Macroeconomics: An Introduction, by Alex Thomas (Pt. 1)

About five years ago, I went on a rant on my other blog:

I have developed, over the last seven years or so, a visceral hatred for textbooks. Its not that textbooks are all that bad – they’re limited, they’re expensive and they’re straitjacketed in terms of content and structure, but all of this together isn’t why I hate textbooks.
Its because we have students who demand a textbook in every single course. Over time, we have reached a mentality that says that a course must have a recommended textbook. Instructor must assign chapters from said textbook. Students must read chapters and solve end-of-chapter problems. Instructor will design paper on basis of said textbooks, students will write exam having prepared accordingly, and all is right with the world.

https://thepuneri.wordpress.com/2016/03/28/textbooks-have-become-mostly-pointless/

I’m not going to excerpt the entire rant, but on reflection, it is certainly true that I was on a roll:

And it gets even worse with the “end of chapter problems”. The expectation that the examination will have the same “type” of problems as does the textbook might be convenient in the short run, but it doesn’t teach you how to adapt to problems as you might encounter them in real life. Worse, and this is a point I’m going to write about at length in my next post, this approach simply helps you solve problems, not identify them. And in my opinion, identifying problems is a far more important skill today than having the ability to solve them – but more about that in a later post.
In short, then: textbooks are static, limited and structured ways to learn about a subject, and it is entirely possible, and desirable, that we enrich students knowledge about subjects by giving them much, much more to learn than just a textbook.

https://thepuneri.wordpress.com/2016/03/28/textbooks-have-become-mostly-pointless/

Five years down the line, my opinion on textbooks haven’t changed all that much. I still cringe when students in courses I am teaching ask me for “a” recommended textbook to “prepare for the examination”.

They’re being quite rational from their perspective: they want to maximize marks while minimizing effort. Their microeconomics professor would be proud. My problem lies beyond their request, and beyond their rationality in having framed their request the way they have. They are simply responding to the environment we’ve placed them in, and it is the environment that I have (serious) issues with.

And the textbook authors are responding to their incentives, in turn. If we accept the educational system as it currently exists, then of course we should have chapters, and end-of-chapter problems, and question banks, and answer keys supplied to accredited professors. It has become an industrial complex, for all the participants respond, rationally, to the incentives the educational system has set up for them.

And so it goes, year after dreary year.


And then you see something like this in the introduction of a text:

I strongly recommend and encourage the use of various texts (books, journal articles, government reports, fiction, newspaper articles and textbooks) in the teaching of any course in economics. This stems from my rather modest experience of just over 15 years as a student and teacher of economics. While the use of varied texts is challenging for both the teacher and the student, I firmly believe that the long-term benefits far outweigh the short-term costs, and that it truly contributes to good learning as it enables the students to become better arbiters of knowledge. After all, we live in the age of information abundance, and perhaps the most valuable skills are the ability to identify credible sources of information and the ability to evaluate, with sufficient confidence, contending arguments, perspectives and standpoints.

Preface, Macroeconomics: An Introduction, by Alex M. Thomas

In other words, this is a textbook that is not looking to minimize the efforts of either the teacher or the student. The very opposite, in fact. As Alex says, he is looking to maximize the long term benefits (one might call this “learning”). Not the short term benefits, note (one might call this “marks”).

And it gets better!

Finally, this book adopts a problem-setting approach rather than a problem-solving one, as is the case with most economics textbooks. To put it more clearly, this text helps you to identify, conceptualise and discipline a macroeconomic problem. Therefore, this book does not contain exercises in problem solving, but it contains discussions and questions that make you think about the nature of assumptions, the logic of the theory, the limits of the theory, the interface between theory and policy, a little bit about the gaps between theory and data, and, occasionally, the nature of past and present economic thought. Therefore, this book aims to provide you with an introductory) immersive experience in macroeconomics.

Preface, Macroeconomics: An Introduction, by Alex M. Thomas

Why do I say it gets better? From another of my blogposts, also written five years ago:

In examinations, teachers frame the questions, and students answer them.
So obvious, so matter of course, so banal is this statement that it takes a little time to realize how horrible a system this is. All we’re doing, when we ask students to do this, is learn the subject well enough to be able to answer whatever question we throw at them. And therefore, when they get out there in, y’know, the real world, they ask for a problem, so that they may solve it.
But in the real world, more often than not, you’re paid to frame the question.

https://thepuneri.wordpress.com/2016/03/30/the-growing-irrelevance-of-examinations/

I’m happy to spell this out as many times as it takes: you attend a course in order to learn. A way to check how much you’ve learnt is to write an examination.

Somewhere along the way, this has mutated into: you attend a course in order to score marks in an examination so that you get a job/get into a better college.

Jo kuch ratta maara tha, sab saala pel ke aa gaya, aur doosre din bhool gaya” is funny because it’s true.

So, in a standardized, run of the mill course, this textbook is a nightmare. No end of chapter problems, no question bank, and (the horror!) literary references and (shudder!) poems instead.


Which, of course, is exactly why I can’t wait to read it. I’m done with the first chapter, and will put up my thoughts about it soon. There’s a lot that I love about it, some things that I have questions about, and some areas of disagreements.

But if I’ve understood the spirit in which the book has been written, I think Alex M. Thomas will count my experience thus far as a success.

Links for 3rd May, 2019

  1. “So in the end what we get for policy to decide is whether the Indian aviation business should comprise large, medium or small oligopolies. If resolved sensibly it yields a solution to the problem of cross-subsidisation: the larger the number of firms, the greater will be the need for intra-firm cross-subsidisation as firms focus on a variant of the Ramsey Rule which says that network firms must maximise revenue instead of profits.This is best achieved via a public monopoly which far from reducing output, raising prices and making excessive profits as monopolies are expected to, can do the opposite just as Air India and Indian Railways do. In short, if we want to avoid a return to public sector transport monopolies, we must decide on the size of the oligopolies in the sector.”
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    A very short article, but an immensely interesting one, talking about airlines, India, monopoly, oligopolies, and regulation and policy in India.
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  2. “All that said, zero is still the best price. I think it’s appropriate for foundations or other funding sources to support a multiplicity of free textbook options. (I’m not looking at you, Bill Gates.) INET has done this with its CORE project, but no one else. I don’t think funding is the whole story, however. Economics needs to regard pedagogy as one of its central missions. This is not only a matter of having more panels about it at the national meetings; there needs to be more disciplinary reward for putting one’s time and energy into the development of strategies and materials for the classroom. This means promotion, prizes and esteem, and it would require a substantial cultural shift. Where to begin? I suspect we have a vicious circle that could well become virtuous. Today we have a bleak landscape of minimal innovation in pedagogy and little institutional recognition for those who do this work. In a world well-populated with innovative experiments in teaching and learning, it would be natural to reward the most successful or even just provocative projects. So again the next step seems to belong to the funders.”
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    A fairly interesting take on textbooks (econ textbooks, to be clear), what they cover, what they should cover, and what the price should be. Meta, but out of necessity.
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  3. “We find that the probability of seeing an outcome within 180 days from the date of admission is less than 5%. However, it picks up once the 180 day deadline is passed. Within 270 days, the chances of case closure are between 10 to 30% depending on the bench and case characteristics (e.g., creditor type). We observe high closure rate just past the 270 day period. Within 360 days of admission, the probability of seeing an outcome is significantly higher (30 to 70%). Quicker outcomes (liquidation or resolution) are observed for resolution proceedings triggered by the debtors themselves. Similarly, proceedings triggered before some benches result in resolutions speedier than those before some others.”
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    On the impact of the IBC on dealing with bankruptcies in India. Visit the link to find a link to a fairly good data-set pertaining to the issue being discussed.
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  4. “So buying shares of an IPO could be rational or irrational depending on your time horizon…and how lucky you are with what happens on the first day of trading.”
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    An interesting analysis on IPO’s and why they tend to be oversubscribed. Fairly well known, I’d say, if you’re a student of finance – but interesting nonetheless.
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  5. “The estimated cost of NYAY is substantial – Rs. 3.6 trillion a year. It would be broadly six times what has been allocated to MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) in the interim budget presented in February 2019. It is also nearly 13% of total central government expenditure for the fiscal year 2020. It is hard to see how such a large incremental spending programme can be funded through cuts in other expenditure items alone, including non-merit subsidies. That will be a very difficult political economy call, given that non-merit subsidies mostly benefit vocal interest groups. There thus has to be either fiscal expansion or an increase in tax collections. The latter could – but need not – entail higher tax rates. India could be at an inflection point at which its tax-GDP (gross domestic product) ratio begins to grow rapidly, but that is a guess rather than a hard fact. In short, there is ample reason to worry about the fiscal burden of NYAY. ”
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    Niranjan Rajadhakshya on the economic feasibility of NYAY. Students of public finance especially should read this to get a sense of how to judge questions such as the ones put forth in the interview.