Principles of Economics Without the Prince of Denmark

Abstract

In most introductory textbooks on principles of economics, discussion of the theory or practice of entrepreneurship is almost entirely absent. This omission is striking, given the important role in economic growth that economists assign to the entrepreneur. While there are plausible explanations for this omission, new research suggests the beginnings of a body of formal microtheory on innovative entrepreneurship. In this article, the authors first review treatment of the entrepreneur in the latest editions of three commonly used introductory economics textbooks, each of which includes a substantive discussion of entrepreneurship. Second, the authors present brief overviews of new microtheories of entrepreneurship (Parker 2009; Spulber 2009; and Baumol 2010), each of which has potential to serve as inspiration and to provide a framework for inclusion of entrepreneurship in introductory microtheory.

Keywords:

• economic education
• entrepreneur
• teaching of economics

JEL codes:

• A2
• L26

Acknowledgments

The authors are grateful to Alyse Freilich for her very capable assistance in preparing and editing this manuscript, Marisa Porzig and Nadia Kardash for their assistance in analyzing textbooks, and Anne Noyes Saini for her invaluable, careful editing. This article is based on a paper that was presented at the National Conference on Teaching Economics at Stanford University on June 1–3, 2011.

Notes

1. Dolan, E. G. 1986. Economics. 4th ed. Chicago: Dryden Press.

2. We reviewed books from the lists in Kent (1989) and Kent and Rushing (1999) that were available in current editions, as well as newer books selected from the amazon.com list of bestsellers. Texts reviewed included Baumol and Blinder, 11th ed. (2009); Frank and Bernanke, 4th ed. (2008); Hall and Lieberman, 2nd ed. (2007); Krugman and Wells, 2nd ed. (2009); Mankiw, 5th ed. (2009); McConnell and Brue, 17th ed. (2008); Parkin, 8th ed. (2007); and Samuelson and Nordhaus, 19th ed. (2010). Our selection of the three books to analyze more thoroughly is based on a word count of sections addressing entrepreneurship, along with our judgment as to the completeness of coverage.

3. Professor Baumol, as the author of one of the textbooks analyzed in this article, had no role in writing any remarks on the three textbooks reviewed in this article.