What Should we Study When we Study Economics?

Contributor(s): Professor Wendy Carlin | The financial crisis triggered a fundamental rethinking of how economics students are taught and what they learn. An international collaborative project of economists (the CORE project), led by Wendy Carlin, has responded with a new curriculum that provides tools for engaging with the issues of economic inequality, environmental sustainability, innovation and wealth creation, and financial instability. Some policy shortcomings can be traced to a view – standard in undergraduate economics teaching – that the pursuit of self-interest in competitive markets is a sufficient guide to how society should allocate its resources. But this confidence in unregulated markets finds little support in recent economic research. In this new, empirically based view, instability, growing economic disparity and environmental destruction are not exceptions to the rule but rather the expected outcomes of an unregulated market economy. Fundamental changes have occurred, too, in economic knowledge of individual behaviour resulting in a growing recognition of the economic importance of ethical and other-regarding motives alongside self-interest. The tools of economics can be taught using new research insights and empirical results to address questions of importance to students, policy-makers and a broader public. Wendy Carlin is Professor of Economics at University College London, and Research Fellow of the Centre for Economic Policy Research. Robin Archer is Director of the Ralph Miliband Programme at LSE. The Ralph Miliband Programme (@rmilibandlse) is one of LSE's most prestigious lecture series and seeks to advance Ralph Miliband's spirit of free social inquiry.