Teaching Economics in the Downturn

I must begin with acknowledging the article "How should the financial crisis change how we teach Economics?" by Robert Shiller of Yale University in the Journal of Economic Education. Reading this article prompted me to consider my experience in the Economics class this term. Teaching Economics in an MBA class has always been a challenge. And the one question, I have to answer every session is "how is this going to help me". However difficult it may seem, this question from my ever curious students made me introspect on what I was making them learn.

I started the term with an HBR article on "The end of the rational consumer." This article provokes the student to challenge the basic premise on which economic principles are built - rationality of the consumer and his ability to further his self interest. The article questions the invisible hand, the revenge motive of customers and the questions the premises of behavioral economics. I followed this up with two other HBR articles when discussing consumer behavior - Understanding the post recession consumer and how to market in a downturn. Again in these articles we questioned the basic comparison between a post growth society and an emerging one.

Economics Education has to be contemporary especially in a business school context. As much as we need to focus on the framework of the theory, we also need to tap the world around us and connect the classroom to these experiences. Considering the changing economic paradigm, as teachers in this profession, we need to be able to create a motivating environment; one which questions the basic theory and also updates the research in the field with the stories from the business world.

Shiller's article talks of the challenges in teaching macroeconomics. Teaching the course for about 6 years now, I have realised that the business students need a more general understanding of the concepts and their usability and not necessarily the theoretical rigor that economics graduates go through. To make the sessions more connected to the real world, I used debates and book readings as part of the course. Student teams were allotted one of the Economics Bestsellers (Freakonomics, The World is Flat, Rogue Economics, Undercover Economist... to name a few). They came up with a presentation (in the form of cartoon strips, poems, crosswords, puzzles, treasure hunt etc..) of the book assigned to them, which were then put up in a showcase.

We also had a series of student debates on issues of current relevance in the course. These were structured to help the students deliberate and consolidate their understanding of the big picture of the world economy. This would also help them relate to the learning of concepts in the class with the real world situation.

Teaching Economics in the downturn is a greater challenge because in the process of evaluating the current situation, students also have to come to terms with questions of their career choices. It is important to make classroom learning environment vibrant with extensive student participation in times like these, as they get to question, challenge and critique the world around them, create opinions, appreciate diverse viewpoints and also emotionally connect to the changing economic paradigm.

My Economics classes this term were more exciting than ever. It has always been a challenge to engage a bunch of young minds especially an inquisitive one. Considering the dynamically evolving economic scenario, economics teaching is a lot of fun, challenge and hard work.

I hope I have done justice thus far!!!

What does 2025 mean for us?

By 2025, Beijing and Shanghai will outrank Los Angeles and London...Mumbai and Doha will surpass Munich and Denver, McKinsey Quarterly says in article on Urbanisation in the Eastern Hemisphere. Considering where India stands at this point, and that growth is just beginning to peak in many sectors what according to you will be the chinks in India's armor?

14 years from now, will drinking water and electricity be concerns..How are we faring on that count? Does development consider these sectors? A decade from now on...will we be better of in education and healthcare?

We may have the world's largest consumer base for white goods, but will there be grain sufficiency? These are questions we need to think about..

My vacances in the Andaman - Part I

Whew...that was one of the longest breaks we have taken....and must say it was worth it. The deep blue waters..call it turqoise, emerald, blue or green...they would make you feel the depth of the oceans. And along with it also the depth of the serenity around. You cannot ask for being more in sync with nature. The anticipation as we flew into Port Blair was palpable. We were looking forward to four days of fun and being in the waters.

It was a perfect start on the Air India flight from Chennai to Port Blair. As we fly into the capital city, I am amazed with the little islands dotted on the deep blue waters. We fly into the airport that is amidst thick forests. The Veer Savarkar International Airport is small yet daintily situated at the foothills of mountains (infact surrounded by mountains). You walk right into a CISF bastion...No cameras please, says the cop wielding his antique gun.

We had Samir waiting for us from 'Barefoot' (we were to stay at this jungle resort for 3 days). We drove straight through the winding steep roads to Ashiana (our abode for the day). We were to stay in Port Blair for the day. The capital is a very small place...small for someone from a metro. Imagine reaching the airport in 10 mins from anywhere, or going shopping only 5 mins away, or visiting 4 museums in a day, or eating freshly procured fish..that you could choose from for lunch..laze around the lounge for 3 hours having it..and finding it difficult to walk to you car after that..sounds exciting, doesn't it??

The Kaalapani is indeed one of the most touching visits and the voice of Naseeruddin Shah doesn't leave your ears till days. I can still hear the tree talking about the cries of freedom and the pain that lurked around the gallows. We went back home after a quick dinner..the best part was to begin the next day..the boat ride to Havelock...(Heaven on earth!!)

Have loved re-living it!!!

Do we really give back??? Musings on the RMC course

Attending the session on "why we give" was stimulating. In the last so many years, I have never looked at social service as a career option, but sitting through the sessions in Resource Mobilization and seeing the very motivated participants was indeed an eye-opener. One of the questions being discussed was "why do people give". The first answer that came to my mind is that I have been more fortunate than so many others and good fortune must be shared. As I see young girls going to the school opposite my house, I am reminded of the days I sat behind on my dad's bicycle as he took me to school. It is not just the opportunity of education, but the faith, affection and the freedom to be myself.

I wish I could give that back to someone. Not just the money to help educate a girl child, but help give her the courage to take on life and inspire others. The other reason why we give (as in the discussion was) - that we feel guilty. Most participants at the meet felt that money was one form of giving, but more important was the time and the effort of being involved.

As we went through the ten days, I realised how much privileged I have been and that the work I was doing in an elitist environment was not really helping transformation. It has only strengthened my resolve to do more for the not so fortunate children. I hope I will muster the courage to make the decision sooner than later......

Teaching ED and Economics together!!

Teaching ED and Macro this term is a heady combination...While macro forms the basis for my thought process, ED is that inspiration element...Jobs always exist..they need to be identified. Similarly economic thought exists, it needs to be appreciated. What I am experiencing this term is more difficult than before. I find myself struggling to break myths that young minds have accumulated. I find their rigidities more scary than their lack of understanding. I know that learning will happen only when you also unlearn faster..it can also only happen when you decide that there could be a contrarian view.

Learning economics is like learning poetry...what appears sad and mundane to you, may appear vibrant and opportunity to another. This is also the basis for entrepreneurial thinking. Over the years, studying economics has helped change the way I think about everything and entrepreneurship happened from the need to give back to society what I gained.

I hope this term helps me get these young minds into at least questioning the obvious and if they need to accept the regular, can they justify it to themselves all the time? In ED it is more difficult to break notions and more important so that it helps them look at the same things differently.. Macroeconomics is as much fun as challenge...and the classes are more like war zones these days..I need to make peace soon..

Decoupling China - what are the odds?

To take Piyush forward on the decoupling debate, the developed world seems to be awe-inspiringly looking forward to some miracle in China and at the same time debating whether it wants to let the reins of control go to the Oriental East. Piyush argues in his post that the emerging markets are more coupled today than ever before. The question - What will it take China to change the geo-political balance? Is the great dollar reserve that went all the length of the Great Wall finally shrinking up? If there indeed was an opportunity for China, what would it do for the Indo-China bilateral relations?

To answer some of these, let me put forth the following propositions (can be contested) - China is a large exporter to the US, but does not have influence over the rest of the world. China's manufactures are not strategic...they may be filling up Walmart's but still remain in control only of low value add products. China has been suggesting a shake up of its over $2 trillion reserves..but is worried about the impact this would have on its export competitiveness.

What is in this changing environment for Indo-China relations? Coming to the bigger concerns of India's role in ASEAN, UN and other bodies, China's relative rise to the top will dwarf the already weak claims of India. What do we need to do to prove that we are part of the decoupling brigade?

Another way to look at the China option is to evaluate the political response. Is China really going to be the next big economic change post recession? What does China have to do to gain its place in the world.

(The post I have referred to above is by Piyush on the decoupling debate. You can read it at http://discuss-international-finance.blogspot.com/)

Does the market always work?

The more I teach economics and read it, the more I am convinced that market works. There is nothing like pricing a good. Today's class showed me that too. My students seem to be concerned about saying the wrong things rather than saying what they think and letting themselves be judged. The moment you associate a grade with a comment, they are scared of saying anything. That is why I think the market works....because the more you value good participation, the more the involvement and greater the learning. So people are rational and they respond to economic incentives. That makes it easy for us to design rewards and punishments for every act.

The market also works in distributing information evenly. The discerning student who sought information sounded much more logical and constructive. What I mean when I say 'evenly' is that it seeks its best price and removes the possibility of irrelevant information flowing in. So in essence market means the agent's ability to command a price and thereby direct the quality and flow of the decision. Doesn't the market make it difficult for the non-payer to participate in decision making? The non-payer is not a stakeholder in the economic activity. He need not pay monetarily, but his involvement in the non-monetary acts determines his stake and thereby level of involvement.

Therefore, to conclude, I have observed that market principles work best when left to themselves. At the cost of sounding so Adam Smith-like, I would mention that even a student beginning his journey into economics knows how to make trade offs and can see opportunity costs of decisions and is articulate about making the optimal choice. Isn't that sufficient testimony that markets work everywhere?