The pandemic is giving Americans a crash course in economics
“Future expectations” used to be a difficult economic concept for students to understand, said Morgan Taylor, an economics professor at the University of Georgia in Athens. It was hard to grasp a situation where, say, you would expect a shortage of something, and it would change your demand for a good.
And came the great toilet paper rush of 2020. We’ve all been hoarding TP, expecting the supply to run out. These days, students get the idea quite easily.
Why is this important: The weirdness of pandemic economics provides “fabulous examples” for economics professors around the country, Taylor and other professors told me. The material suddenly seems “relevant and fresh”.
- Students can use what they learn to explain to their friends what is happening with rising prices, various shortages and, of course, the labor market — which they will soon enter.
- With more students returning in person, professors say they sense a new urgency to learn from them, less palpable during remote school.
Details: The other day, Darin Wohlgemuth was teaching the concept of substitutes in his economics class at Iowa State, using his prime example: If there’s no coke, you can turn to Pepsi.
- Then he mentioned computer chips: what if you get all your chips from one supplier?
- “It’s a really big problem in Michigan,” said one student, referring to the chip shortage facing the auto industry (and driving up the price of cars).
“It was a fun connection”, said Wohlgemuth.
- Hand sanitizer is also returning to classrooms. Wohlgemuth shows the students a photo he took at Aldi of the price crossed out on a bottle of the once-hot product.
In Paul Graf’s classes at Indiana University in Bloomington, students talk about how technology replaces work, as they order food in restaurants from kiosks instead of waiters.
- “I always tell students that now is a great time to learn economics,” Graf said.
The youngest learn supply and demand in a way that touches home: via Girl Scout cookie shortages.
- A troupe leader in New York teaches his 10- and 11-year-old children inflation lessons, the WSJ reported last week.
- Yes, but: “It’s boring,” a fifth grader told the newspaper.
The bottom line: We are all trying to make sense of the world. And the economy, perhaps once considered somewhat esoteric by young people, is getting a makeover.
- “It’s been a tough few years, one of the things that helps us cope is the creation of meaning,” said Justin Wolfers, a leading economics professor at the University of Michigan. “Economics certainly helps you understand the larger forces that shape your life.”