Teaching AD‐AS models: Institutions and the Asian crisis

Abstract

Colander (2000) suggests that students often fail to recognise the passion and excitement of economics because of the way that we teach economic stories. In his view, using formal models at the principles level to analyse macro stories makes the stories boring. We suggest that some models, particularly aggregate demand and supply, are valuable tools, for students. In teaching the models the key is to demonstrate their usefulness for business and policy, and to present them in a way that goes beyond the standard textbook treatments. We suggest a teaching approach that emphasises the institutions, political constraints, uncertainties and path dependencies that impact on policy and business decisions.

Notes

Steven Lim, Economics Dept, University of Waikato

The author is indebted to Anna Strutt, Dimitri Margaritis and two anonymous referees for their insightful comments and suggestions.