A note to instructors
The many ways to teach and learn from The Economy
The Economy has been classroom-tested in a variety of settings ranging from secondary schools to postgraduate courses. You can find out more about the many uses of the CORE material at www.core-econ.org.
Structured for flexibility
Several features make our text particularly flexible and adaptable.
Units 17 to 22 can be taught as standalone units at the end of a course, allowing a schedule that devotes additional time to topics of special student interest or instructor expertise. The topics of the capstone units have been addressed in earlier passages of the text, in most cases beginning with Unit 1. The capstone units make use of conceptual and empirical tools that have been developed in earlier units, so although they are modular with respect to each other, they cannot be taught unless the earlier material has been covered.
Cumulative learning of basic concepts
Units 1 to 16 provide cumulative learning of concepts and tools.
The topics of the capstone units appear throughout the entire 22 units so that instructors wishing to focus on the topics of one or more of the capstone topics can easily identify from the table of contents the sections that will be of special relevance to their students.
Themes and capstone units
Understanding how CORE’s The Economy is different
The text focuses throughout on evidence on the economy, from around the world, and from history. It is motivated by questions—how can we explain what we see? The method is to ask interesting questions first and then to introduce models that help to answer them. Standard tools such as constrained optimization are taught by showing how they give insight into real-world problems. Economics as a discipline is set in a social, political, and ethical context in which institutions matter.
CORE teaches students to be economists:
- Start with a question, and look at the evidence.
- Build a model that helps you understand what you see.
- Critically evaluate the model: does it provide insight into the question, and explain the evidence?
Figure A provides a way to understand the structure of the text by comparing it with standard principles textbooks.
|Standard principles text||CORE’s The Economy|
|Part 1. What is economics?||Unit 1. The big questions about the economy|
|Part 2. Supply and demand||Units 2–3. Economic decision making|
|Part 3. The production decision and factor markets||Units 4–6. Economic relationships and interactions|
|Part 4. Beyond perfect competition||Units 7–10. Markets|
|Part 5. Microeconomics and public policy||Units 11–12. Market dynamics, how markets work and don’t work|
|Part 6. Long-run growth||Units 13–15. The aggregate economy in the short and medium run|
|Part 7. Short-run fluctuations and stabilization policy||Unit 16. The aggregate economy in the long run|
|Part 8. Macroeconomic applications||Capstone units 17–22|
Looking more closely at the eight parts in the right hand side of Figure A, we summarize the central concepts in each unit.
- The economy
Unit 1 The big picture about how the global economy came to look as it does today.
- Economic decision making (a single actor)
Unit 2 Choosing a technology, given factor prices: Doing the best you can: incentives, innovation rents. Equilibrium.
Unit 3 Working hours: Doing the best you can within a feasible set: indifference curves, feasible frontier, MRS = MRT
- Economic relationships and interactions
Unit 4 Strategic interactions: Doing the best you can, given what others do: social dilemmas, self-interest, social interest, altruism, public goods, external effects
Unit 5 Bilateral trade: Doing the best you can, given what others do, and given the rules of the game: institutions, bargaining power, Pareto efficiency, fairness
Unit 6 Employment relationship: Doing the best you can, given what others do and the rules of the game, when contracts are incomplete
Unit 7 Firm producing a differentiated good, setting the price: Profit maximization (demand plus isoprofit curves); costs, competition, market failure
Unit 8 Supply and demand; price-taking and competitive markets: Prices as messages. Competitive equilibrium; price-taking firms and Pareto efficiency.
Unit 9 Labour market: From wage-setting (Unit 6) and price-setting (Unit 7) to the whole economy
Unit 10 Credit market: Consumption smoothing; borrowing and lending; incomplete contracts; money and banks
- Market dynamics, how markets work, or may not work
Unit 11 Rent-seeking, price-setting, and market dynamics: Rents and the achievement of short- and long-run equilibrium. Prices as messages. Bubbles. Non-clearing markets.
Unit 12 Markets, efficiency, and public policy: Property rights, incomplete contracts, externalities
- The aggregate economy in the short and medium run
Unit 13 Economic fluctuations and aggregate demand: Consumption-smoothing and its limits, investment volatility as a coordination problem, measuring the aggregate economy
Unit 14 Fiscal policy and employment: Components of aggregate demand, multiplier, demand shocks, government finance, fiscal policy
Unit 15 Monetary policy, unemployment, and inflation: Phillips curve, expectations and supply shocks, inflation targeting, transmission mechanisms, including exchange rate
- The aggregate economy in the long run
Unit 16 Technological change and employment: Aggregate production function and productivity growth. Job destruction and creation. Institutions and comparative economic performance.
- CORE’s capstone units: topic-focused applications of models
Unit 17 One hundred years of economic history from the Great Depression to the global financial crisis
Unit 18 Globalization—trade, migration and investment
Unit 19 Inequality
Unit 20 Environmental sustainability and collapse
Unit 21 Innovation, intellectual property, and the networked economy
Unit 22 Politics, economics, and public policy
Options for course structure
This book has been the basis of many different types of course. On our website, you can find case studies from instructors who have adapted The Economy to specific needs.
A first course (one year)
The Economy can be taught as a year-long first course in economics, as has been done with earlier versions of this material at University College London (UCL), Birkbeck, University of London, Azim Premji University (Bangalore), and elsewhere. A typical year-long course would teach the first 16 units and conclude with anything from one to all of the capstone units (devoting two or more weeks to each, if time allows). Spending three or four weeks on one of the capstones is an opportunity to bring in additional materials, student research or reports.
An introduction to microeconomics (one semester)
The Toulouse School of Economics and the Lahore University of Management Sciences use The Economy as its introduction to microeconomics. This course might teach Unit 1 and Units 3 to 12, with the remaining weeks of the course devoted to a combination of Unit 2 with capstone Unit 21, or capstone Units 17 to 20.
An introduction to macroeconomics (one semester)
A one-semester introduction to macroeconomics based on the CORE text has been taught at Sciences Po, Paris and Middlebury College, Vermont, US. A possible configuration of such a course is Units 1 and 2; review of feasible set and indifference curves from Unit 3; 6 (wage-setting); 7 (price-setting); 9 and 10, and 13 to 17, plus a selection of capstone Units 18–22, possibly including the material on disequilibrium dynamics from Unit 11.
Introduction to economics (one semester)
A course along these lines has been taught at Humboldt University (Berlin), University of Sydney, and University of Bristol. Providing the basic concepts of the discipline in a single semester is a challenge but it can be done (in 14 weeks) using Units 1, 3 to 10, plus 12 to 16, ending the course with Unit 17 (an application of macroeconomics) or one of the other capstone units, stressing microeconomic applications.
Masters courses in public policy
This text has been used at the School of International and Public Affairs at Columbia University, the School of Public Policy at the Central European University, and the Sol Price School of Public Policy at the University of Southern California, among others. The courses have implemented variants of the above course structures, making use of the depth of coverage of policy problems in the capstone units.
Secondary school courses
Schools including St Paul’s School, London and Melville Senior High School, Western Australia have used parts of the text for extension activities for upper-level students.
Options for pedagogy
The Economy also facilitates a range of teaching approaches, in line with recent developments in pedagogic methods.
The material can be taught in a traditional way, with the substantive theory in each unit delivered through lectures, and reinforced and elaborated in classes with problems and exercises.
Classroom games and experiments
The empirical emphasis of much of the material in The Economy, and the extensive embedding of game theory, encourage a more active approach to student learning through the use of classroom games and experiments, and problem-oriented learning using real data. Datasets and ideas for classroom games are provided on the Instructors’ part of our website, to help teachers incorporate these methods in their teaching.
Flipping the classroom
Active classroom learning can be encouraged by the selective use of ‘flipped’ or ‘inverted’ approaches, in which traditional lectures are replaced by interactive sessions based on problems, games or discussions. In these teaching approaches, students are assigned material (readings, quizzes, or videos, for example) before class, which is then used as a basis for discussion and activity in the classes. Classroom polling software (or student response systems) can be used to test students’ engagement with the assigned tasks through quizzes, and games and data work can then be used to deepen understanding and reinforce this understanding. The Economy lends itself well to this approach, because units progress from real case studies and narratives to the selection and use of appropriate theoretical tools for understanding these case studies, and then to the detailed underlying theory.
One approach to flipping the classroom is to encourage students to read the narratives and historical case studies outside class, and to think about the economic tools that can help explain these cases. The detailed use and understanding of the theory can then be developed within the class by the use of problem-oriented data work and classroom games. Experience in many classrooms with the beta versions of The Economy suggests that students engage more readily in pre-class reading of the interactive ebook than in previous introductory courses. The habit of reading ahead of class can be kick-started with a multimedia group project used in several CORE pilot universities.