A little perverse don't you think? I mean we need to teach students about the fallacy of composition in macro but this will only be possible if we are first taught to think in this fallacious way ourselves-so let's keep micro first.l. This is the best reason to teach micro first?
"I thought Noah Smith's post on why we should teach intro micro before intro macro was very good. I agree with Noah: even though macro is much more glamorous, micro is just as useful and important, and we are more confident that micro works. (Read his post for the full story.)"
"I thought Noah Smith's post on why we should teach intro micro before intro macro was very good. I agree with Noah: even though macro is much more glamorous, micro is just as useful and important, and we are more confident that micro works. (Read his post for the full story.)"
"I want to add a couple of points in support of Noah, then talk about what I think is a bigger issue: the splitting of micro and macro into two separate half courses. I'm against splittism, but it's getting harder and harder to fight off the separatist forces.
"Unlike Noah, who's just a young guy (judging from his photo), I speak from the vast authority of having taught intro (both micro and macro) about 30 times. So listen up, you kids."
"Here are my couple of (related) points in support of Noah:"
"1. One of the most important things we teach in macro is the fallacy of composition. What is true of each of the parts isn't necessarily true of the whole. Just because the supply curves for apples, bananas, and carrots are all non-vertical does not mean the aggregate supply curve is non-vertical. The reasons the aggregate demand curve slopes down (if it does) are different from the reasons the demand curves for apples, bananas, and carrots slope down (except in a small open economy with a fixed exchange rate where it's basically the same reason). We can't just add up the supply and demand curves, because the things we are holding constant when we draw the curves for apples (like the price of bananas) are changing when we move along the curves for bananas. Each of those curves holds income constant, but income is changing as we move along the AD and AS curves."
"If they didn't already understand micro, they wouldn't be able to understand what it means to add up micro to get macro. We wouldn't be able to properly teach the fallacy of composition."
"2. The biggest of all macro questions is this: if you add up all the micro bits properly, so you avoid the fallacy of composition, why the hell does it seem not to work at the macro level? Or only work in the long run? (Or maybe it does work, if you are an RBC theorist who is determined to make it work?) It would be like if Newtonian mechanics worked OK for each individual car, but failed to work OK when you put a lot of cars together on a highway system."
"If they didn't already understand micro, they wouldn't be able to understand that we have an empirical problem when we correctly (avoiding the fallacy of composition) add up micro to get macro. We wouldn't be able to properly teach the big macro problem of the trade cycle."
It's as if we need to learn the erroneous ideas of micro first then macro is able to show is why they're errors. Yet wasn't there a time when micro didn't precede macro? There was actually, right after WWII during the initial Samuelon-Hicks IS-LM era. It was hardly true that macro was hobbled then. Maybe we should teach the Ptolemaic version of the universe first than teach Galileo and Copernicus after?
Nick is also very opposed to the idea of splitting macro and micro up-not a surprise, if you believe as he does that we must learn micro's methodological individualism first then take macro to learn why it's erroneous then obviously splitting them up is unthinkable. For those who do think this is what we should do-take heart. Nick himself seems to think this is inevitable
"But I don't like the idea of splitting micro and macro into two half courses. It's just wrong. And it's wrong both ways, so simply making micro a pre-requisite for macro isn't the solution. Just as students can't understand macro without first understanding micro, they can't really appreciate micro without seeing where it fits into (or doesn't fit into) the big macro picture. (In that sense, I accept that the macro-first people do have a point.) I don't want to let any student out into the world until they have some idea of both micro and macro. They just do not have an introduction to either micro or macro unless they have seen the other side of the picture too, so they can understand how inadequate it is to see only one side of the picture. A little learning is, sometimes, a dangerous thing.
"But I know I am fighting a lonely rearguard action to slow down the forces of progress and commonsense and what's best for students. They know I will retire soon, and will then do the sensible thing."
I like Nick and if he retires I hope he'll still blog. However, I don't think if he's right about where things are going this is such a bad thing. My real complaint is that curently economics prioritizes micro-and perhaps the groundwork for this is laid by teaching micro first. This ordering is not just priority in time but also in principle. After all, the current DSGE consensus is that micro always trumps macro-that macro has to prove any claim it makes in micro terms-'microfoundations.' Indeed, if Stephen Williamson has been wrong in the recent controversy I wasn't necessarily a fan of how Krugman went about showing it-by complaining his model was 'ad hoc' and lacked proper MF. I thought Krugman was for the IS-LM?
I think Nick inadvertently touches on something significant here:
" I think it's correct to say that most teachers of intro, and most authors of intro textbooks, are more macroeconomists than microeconomists. Macroeconomists are more comfortable teaching basic micro than microeconomists are teaching basic macro. I think that tells us something important, though I'm not sure what."
It suggests what I've argued: microeconomics is by definition pre-Keynesian economics and macro is Keynesian econ by definition. Not surprising that pre-Keynesian economists don't like to teach Keynesian economists don't mind teaching pre-Keynesian economics. Nick hits on it with his rather perverse explanation for why micro should precede macro-because macro points out all the errors of fallacy of composition and methodological individualism, etc.
To the extent that you still believe pre-Keynesian economics is right how do you even go about teaching Keynesian econ?
P.S. I see that Nick answered a comment I made over at Noahpinion-where Noah gave his reason for teaching micro first-I found his theory even worse: that we have to teach what works first(!) Really micro 'works?' Nick was closer in admitting that it doesn't work so well but is full of erroneous ideas-but is wrong that this somehow means we should privilege micro's errors.
He claims that there was macro prior to Keynes:
"They just didn't call it "macro". They called it the theory of money and the trade cycle. And they didn't need GDP data to tell them there was a slowdown in trade. (Though better data helped, of course.)"
I don't quite buy this. Keynes certainly revolutionized economics and I don't agree that pre-Keynesian trade cycle theory was quite macroeconomics. Mitlon Friedman himself admitted to this when he said 'We are all Keynesains now.' The modern BLS and all the economic numbers that the government published are directly attributable to Keynes. We had no such statistics prior to Keynes.
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