Hey Econ Profs - Get Your Textbooks Here

[marmar]

from Dollars & Sense:




Hey Econ Profs - Get Your Textbooks Here
by Dollars and Sense


An economist is walking down the street with a friend.

The friend stops and says "Hey look, a $20 bill on the ground!"

The economist coolly replies "Can't be. If there was a $20 bill on the ground someone would have picked it up by now."

That old joke pretty much describes the current mindset of orthodox economics in U.S. academia despite the current global financial meltdown, as nicely described in the NYT article below.

For those teaching economics who don't have time for new generation of textbooks to be written, check out Dollars & Sense classroom readers and books.

Ivory Tower Unswayed by Crashing Economy
By PATRICIA COHEN

For years economists who have challenged free market theory have been the Rodney Dangerfields of the profession. Often ignored or belittled because they questioned the orthodoxy, they say, they have been shut out of many economics departments and the most prestigious economics journals. They got no respect.

That was before last fall's crash took the economics establishment by surprise. Since then the former Federal Reserve chairman Alan Greenspan has admitted that he was shocked to discover a flaw in the free market model and has even begun talking about temporarily nationalizing some banks. A Newsweek cover last month declared, "We Are All Socialists Now." And at the latest annual meeting of the American Economic Association, Janet Yellen, president of the Federal Reserve Bank of San Francisco, said, "The new enthusiasm for fiscal stimulus, and particularly government spending, represents a huge evolution in mainstream thinking."

Yet prominent economics professors say their academic discipline isn't shifting nearly as much as some people might think. Free market theory, mathematical models and hostility to government regulation still reign in most economics departments at colleges and universities around the country. True, some new approaches have been explored in recent years, particularly by behavioral economists who argue that human psychology is a crucial element in economic decision making. But the belief that people make rational economic decisions and the market automatically adjusts to respond to them still prevails.


Read the full article here.



http://www.dollarsandsense.org/blog/2009/03/hey-econ-profs-get-your-textbooks-here.html

[elleng]

1. The 'rational' assumption has either bugged me or make me laugh.

How COULD THEY???

A nice, rational person make decisions when students at b-schools are taught to break the backs of the competition! so its SHOCKING that psychology would play a role?

'Economics' is worth s***, imo.

[leveymg]

2. A rational person doesn't drop money in the street, but it happens.

Unfortunately, rational actors and perfect markets are at the heart of orthodox economics. People and markets just don't act that way, unfortunately. If economists ran the world, we'd still be living in caves . . . and, may be again.

[JCMach1]

3. Dead-ender children of Friedman...

[HillbillyBob]

4. Well not being an economic jeanious..(sic)

I never thought I would be glad I was too broke to invest in the casino that is wall street...
My partner and I have been warning friends for years that wall street was going to swallow all of our savings..not that I had enough after rent, food, and power bill to save anything. It has been a financial struggle since I was outted as an air traffic controller for the navy on ronnyrayguns dismal watch. Every time I thought I was far enough ahead to maybe go back to school something happened, lay off, health, economic downturn, landlord raise the rent because I fixed the place up enough to save a few bucks on the power bill.
I supposed that doom and gloom and stock piling rice and beans might be the order of the day.