Dr. Bill Rohlf
Professor of economics
Last fall, when I was on my sabbatical, I happened to run into an old friend, a businessman who had been out of college for a few decades. When he asked me how I was spending my “vacation,” I told him that I was “playing around with models.” His horrified expression told me that my flip answer didn’t serve me well. I’m not sure if he had a mental image of me hanging around Victoria’s Secret or playing with my grandson’s model train set. Either way, he didn’t deem my behavior age-appropriate. When I attempted to clarify, “You know, theoretical models— theories,” he replaced his horrified expression with one of disdain. “Gee, that seems pretty…esoteric.”
I know my old friend’s objection well. I’ve confronted it my entire teaching career. Many students enter college convinced that education is about acquiring facts. When they hear the word “theory,” it probably doesn’t have a good connotation. For beginning students, theoretical is the opposite of real-world; it’s something confined to the classroom and not useful beyond that domain. With our first and second year students, that’s where we have to start—by building a foundation for the models and theories we are going to be presenting.
I begin each semester attempting to convince my introductory level economics students that life demands more than the ability to memorize and recall facts. Rather, what we need the most is help in answering questions or solving problems where the answer is not self-evident or obvious. I think it is an important “fact” that the Federal Reserve controls the money supply. I think it is even more important that students understand how and why the Fed attempts to accomplish that objective. That requires working with a theoretical model. Likewise, students can memorize the fact that competition benefits consumers. It requires another theoretical model to really understand that process and how it can break down.
The study of economics is not esoteric; it is very practical. It focuses on the most fundamental problem facing society: scarcity. But economics is definitely abstract. Economists use curves and equations to represent real-world concepts. And it’s easy to lose the real-world lessons in all of the curves and equations. Some students easily see the connection between our economic models and the real world. But many do not.
I’ve taught economics for a long time. Each year I teach fewer models and attempt to provide more examples. If students leave our classes believing that the supply and demand model is about shifting curves rather than about how markets work to determine prices, they will adopt my old friend’s view that working with theories and models is an esoteric pursuit. On the other hand, if they can use the economic models to help them understand the implications of the news they read—the impact of the Syrian conflict on the oil market or the impact of a developing China on commodity prices—then they will see economic models the way I do: as eminently practical tools for understanding the real world.