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Abstract
The authors describe an undergraduate economics elective focused on the Great Recession and the recession resulting from the COVID-19 pandemic. They have taught the course with great success at both liberal arts colleges and research universities and at all levels of the curriculum ranging from a first-year seminar to an upper-level elective. They present a roadmap for instructors interested in offering the class. Although intermediate macroeconomics is assumed as a prerequisite, the authors discuss how they have adapted the class for students with different backgrounds. The course is divided into seven units: the housing bubble and asset pricing, housing policy and history, propagation and panic, monetary policy, fiscal policy, aftermath and international perspectives, and the macroeconomics of COVID-19. Sample assignments and readings are both provided.
Acknowledgments
The authors thank participants at the May 2019 Conference on Teaching and Research in Economic Education and, in particular, our discussant, Alexander Eiermann.
Notes
1 See Ramey (Citation2019).
2 See Kuttner (Citation2018).
3 de Araujo, O’Sullivan, and Simpson (Citation2013) provide a post-Great Recession discussion about what should be taught in intermediate macroeconomics.
4 Jones (Citation2018), a popular intermediate macroeconomics textbook, has two chapters in Part 3, “The Short-Run,” dedicated to the Great Recession.
5 Our own advanced macroeconomic classes include models with financial accelerator effects. Examples include Bernanke, Gertler, and Gilchrist (Citation1999) and Iacoviello (Citation2005). Solis-Garcia (Citation2018) provides an overview of teaching DSGE models to undergraduates.
6 For example, Nobel Laureate Paul Krugman offered one at Princeton in 2014.
7 The first-year seminar is designed to help students transition to college-level reading, writing, research, and analysis through a topical course.
8 The version of the course described in this article does not require an econometrics prerequisite, but throughout we provide opportunities to incorporate that skill set if students have taken it. We also indicate adaptations for the lower-level course with no prerequisites.
9 This is particularly relevant for liberal arts institutions or those without a business program that do not regularly offer finance courses.
10 Ball (Citation2018) provides a good reference for students interested in this issue.
11 Wolla (Citation2019) provides an approachable analysis of how monetary policy implementation has changed since the financial crisis.
12 In the version of the course with no prerequisites, there is an additional focus on information literacy, including teaching students how to distinguish among source types, identify quality sources, choose search terms, and use sources to develop a scholarly conversation.
13 If the course is taught at lower levels, readings typically consist of popular press articles, books written for general audiences, Federal Reserve publications, and some scholarly pieces often from outlets such as the Journal of Economic Literature or the Journal of Economic Perspectives. We also assign some films such as Bernanke (Citation2012), a four-part series of lectures from Ben Bernanke with the last two dedicated to the financial crisis. Other examples include popular films such as Inside Job, The Big Short, and Too Big to Fail.
14 A sample syllabus and course schedule are available in an online appendix (https://sites.google.com/site/emilycorinnemarshall/teaching-resources/a-tale-of-two-recessions).
15 The final course paper assignment prompt, as well as various components of the final paper due throughout the semester and the corresponding rubrics, can be found in an online appendix (https://sites.google.com/site/emilycorinnemarshall/teaching-resources/a-tale-of-two-recessions). This process-oriented approach to writing-in-the-discipline enhances student learning through the iterative research process (Marshall and Underwood Citation2022; McGoldrick Citation2008).
16 For students with no prior economics coursework, to demonstrate a speculative bubble, instructors can use a classroom experiment, “The Bubble Game,” designed by Moinas and Pouget (Citation2016).
17 For example, Robert Shiller’s article (Citation2008) in the New York Times entitled, “How a Bubble Stayed Under the Radar,” or formal scholarly work such as Bikhchandani, Hirshleifer, and Welch (Citation1992).
18 For example, DiPasquale and Glaeser (Citation1999) and Coulson and Li (Citation2013) offer an econometric analysis appropriate for advanced students, and DiPasquale (Citation2011) and Goodman and Mayer (Citation2018) provide a less technical overview for students at a lower level.
19 For introductory-level students, Marginal Revolution University offers a free classroom simulation exercise on securitization available here: https://mru.org/teacher-resources/active-learning/teaching-great-recession-securitization-simulation.
20 In the version of the course with no prerequisites, Taylor (Citation2013) provides a nontechnical explanation of monetary policy during the early 2000s.
21 For more advanced students, we have developed a homework assignment based on Gilchrist and Zakrajšek (Citation2012), who distinguish between these factors.
22 More advanced versions of the course have asked students to read and evaluate Leamer (Citation2007) as evidence of this connection with housing’s role as a leading economic indicator.
23 See, for example, Gambacorta, Hofmann, and Peersman (Citation2014), Williamson (Citation2016a), and Engen, Laubach, and Reifschneider (Citation2015).
24 See Williamson (Citation2016b) and Wolla (Citation2019).
25 Taylor (Citation2014) provides an approachable critique of the Federal Reserve policy’s role in the crisis.
26 See Gelain, Lansing, and Natvik (Citation2018).
27 The New York Federal Reserve’s Liberty Street Economics blog is a good example. See Luck and Zimmermann (Citation2019) for an example on the effectiveness of quantitative easing.
28 Examples that support the effectiveness of unconventional policy include Gamborta, Hofman, and Peersman (Citation2014) and Engen, Laubach, and Reifschneider (Citation2015). Williamson (Citation2016a) provides a more skeptical view.
29 Steindel (Citation2001) provides an accessible overview of the topic. Sahm, Shapiro, and Slemrod (Citation2010) and Shapiro and Slemrod (Citation2009) provide empirical estimates of the MPC in 2008 following the tax rebates.
30 Congressional Budget Office (CBO), August 2011, “Estimated Impact of the American Recovery and Reinvestment Act (ARRA) on Employment and Economic Output from April 2011 through June 2011.”
31 See Steven Rattner, 2009, “The Auto Bailout: How We Did It,” Fortune, October 21.
32 We have sometimes divided the ARRA debate into three positions: that it was sound policy; that it was far too small; and that it was far too big. This is useful when there are an odd number of students enrolled in the class.
33 Examples include Japan’s long battle with low inflation/deflation and Brexit.
34 Karlsson, Nilsson, and Pichler (Citation2014) is a potential paper to use on the economic impacts of the Spanish Flu.