Economist Spotlight: Interview with Alan B. Krueger, Part Five

POSTED: February 20, 2014 | BY: Daniel Thompson | TAGS: ,

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This is the fifth in an eight-part series of CEE’s Economist Spotlight with Dr. Alan B. Krueger.

Dr. Krueger, the Bendheim Professor of Economics and Public Affairs at the Wilson School at Princeton University and former chairman of President Obama’s Council of Economic Advisers, is the author of the newly published textbook, Explorations in Economics. In this spotlight series, Alan will address topical issues including unemployment benefits, increased job growth, minimum wage legislation, investment in human capital, and more.

The interviews were conducted by 2013 Alfred P. Sloan Teaching Champions Awardees, Kathleen Brennan and Saji James.

Kathleen Brennan:

Q. I have been looking for a non-AP book for a few years and was thrilled when I got an advance copy of yours (Explorations in Economics, by Alan Krueger and David Anderson). It’s made a real difference in my economics class because the teacher’s edition has annotations that give me ideas to expand what I teach beyond the book. Most of the sources are real-time based: Fred, the St. Louis Fed’s education site, videos—to name a few. I’m familiar with a lot of them, but it’s nice to have them at my fingertips when I get to a particular topic in the book. Why did you write it? How is it different than other books?

Alan Krueger:

A.  I wrote the book because I thought that high school was the right time to try to introduce students to economics. High school students have to make many key decisions, such as what to do after they graduate, and I thought that economics provides them with an essential framework for evaluating their choices. I also was not satisfied with the way that other high school books approached the subject. To me, they looked like watered down college books that jumped around from subject to subject, without really explaining things well. I wanted to start from scratch and write a book that would attract students’ interests and explain economics to them in a context that was interesting and fun. From the start, I told my publisher that I wanted to do what Paul Samuelson had done for college economics – namely, reinvent the way the subject is taught to make it more engaging and more useful for students.

David Anderson helped to finish the book when I left to work in the Obama Administration, and he shared the same philosophy that the book should use many examples from real life and public policy, and use examples that students could relate to.

Kathleen Brennan:

Q. I love the ancillary material that is included with your book, particularly the activities. Given many students only take economics in high school, do you have any recommendations as to which topics it is absolutely essential for all students to understand? Do you have any favorite activities that best illustrate these topics?

Alan Krueger:

A. I think there are three key areas that all students must understand. First, that scarcity is part of life, and that this necessitates tradeoffs, both for individuals and society as a whole. From an individual perspective, students have to understand that they face a budget constraint, and from a societal perspective they must understand that we can’t operate beyond the production possibility frontier. The budget constraint is easy to demonstrate with students in class. You can give them a budget and a set of prices for various goods students are interested in, and ask them how they would allocate their budget.

Second, they should understand that prices and quantities are determined in markets. There are many auction games that could be played in class to help illustrate how markets work. I think it is important for students to understand how they affect, and are affected by, market activity. More generally, I think it is important for students to understand that they are part of an economic system, and to understand how that system affects them and their friends and family.

Third, they should understand what it means to make a rational decision, and—even more importantly—they should understand the common mistakes that people make when making decisions. This is why I included a module on behavioral economics. Students can’t understand what’s rational without also seeing what is irrational. I think that rational decision making and behavior economics also connect with personal finance, and one goal that I established for the book is to enable students to make better personal finance decisions throughout their lives.

The next Economist Spotlight: Interview with Alan B. Krueger will publish February 25, 2014.

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