Posted on 12/30/2024 5:10:55 AM PST by karpov
The economics major is in dire straits. Across the nation, econ curricula aren’t instilling an appreciation for, or even a familiarity with, the economic way of thinking. Theory classes limit the power of economic analysis by reducing markets to sterile exercises in “perfect competition,” or else subordinating social science to social control by obsessing over “market failures.” Empirical classes equip students with sophisticated statistical tools but at the cost of reducing applied economics to data-mongering.
The unfortunate result is that econ majors are almost always half-educated and quarter-lettered. They can memorize models and run regressions. They will confidently make pronouncements about the necessity of corrective taxes and regulations to promote economic efficiency. But they’re unable to explain why popcorn costs so much at the movies, how we know high oil prices aren’t the result of price-gouging, or—most worrying of all—what makes some countries rich and others poor. The situation is grim.
Yet it’s not hopeless. All the materials that professors need to train economists well are already available. There are many ways to restructure curricula to produce competent economic reasoners. All of them require wide reading and deep thinking. Students whose attention spans run out at 280 characters have no place in an economics program.
Whatever the texts and series of classes, a serious economics program should graduate only those students who demonstrate proficiency in each of the following areas:
The nature and scope of economics. Economics is defined not by what behaviors it studies but how it studies those behaviors. The economic way of thinking begins with purposiveness: All action is an attempt to improve self-perceived wellbeing. Furthermore, to act means to choose, which means tradeoffs are unavoidable. Purposiveness is essentially related to economization. Rationality and scarcity are flip sides of the same coin.
(Excerpt) Read more at jamesgmartin.center ...
That daddy and mommy won’t always pay their bills?
Dismal fake science bump.
One of my friends has a PhD in economics and had never even heard of futures and options, had no idea how the commodities market works. He does understand the stock market, but not the futures and options aspect of it.
It is obvious "journalists" have the same lack of knowledge.
Commodity traders, buying and selling puts and calls, betting on a commodity going up or down in price are much of what controls the price of popcorn and fuel, etc.
400 questions
And 1000 answers.
Excellent observations.
A year of principles of accounting and a year of introductory finance would be an important and critical component of an economics program.
The first thing economics majors should learn is that self-determinism, socioeconomic mobility, and purpose are required for human happiness, and that Marxism and socialism are antithetical to those requirements.
They need to learn:
Supply and Demand
The laffer curve
and pay their own bills.
Those three things are all you need to know about economics.
I don’t know much about economics, but I know a lot more about it than most Democrats because I understand supply and demand.
As an economics major, I learned:
1. When Supply exceeds demand, prices go down.
2. When demand exceeds supply, prices go up.
3. When supply and demand are in equilibrium, prices are stable.
Options and futures are grease for price discovery.
All well and good for people who play in that space.
For long term investors like me, they are largely irrelevant. They keep prices real on a daily basis, but don’t affect the 20-30 year time horizons over which I invest.
“Students whose attention spans run out at 280 characters have no place in an economics program.”
The article makes a good point, but this line seems like a subtle dig at Musk and Twitter users, as the maximum size of Tweets is 280 characters. I think paid users are not limited to this number.
Musk has a degree in economics and seems to have a pretty good handle on money matters.
Being able to summarize and make a point briefly is a lost art.
“I apologize for such a long letter; I did not have time to write a short one.”
—Blaise Pascal
I taught undergraduate maco and micro economics for more than a decade and am in total agreement that many students either are not taught nor come to understand basic economic principles like supply and demand, scarcity and economic growth. There are some great resources I used in my classes to help students understand these principles.
Commanding Heights... episode 1, a video series on economics from the University of Chicago. Available from various online sources
Basic Economics by Thomas Sowell, an easy to read book that gives a great discussion of basic economics
Economics, McConnel & Brue ..
a text book I used in my classes. Available as a used textbook
Uncle Milty, options are not for price discovery. Options are for price stability. Corporations want to know what price they are going to pay for a commodity the next year, the next week, the next two years... And they don’t care if they have to pay extra for an option to get this, they are more interested in a stable price and a cheap variable price.
Southwest Airlines figure this out if your years ago when they locked in aviation fuel for the next 2 to 5 years, I can’t remember.
And while all the other carriers were struggling with high fuel prices, Southwest airline was raking in the profits because they had an option to buy the cheap fuel. And when the price went up for all the other airlines, Southwest airlines was still paying that low price. That is the reason for options, for price stability in the supply chain.
Far from it. They need to know politics and history because economics cannot be separated from either of them.
You’re talking commodity options, I was talking stock options. Perhaps we’re both right.
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