I think of my doctoral training (Claremont 1979-84) as Virginia-influenced but I read more than half of this list. Dan Vandermeulen taught the entire micro sequence using linear programming and set theory. I’ll have to look back at Hartley’s list to compare whether I got more MIT than Chicago.
My BA in Econ from UC Santa Cruz required no reading from any of these canons. Did anyone have required reading from these canons for their BA in econ?
In order to graduate from any humanities department one should be required to read at least three from the Chicago or Austrian School canon. All in favor?
Many of the basic ideas in these canon can be taught in K-12? Who's going to start an outline for that curriculum? Who's going to start the Substack providing basic lessons in econ for K-12?
Yes, it could start in Kindergarten with lemonade-stand economics. Profit = Revenue - Cost. Define each of the terms and understand how they are related.
Discuss how to differentiate your product to obtain greater profit. What happens if all the children sell the same products at their lemonade stands? How does it affect the price?
One could introduce the marginal cost of another glass of lemonade along with the concept of overhead.
Introduce the concept of taxes and regulation. Easy for kids to understand if you were to put in words they can relate with and use in their real life.
Each year the concepts would grow in sophisticating until AP econ which would be taught in 9th grade possibly given the students have a solid grasp of algebra.
I don't think you can stop at 1980 and call it a MIT canon. That was when all the freshwater DSGE Macro started surging. I think of MIT as the faculty most consciously standing against that trend. As a result (or maybe the causality runs both ways) it filled the Council of Economic Advisors (see e.g. the Svorencik paper for evidence) and also dominated the senior staff of the Reserve Bank of Australia for a generation. Look at the work of Caballero and coauthors for example to see that this tradition lives on. Maybe your skepticism about macro theory has some of the same roots! Thanks - Would be interested if this provokes further posts.
I was taught undergrad econ using Samuelson, whose obituary notes (U Chicago):
"Samuelson's Economics: An Introductory Analysis, first published in 1948, became the best-selling economics textbook of all time. The book popularized the perspective of British economist John Maynard Keynes "
As a practical econ thinking guy, I went for a Masters and Silicon Valley work rather than a PhD -- and it was clear that Econ was not really a "science".
In science, one can design and run experiments to falsify theories, and the power of True theories is that their predictions come true.
I don't see most econ predictions actually coming true, including my own of decades ago thinking that Japan's huge national debt would be a huge problem.
(This is also my critique of global warming, er, climate change -- predictions NOT coming true.) There should be more theory falsification.
Thanks, Arnold, for the 3 paper recommendation on MIT -- can you also suggest Chicago & Austrian?
Have you, or anybody here, read the 2022 Cochrane Fiscal Theory of Price Level full paper?
"the official Fiscal Theory of the Price Level is part of what I call 1990s macroeconomics, which I scorn. In the FTPL, as long as people think that the government will find a way to repay the debt without printing money, interest rates and inflation will remain tame. Ip’s article cites John Cochrane"
I read Samuelson’s “What Classical and Neoclassical Monetary Theory Really Was”. He is not exactly a scintillating writer. I am not a fan of “this model assumes this, that model assumes that” approach. I would prefer to start with a more historical/empirical approach—for instance, why does money exist? How did arise?
The tendency to treat money as something that takes special terminology I am suspicious of. Money is both an exchange good—something used in exchange—and an asset—something held for future use. That it so readily shifts between the two matters, but its use in either role is not terribly mysterious. Money economises on information (especially search) and does so usefully that folk continue to use it even when hyperinflation makes it the worst asset (“store of value”) by orders of magnitude. That an economy without money would be hugely smaller suggests that it is not “neutral”. Indeed, money arises to deal with scale of transactions beyond those that can be managed by personal connections, and then enables far more transactions not based on personal connections.
But why would we expect any good to be “neutral”? If it did not have some benefit, why would anyone use it? If it was absent, it would not be able to provide that benefit, which would then not be provided, unless there was some sufficiently close substitute. The “nominal versus real” terminology I therefore also have problems with. (I would replace ‘real’ with ‘output’.)
I've read five of the Chicago School Canon: Triumph of the City, Capitalism and Freedom, Free to Choose, Basic Econ and Nature of the Firm. Only two of the Austrian Canon: "That Which is Seen and That Which is Not Seen," and "Use of Knowledge in Society." None of the MIT Canon. Sorry Arnold. What's your recommended top three for MIT Canon?
Samuelson 1948 Solow 1956 Dornbusch 1976 these exemplify the MIT style of getting strong results from narrow mathematical models. Not a style that I endorse, but these are three of the best of the bunch.
I think of my doctoral training (Claremont 1979-84) as Virginia-influenced but I read more than half of this list. Dan Vandermeulen taught the entire micro sequence using linear programming and set theory. I’ll have to look back at Hartley’s list to compare whether I got more MIT than Chicago.
My BA in Econ from UC Santa Cruz required no reading from any of these canons. Did anyone have required reading from these canons for their BA in econ?
In order to graduate from any humanities department one should be required to read at least three from the Chicago or Austrian School canon. All in favor?
It seems like more of a grad school assignment but maybe your idea is better.
For some readings yes.
Many of the basic ideas in these canon can be taught in K-12? Who's going to start an outline for that curriculum? Who's going to start the Substack providing basic lessons in econ for K-12?
AP econ?
I'd think anything more general should be mostly personal money management but maybe some of this could be included.
Yes, it could start in Kindergarten with lemonade-stand economics. Profit = Revenue - Cost. Define each of the terms and understand how they are related.
Discuss how to differentiate your product to obtain greater profit. What happens if all the children sell the same products at their lemonade stands? How does it affect the price?
One could introduce the marginal cost of another glass of lemonade along with the concept of overhead.
Introduce the concept of taxes and regulation. Easy for kids to understand if you were to put in words they can relate with and use in their real life.
Each year the concepts would grow in sophisticating until AP econ which would be taught in 9th grade possibly given the students have a solid grasp of algebra.
Grades 10-12 could be college level econ.
How about we start writing the curriculum?
I don't think you can stop at 1980 and call it a MIT canon. That was when all the freshwater DSGE Macro started surging. I think of MIT as the faculty most consciously standing against that trend. As a result (or maybe the causality runs both ways) it filled the Council of Economic Advisors (see e.g. the Svorencik paper for evidence) and also dominated the senior staff of the Reserve Bank of Australia for a generation. Look at the work of Caballero and coauthors for example to see that this tradition lives on. Maybe your skepticism about macro theory has some of the same roots! Thanks - Would be interested if this provokes further posts.
I was taught undergrad econ using Samuelson, whose obituary notes (U Chicago):
"Samuelson's Economics: An Introductory Analysis, first published in 1948, became the best-selling economics textbook of all time. The book popularized the perspective of British economist John Maynard Keynes "
As a practical econ thinking guy, I went for a Masters and Silicon Valley work rather than a PhD -- and it was clear that Econ was not really a "science".
In science, one can design and run experiments to falsify theories, and the power of True theories is that their predictions come true.
I don't see most econ predictions actually coming true, including my own of decades ago thinking that Japan's huge national debt would be a huge problem.
(This is also my critique of global warming, er, climate change -- predictions NOT coming true.) There should be more theory falsification.
Thanks, Arnold, for the 3 paper recommendation on MIT -- can you also suggest Chicago & Austrian?
Have you, or anybody here, read the 2022 Cochrane Fiscal Theory of Price Level full paper?
There is some disagreement noted
https://arnoldkling.substack.com/p/the-fiscal-inflation-predicament?utm_source=publication-search
"the official Fiscal Theory of the Price Level is part of what I call 1990s macroeconomics, which I scorn. In the FTPL, as long as people think that the government will find a way to repay the debt without printing money, interest rates and inflation will remain tame. Ip’s article cites John Cochrane"
I read Samuelson’s “What Classical and Neoclassical Monetary Theory Really Was”. He is not exactly a scintillating writer. I am not a fan of “this model assumes this, that model assumes that” approach. I would prefer to start with a more historical/empirical approach—for instance, why does money exist? How did arise?
The tendency to treat money as something that takes special terminology I am suspicious of. Money is both an exchange good—something used in exchange—and an asset—something held for future use. That it so readily shifts between the two matters, but its use in either role is not terribly mysterious. Money economises on information (especially search) and does so usefully that folk continue to use it even when hyperinflation makes it the worst asset (“store of value”) by orders of magnitude. That an economy without money would be hugely smaller suggests that it is not “neutral”. Indeed, money arises to deal with scale of transactions beyond those that can be managed by personal connections, and then enables far more transactions not based on personal connections.
But why would we expect any good to be “neutral”? If it did not have some benefit, why would anyone use it? If it was absent, it would not be able to provide that benefit, which would then not be provided, unless there was some sufficiently close substitute. The “nominal versus real” terminology I therefore also have problems with. (I would replace ‘real’ with ‘output’.)
I've read five of the Chicago School Canon: Triumph of the City, Capitalism and Freedom, Free to Choose, Basic Econ and Nature of the Firm. Only two of the Austrian Canon: "That Which is Seen and That Which is Not Seen," and "Use of Knowledge in Society." None of the MIT Canon. Sorry Arnold. What's your recommended top three for MIT Canon?
Samuelson 1948 Solow 1956 Dornbusch 1976 these exemplify the MIT style of getting strong results from narrow mathematical models. Not a style that I endorse, but these are three of the best of the bunch.
"getting strong results from narrow mathematical models"
Yikes.