested in how people live their lives, then economics is for you.

So I try to encourage my students to think broadly that in economics, if you want to gauge the ordinary business of life, economics is a pretty good thing to study regardless of what it is, how you would engage in the ordinary business of life.

Wolla: That that’s a great way to think about it. Your Principles of Economics textbook, which is also, you know, expresses a lot of great ideas about ordinary business of life. Right? It’s one of the most popular textbooks in the country, and it has been since it was first published in 1997. In fact, the economists had this to say about the first edition of your textbook.

“You know, Mr. Mankiw has produced something long overdue, an accessible introduction to modern economics by writing more in the style of a magazine than a stodgy textbook, and explaining even complex ideas in an intuitive, concise way. He will be few students bored bewildered.”

High praise from The Economist magazine. Was that your intent on writing the book, explaining complex ideas in this intuitive, concise way, and also being evenhanded in the process?

Mankiw: Yeah, that was exactly what I was trying to do. I I’ve always liked writing for broad audiences. Now, when I write research papers for in journals, obviousl I’m writing for other economics professors, by and large. But even when I do that, I try to think, okay, well, can I write this in a way so somebody can put it on a syllabus for a course?

So somebody who is not a professor yet, but was training to be a professor, will be able to understand it. So I even when I write research papers I try to write for broad audiences. But beyond that,  throughout my life I’ve written non-technical things. When I was at Princeton, I was actually I wrote for the student newspaper. During my professional career, I was, I was a for a while as a regular columnist at Fortune magazine.

Actually, Paul Krugman and I would alternate issues. He would have very other issues, I had the odd issue. And then for about a dozen years or so I wrote regularly for the New York Times Sunday business section. So I’ve always been interested in reaching to a broad audience. And that’s kind of what writing an economics textbook, especially principles textbook, is about, because most of your readers know nothing about economics. And so what they do know may be a misconception. They may have read the newspaper and gotten misconstrued what economics is. So you’re always starting with people at ground zero. And I really did very much kept, that in mind. You know, people, when they write have to keep an audience member in mind, like, who is the typical person you’re writing for?

And the typical person I always kept in mind was my mother. My mother did not go to college. She was a hairdresser, but she was always interested in economic things. Even in her 80s and 90s, she would sit in her in her rocking chair and watch CNBC. She was always interested in sort of what’s going on out of the economy.

And so I kept think[ing] of it. Would Mom find it interesting? Would Mom understand this? So I kept her in mind as someone who was curious but had no background at all.

Wolla: Yeah, that that’s a great framework. I have to ask. So you’ve made a few appearances on CNBC. Was your mom ever watching when you…?

Mankiw: Oh, she’s passed away now. But when she was alive before, on my way to the studio, I would always call her and say, I’m going to be on CNBC. She would watch. She’s my biggest fan.

Wolla: That’s great, I love it. One of the features of your book that I really like is the Ten Principles. What was your goal in starting your book of the Ten Principles? But also, how did you go about, like, boiling introductory economics into those particular ten ideas?

Mankiw: Yeah, I should note that it was not original to me. I think if you go back to Baumol and Blinder, they had something like I think it was seven ideas for the final exam. So they had something similar. It’s just something along that line. I remember at the time thinking, what should I call this? And I said, oh, the book is called Principles of Economics. Let’s say ten principles here. There’s no magic to the number ten. I basically just sort of sat down and tried to boil it down to the simplest words possible. You know, there’s a competing textbook I won’t mention. I don’t want to not only mention the name, but they start out there. They say they have three big principles, and their big principles are optimization, equilibrium and empiricism. Those are the three big principles, which is another organization principle. I remember when I saw that optimization, equilibrium and empiricism. I said, my gosh, those are five syllable words. I try to completely avoid any word as long as that if I can avoid it and saying, oh, well, it’s hold down the three five syllable words, and fairly abstract words. You know, for me it’s like people face tradeoffs. That’s one of the that’s principle number one, I think. And the second one is the cost of something is what you give up to get it. You notice those principles. They’re all like one syllable words. And I really so I try to really boil it down to really the simplest possible writing. I didn’t have any magic process for doing it. I just kind of sit there and say, okay, I know a lot of economics. I’ve been doing this for quite a few years now. What do I think is the foundation. I’m just going to sit down to write them. I didn’t feel like I went through multiple drafts. I just kind of did it. And they’ve been pretty stable, I think. I think completely stable for all editions. I’m working the 11th edition right now, the Principles book. And so that’s always fun.

Wolla: We’re going to take a quick break. And when we come back, Professor Mankiw, we’ll talk about his approach to working with students and what he loves most about teaching introductory economics.

Mike Kaiman: Hi. I’m Mike Kaiman, an economic education specialist here at the St. Louis Fed. I wanted to briefly cut in and give a quick shout out to all of our teacher friends who are listening out there. If you’re anything like me, this conversation has you feeling pretty excited about the idea. Bringing more econ into your classroom. But it’s not like you don’t have a bunch of other stuff going on.

Trust me. We get it. That’s why we created Page One Economics®. Each issue covers a current economic topic explaining key concepts without the jargon. Your students will see the economics behind the headlines without having to feel like they need to be an economist to understand it. Each issue is aligned with national standards and includes an assessment that’s easy to use. You can find Page One Economics at stlouisfed.org under Resources for teachers and students.

And while you’re at it, subscribe to our newsletter. We’ll keep you up to date on new resources and upcoming events. Thanks for all that you do to enrich the lives of your students. All right, let’s get back to this awesome conversation.

Wolla: Welcome back to Teach Economics and my conversation with Professor Greg Mankiw. Professor Mankiw has written lots of papers that have influenced the economics profession. One of my favorites is called The Trade Off Between Nuance and Clarity, which suggests giving students an economic approach to understanding the world is better than having them memorize models and conclusions. And Professor Mankiw says that’s important to keep in mind that for many students, the most valuable lesson won’t necessarily be how to do math like an economist, but how to think like one.

Mankiw: I keep in mind that these students are not going to become professional economists. Most of them are not even going to major in economics. Maybe they will only take one course in economics and then they’re going to go off to major in biology or English literature or something else. And so the question is for that student, what can you leave them with?

They’re probably going to forget the specific models. And you hope they don’t. But realistically the world’s the most complicated life because they’re probably going to forget the specific models, but they’re going to probably understand the world view, the perspective that they’re getting. And that, I think, is really what we’re trying to ultimately leave them with.

And, in my view, there is the sort of tradeoff between nuance and clarity. And I think it’s important not to start off with too much nuance, because if you start off with too much nuance it’s too complex and you lose the students, and then once they’re gone, they’re gone. It’s hard to get them back.

So I err on the side early on of trying to keep things really simple. That’s what the whole idea of ten principles in chapter one is. The book then goes on and adds more nuanced. Let’s explain these principles and sort of see where they how they apply and why we think they apply. And what do we think they don’t apply. But that that nuance comes later in the ten principles, is introduced in the first part of a 15 pages of the book, the book’s 800 pages long. So there’s a lot of nuance that comes later, a lot of pages to come. But I think the key thing is to not lose the students too early.

Wolla: So I like the way you ended this paper you wrote as an instructor of introductory economics and as a textbook writer. I view myself as an ambassador for the economics profession. What advice would you give to other ambassadors of the economics profession?

Mankiw: Yeah, the reason I like the metaphor ambassadors is ambassadors are not representing themselves. They’re representing a broader constituency ,like the nation that they come from, maybe the president that appointed them, but probably more broadly the nation that they’re representing. And so as I, you, walk into the classroom, you’re kind of the ambassador from the American Economic Association to this particular country of 18-year-olds that you have in front of you.

And what does an ambassador do? An ambassador may have personal views. You have personal idiosyncrasies, but the ambassador doesn’t allow those idiosyncrasies to be expressed. The ambassador’s there to say, you know, my country believes this, and these are the interests of my country. And so I think what instructors need to do is suppress their own idiosyncrasies when they walk into a classroom, especially a principal’s classroom.

If you’re teaching more advanced class, it’s more reflective. That’s fine. Students are sort of opting for the elective. Being a little idiosyncratic there is fine. But when you walk into a classroom that people are going to take only one economics course, and you are basically representing the economics pressure for these students and probably the only economist they’re going to ever see in their life, maybe, you need to sort of be faithful to the people you’re representing.

So rather than saying, you know, the I don’t hear you say, I don’t like Keynesian economics, I’m not going to talk about anything Keynes said. Well, that’s probably not fair, there’s a lot of Keynesian economists of the world indicators. You might say, I don’t agree with all these ideas, but it’s explaining faithfully the ideas of Keynes is right.

Similarly, if you don’t believe that markets are very efficient. But, you know, Adam Smith’s invisible hand is a pretty powerful idea. It motivated economists from Adam Smith all the way to, you know, Milton Friedman of the 20th century, the more modern, more free market economist. So explaining that idea fatefully, I think is important. There’s a temptation for lots of people to overestimate the importance of their own research.And I think that is often a mistake that people fall prey to because they think, oh, this research is so important. And I think maybe that it tends to make them less effective ambassadors, than they otherwise would be.

Wolla: So economics competes with a lot of other disciplines for space in the curriculum, especially at the K-12 level. So why do you think, or do you think, it’s important to start teaching economics early and why?

Mankiw: Yeah, I do think it’s important to teach economics early on. I think the first year of college is probably too late. Mainly because, you know, a lot of people don’t go to college, but those people become voters anyway. And even so, people go to college, don’t take economics courses. I’m guessing something like, you know, two or three future, future voters want to take an economics course in their life.

So when would I like to see economics. I’d like to see economics at the high school level. In particular, I think what we now call principles of economics could be taught in 11th or 12th grade. The math it uses is not math more advanced than what they would have seen in ninth grade algebra? There’s nothing would stop high schools from teaching development to 12th graders.

Wolla: I agree, as you think about your past experience teaching, what’s been the most, enjoyable part for you about teaching, especially those introductory level[s]?

Mankiw: Well, I really enjoy getting to know the students and engaging with them one on one. I mean, the lectures, you know, standing up to people and giving a lecture is an important part of the process. What I personally find most rewarding is just getting to talk to the students and interact with them. So, you know, I taught the, 700-person introductory course, I would run office hours. And the way I would run them is I would say, here, I’m going to have office hours at these times. And rather than meeting students one on one, I would say whoever shows up can come into my office. And so I have a reasonably large office, I can easily fit 15 students in the office, and so a bunch of students would come in and we’d have a discussion.

I said, if you want to see me one on one? That’s fine. You know, email me or set up an appointment separately. But for the office hours, I’ll let everybody who shows up in. And so I would then it would turn into a small seminar or whatever students want to talk about. And so that was, to me, the most fun part of teaching a large course was the interactions in the small group setting.

Wolla: That’s that’s really great. And, I would have loved or would love, you know, to be a student in your class and to have some of those discussions, any words that you want to share with fellow economic educators? Or maybe there’s, you know, someone who’s finishing a degree in economics.

Mankiw: Well, the main thing I want to say to economics educators is to thank them for what they do, because I think economics education is so tremendously important for society overall. You know, economists do a whole variety of things. And I think one of the things I love about economics is there’s lots of different kinds of economists. This being a Washington economist, as a research economist, this kind of more focused on teaching.

And throughout my career I’ve done a little bit of everything. And I’ve enjoyed that diversification. Research by its nature is a very slow process. The accumulation of economic knowledge is very slow. I remember when I first realized that I became quite disappointed. Because as a student I learned all this economics. It seemed like, my gosh, every week I was learning something new and fascinating and exciting. And then when you kind of learned the accumulated stock of knowledge and you get to the research frontier, you realize that stock of knowledge advances very slowly. And so I think we do accumulate more economic knowledge over time. But the research frontier was slowly.

What teachers do is they basically say we have a stock of knowledge that’s been accumulated since Adam Smith. And most people don’t have that. And I’m going to take this, you know, 250 years of accumulated wisdom and try to boil it down and pass it on to the next generation. And that is such an important thing to do for making a successful and vibrant society. And I really want to thank all the teachers who spend their lives doing that, because I think they’re doing a great thing, for the world.

Wolla: Well, and, I’ll kind of return that to you and say thank you for all that you’ve done for your students and for the profession and for the care that you put into your teaching. I do want to thank you for spending time with me today, and thank you for your contribution to economic education.

Mankiw: Well thank you. It’s been a delight to talk to you. Thank you for the opportunity.

Wolla: You’ve been listening to our conversation with economics professor Greg Mankiw from Harvard University. And if you like the show, tell all your friends and be sure to subscribe on your favorite podcast app. I’m Scott Waller, economic education officer at the St. Louis Fed and from the St. Louis Fed. You’ve been listening to Teach Economics.