Learning to Argue with Intermediate Macro Theory: A Semester-Long Team Writing Project

Abstract

The authors describe their experience with integrating a semester-long economic analysis project into an intermediate macroeconomic theory course. Students work in teams of “economic advisors” to write a series of nested reports that analyze the current state of the economy, and propose and evaluate policies for a decision-maker. The project simulates real-world policy consulting with an emphasis on applying economic theory and models. The authors describe the project setup and how to tailor its theme to current events, explain methods for keeping it manageable in larger classes, discuss student learning outcomes, and document course evaluation results. Besides improving the learning experience, this project prepares economics students to contribute their own views to policy debates and buttress them with tight macroeconomic reasoning.

Keywords:

• cooperative learning
• financial crisis
• teaching intermediate macroeconomic theory
• team-based writing project

JEL codes:

• A20
• A22
• E00
• G01

ACKNOWLEDGEMENTS

The authors thank their undergraduate students and teaching assistants at Boston College and Washington State University for making this project a success. They are grateful to Richard Tresch for his comments, and they thank Tisha Emerson, Alan Love, and Vicki McCracken for their suggestions. They also thank Vicki McCracken for sharing her template of a grading matrix and three anonymous referees for providing helpful comments on an earlier draft.

Notes

¹In total, we have had 260 and 122 students in our courses at BC and WSU, respectively.

²The actual handouts are available from the authors upon request.

³The weight of the three reports can be set by the course instructor depending on other assignments that comprise the total course grade. We have, for example, used a grading scheme in which the project is worth 30 percent of the total course grade, with exams worth 60 percent and homework assignments adding up to 10 percent.

⁴See the appendix, tables A1 to A3, for an example of a grading matrix.

⁵A side benefit of this timeline is that students get hands-on experience with models and theory before taking the final exam.

⁶Report 3 also offers an opportunity to incorporate topics of long-run growth and sustainability.

⁷This is reflected in our course evaluations. When asked what is particularly good or interesting about this course, one student at WSU in the fall of 2013 wrote, “Application of theories to the real world made you really understand the effects and consequences of the theoretical models. Lot of working with the models made you fully understand fiscal and monetary policies. Comparison of short-run and long-run effects showed you the advantages and disadvantages of policies. Made you understand the current economic situation much better.”

⁸Our project bears some similarities with the College Fed Challenge (CFC) known to have educational value (Brusentsev and Miller 2011) but differs from it in several important ways. While the CFC also brings real-world economics into the classroom by analyzing current economic conditions, it tends to focus on one aspect of monetary policy. Our project provides a more comprehensive look at the economy as shown in table 1 and allows us to explore not only monetary policy but also fiscal policy and the interaction between them. Instead of using only a particular set of tools, this more comprehensive approach gives students an opportunity to apply the entire array of intermediate macro models/theory including short-run, classical long-run, and very-long-run growth models leading to a full integration of the project into the intermediate macroeconomic theory course. Importantly, our project encourages students to challenge existing models and question their limitations by “learning to argue with macro theory.” Finally, our project strengthens written communication skills identified by employers as one of the most lacking skills (Hart Research Associates 2013), while the CFC usually uses short oral presentations as the final product. Students will, therefore, benefit from our project in undergraduate economics programs that participate in the CFC (such as BC) as well as in programs that do not participate (such as WSU).

⁹For example, Blanchard and Johnson (2012, 474) started their policy chapter with the Republican “Contract with America,” an election program from 1994. While interesting in 1994, and in a course on recent U.S. history, this 20-year-old document is a nonstarter for student interest in the 21st century.

¹⁰Although we give all teams the same assignments to have a common direction, the project leaves ample room for pursuing different interests. For example, finance majors enrolled in our courses have explored the links between the macroeconomy and financial markets, which is a natural way for researchers to study the macroeconomy but is still underrepresented in intermediate macroeconomics textbooks.

¹¹Extensive literature has shown the importance of feedback for student learning. For example, Hattie and Timperley (2007) distinguished feedback about the task (FT), the processing of the task (FP), self-regulation (FR), and the self as a person (FS). The FR and FP forms are effective for deep processing and mastery of tasks, and the FT form is effective when the feedback is used to improve strategy processing or self-regulation. Our project creates ample opportunities to provide these three kinds of feedback. Furthermore, structuring the project as a series of nested reports allows us to provide timely feedback, which is highlighted as one of the most critical features of effective feedback by, for example, Higgins, Hartley, and Skelton (2002).

¹²The team size can be varied from two to four team members depending on the class size. The potential issue of free-riding arises in our project as in any other team project. We address this by implementing Team Evaluation Sheets that each team member must fill out after each nested report. On this sheet, the students indicate what percentage of team effort they contributed. For example, for a team consisting of three students, we expect to see 1 = 3 effort for each student. If another percentage is indicated or if any team member raises a concern, we address this issue. This tool seems to be quite effective, perhaps also due to the “threat” of having to complete the project individually if it turns out that free-riding occurred. Bartlett (2006) used a similar team evaluation sheet where team members rate each other's performance on a scale from 0 to 10.

¹³Team presentations to the entire class can be incorporated to further advance team and verbal communication skills if the class size allows.

¹⁴Ambiguous slogans were augmented with more details to facilitate a clear-cut evaluation: “Work must be rewarding”: Lower tax on wages; “End Bush tax cuts for the rich”: Increase the top income tax bracket from 35 percent back to 39.6 percent; “Low capital tax”: Cut the top corporate tax rate to 15 percent, eliminate taxes on capital gains, interest, and dividends, eliminate estate taxes; “We are the 99%”: Reduce income inequality among U.S. population; “Affordable housing for all”; “Extend level of mandatory health insurance”; “Eliminate Obamacare”: Undo Patient Protection and Affordable Care Act; “Fair economy”: No bailouts for banks; “Stop the Ponzi scheme”: Eliminate retirement insurance in the Social Security Act; “All electric energy from renewable resources”; “Towards a sustainable economy”; “Free money”: Abolish the Federal Reserve Bank; “Lean government”: Eliminate the departments of Energy, Housing and Urban Development, Commerce, Interior, and Education.

¹⁵For example, in the first exam that covers the classical long-run model, we asked the following question in 2012: “The United States is currently running a budget deficit. There are two fiscal policy actions the Obama Administration could take to balance the budget. Using the classical model with fixed output, explain each action. Be sure to show a graphical illustration of the model.” Nevertheless, most exam questions cover textbook theory and models along with technical skills such as algebra to ensure the students study all intermediate macro material.

¹⁶The university-wide course evaluation questionnaire includes eight questions where the students are allowed to type in any comment they wish (e.g., “Please provide comments about what elements of the course did or did not help you learn.” and “Overall, what is particularly good or interesting about this course?”).

¹⁷The top teams in one of our BC classes received an extra boost of motivation by aiming to publish their projects in “The Eagletarian,” a student-run economics journal at BC.

¹⁸De Araujo, O’Sullivan, and Simpson (2013) pointed out that there are two main approaches to teaching macroeconomics at the intermediate level: the traditional approach based on aggregate models of the macroeconomy and the new approach of building macroeconomic relationships from microfoundations. While we use textbooks with the traditional aggregate approach, the microfounded approach (e.g., Williamson 2011) does not preclude instructors from implementing this project in any way. See also Gray and Miller (2011) for more detail on leading intermediate macroeconomic textbooks.