By Laura Conaway

Today we heard from economics professors Atif Mian and Amir Sufi about what they've learned in the financial crisis.

Economics professor Ascension Mejorado of New York University also recently considered for us how the financial crisis would change the way the discipline is taught. Mejorado's answer? Not much. She writes:

Textbooks are not implementing any substantial changes in response to the current crisis. Those authors who want to address this problem just introduce a section in the chapter on money and banking or in the chapter on the business cycle. But, unfortunately, they still see it as a problem "of people," not as a problem "of the system." To understand what is going on they should have to change their approach and rescue the ideas of the classical authors, from Smith to Marx. Of course, they are never going to do that and neoclassical economics will just see this crisis as a blip in the growth path of the system. Some are even saying that we are almost out of the crisis... and Bernanke's last testimony before Congress is fueling this idea too.
Sorry I can't be more optimistic but I really think that the current crisis will not alter the way economics is taught. The economics courses taught at most universities have a purpose and that is to divulge the idea that a free enterprise system is perfect. The current crisis contradicts this vision of capitalism as a perfect system where markets will always clear and produce full employment. It shows that there is something inherently wrong with a free market system. Hence, conventional economists opted, first, for minimizing the consequences of the current slump and, secondly, they decided to blame it on the weakness of people's character.
I would like to see a real alternative to current conventional textbooks showing how our economic system REALLY works. But I don't think it will happen anytime soon.

On Friday, we'll post a different view from Simon Johnson, who teaches economics at the Massachusetts Institute of Technology.

categories: Understanding The Crisis

4:24 - September 10, 2009

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