If Students Only Take One Econ Course, What Should They Learn?

Avi Cohen, professor of economics at the University of Toronto in Toronto, Canada, discusses the value of using a literacy-targeted approach in economic education.

Scott Wolla: Welcome to Teach Economics at the St. Louis Fed. On this episode, we’ll be joined by Professor Avi J. Cohen. He's had an impressive career. Avi earned his Ph.D. at Stanford, served as university professor of economics at York University and professor at the University of Toronto, holding fellowships at Cambridge and Duke, and contributing significantly both to the history of economics and economic education.

He has also authored textbooks and been awarded Canada's most prestigious teaching award—the 3M [National] Teaching Fellowship. Like in all of our episodes, we will start our conversation with Professor Cohen describing his journey to economics.

Avi Cohen: I went to the University of Michigan. One of the reasons I chose a big university—I was also considering small liberal arts colleges—was it afforded me lots of choice, because I didn't really know what I wanted to do. At Michigan, you could not take introductory economics freshman year; they decided it was just too challenging for first-year students.

So I took great books, philosophy, math—I don't remember what else. Second year, I took economics. The way the course was structured is that we had a TA teach most of the content three times a week, and then on Fridays there would be a lecture either by the professor or he often brought in guest speakers. So we got exposed to a wide range of different ideas in economics.

The TA was named Carson Bays, and he was fantastic. As you can tell, he made an impression because I still remember his name. In fact, as a serendipitous aside, I just discovered he taught for many years at East Carolina University and is now retired. I got to thank him for getting me so excited about economics.

In one of the Friday lectures, the speaker talked about a recently published book called “Monopoly Capital.” It was written by Paul Sweezy, who was a Harvard Ph.D. and who taught at Harvard in the ’40s, and Paul Baran, who taught at Stanford. The book was an argument about how industrial concentration in the capitalist system was affecting so many things, including inequality, imbalances of power and other big social issues.

This was the early 1970s, so there were still protests around the Vietnam War, and every student was interested in: How can I change society for the better? This gave me some sort of a clue about: Oh, this might be the way. The key message from that book was economic forces are what are most important for changing society. It’s not politics. It’s not the legal system. (My parents wanted me to be a lawyer.) But the economy was key. So I found for me not only something that was interesting, but also something that I thought could make a difference.

Wolla: That’s really great. In fact, the next question is about a particular economics teacher or professor that inspired you, and you named a TA. Were there other people in your career that were really influential to help push you along through your career?

Cohen: There are so many. And I don’t want to offend anybody by omission, but I have to limit myself to just a few.

There was another Michigan prof named Dan Fusfeld. He was a remarkably diverse intellect. He taught courses—and I took every one of his courses—in economic anthropology, in the history of economics, in the economics of the urban ghetto, in Marxian economics. He got me interested in and exposed to just the breadth of all the things in economics that I found interesting.

As a graduate student, I was a TA for a prof named Jack Gurley; he was known as “the master of the large lecture” at Stanford. He taught in the largest auditorium and had won student-nominated teaching awards many, many times. I became his head TA, and I sat in on every lecture he gave. I learned how to do it. In fact, as a reward, he let me give one of the lectures in that introductory course. That was just such a great experience, both in terms of learning what was involved in preparing and also just in the thrill of the engagement.

Wolla: So, was that experience what really pushed you into the teaching aspect of your career?

Cohen: I think, mostly, I had other good experiences as a teaching assistant, but over time, I realized that was my calling. Part of it was also, I did want to change the world. I was socially active, but my personality is such that I don’t like confrontation. So I didn’t want to get out there in the trenches arguing with people and protesting, etc. I learned that, for me, I can change the world by affecting individual students through teaching.

Wolla: That’s great. And in those conversations with students in the classroom, what are some common misconceptions that students bring into their first economics class, or maybe even into their later courses? And how do you overcome those?

Cohen: The most common one, which all economics teachers will tell you, is that students think it’s all about making money. And this is not just students. If I’m introduced to somebody at a social event and they hear I’m an economist, they want my tips on the stock market. Well, I don’t know beans about the stock market. If I did, I’d be rich. So that’s one of the misconceptions.

The other misconception is the fear that economics is all about math and graphs. And certainly there is a lot of truth to some aspects of economics, but that is definitely a conception that many, many come in with. They see their first graph and they start trembling or they start sweating. So that's something to be overcome.

How do I overcome them? Really, the way I teach the course is to stress that economics is not just about money. It's really about making smart choices. And making smart choices can help you make money, but making money is not the be-all and end-all of economics. And graphs are a really important tool for simplifying things and can be really, really helpful. But you don't need them necessarily. They're not at the core of what it means to think like an economist.

Wolla: So if students could take away two important ideas from your course, what would you want those to be?

Cohen: Well, I think I just said them. It's not about money—just about money. It's not about math and graphs.

And the other, to rephrase it, is that economics is about a really powerful way of thinking that helps you make smart choices in all aspects of your life, not just about business, but personal decisions—taking out a certain kind of mortgage. There's even an economics of marriage and dating. It's a way of thinking that helps you make smart choices.

Wolla: That's really great. And I agree that it is relevant to almost everything in life.

You've done some great work on literacy-targeted teaching, or the literacy-targeted approach to economic education. For listeners who aren't familiar with the concept or the phrase, how would you describe literacy-targeted instruction?

Cohen: The literacy-targeted approach argues that it's far more valuable for students to learn and be able to apply a few core economic concepts well—and develop the competencies to do things with those concepts, to use them to analyze things in the real world—than to be exposed to a wide range of concepts and techniques, as most introductory courses do for majors, that most of these one-and-done students are unlikely ever to use again.

What we seek to do is to equip students with concepts and competencies that they need to make sense of their world, whether it's business, whether it's personal financial decisions, whether it's politics and deciding between voting for one party or another on the basis of their economic policies. What the literacy-targeted approach does, and what I want it to do, is to expose more students to the power of economic thinking, which means capturing more of those 80% one-and-done students.

To do that, I focus on the question—which I've already articulated: What should go into the only economics course that students will ever take?

Wolla: How did you get started in this area originally?

Cohen: I started teaching principles in the early ’80s and had been teaching for about 30 years. Then in the late ’90s, research began to appear on the principles course.

Much of this was done by three people. One was Mike Salemi, who was at the University of North Carolina at Chapel Hill. He was also the chair of the AEA [American Economic Association] Committee on Economic Education. Another was John Siegfried, who was a longtime secretary of the AEA, at Vanderbilt and also totally interested in education. And then, a little bit to a lesser extent was Lee Hansen, who was at Wisconsin; he was the one who started writing about what he called proficiencies, or competencies, that instead of focusing on what tools we want economists or introductory economics students to know—like: Should they know about indifference curves? Should they know about cost curves?—he said: What do we want them to be able to do? What proficiencies do we want them to have to be able to apply the economic way of thinking to the rest of the world?

Again, for your readers, in that same symposium that I mentioned, I have a paper that goes through the history of the LT approach, so that if people want more information, that would be a good place to look.

Wolla: We're going to take a quick break. But when we come back, Professor Cohen discusses how he uses the literacy-targeted approach in his own classes.

Andrea Caceres-Santamaria: Hi, I'm Andrea Caceres-Santamaria, an economic education specialist at the St. Louis Fed. If you're an educator, we know finding creative ways to engage your students can be a challenge. That's why we created Page One Economics. Each issue provides a short overview of a timely topic that offers students an opportunity to learn economics while using close reading strategies.

You can find Page One Economics at stlouisfed.org under Publications, then Educational Explainers. And while you're there, be sure to subscribe to our newsletter. Okay, let's get back to the show.

Wolla: Before the break, Professor Cohen explained how the literacy-targeted approach worked. We'll pick up the conversation with him explaining how he uses it in his own classroom.

Help me think about the difference between a literacy-targeted economics course and a traditional one-semester survey for noneconomics majors.

Cohen: I am so glad that you asked that question, because it's a question that I get all the time. And it’s a really important question, because what most people are used to seeing in a department offering is a traditional two-semester micro-macro intro sequence, and then there's a nonmajors course or a survey course. More often than not, that's a one-semester course, sometimes two semesters, but more often one semester.

If you talk to anybody who has taught one of those courses, it's almost a hopeless task. In 12 to 14 weeks, cover all of the basics of microeconomics and macroeconomics. All you can do is skim the surface. So in micro, you teach them a little bit about demand and supply, and efficiency. And then you teach them about measuring macro concepts like GDP, unemployment and inflation. But you never get to the bread and butter of what it means to think like an economist, and how to develop tools and apply them and test them—all the things that economists are really good at doing.

Another big, big problem with survey or nonmajors courses—and it's almost a fatal problem, in my opinion—is that they're dead ends. If you get a student excited in a survey course about taking more economics, they're effectively screwed because they won't get credit for that course. They usually have to reenroll in the introductory course, and there's overlap between that and the survey course. You're going to never get those students captured in terms of becoming majors.

So it's really important for a literacy-targeted approach or a literacy-targeted course, or sequence, to have a path to the major.

Wolla: One of the most common objections to the literacy-targeted teaching is the concern that students who go on to major in economics might be underprepared. You've written about this in your paper “A Pareto-Improving Way to Teach Principles of Economics: Evidence from the University of Toronto.” In fact, this was really valuable research. Can you describe the research project and the findings?

Cohen: I could. Let me start with the title, “A Pareto-Improving Way.” The motivation for that title comes from the fact that what we were hoping to find, and did find, is that we could make those 80% of one-and-done students better off without making majors worse off. It was a Pareto improvement relative to a preexisting condition.

As for the study itself, we were inspired—I did this with two colleagues at the University of Toronto—we were inspired by a 2012 article by Mike Salemi, whom I've mentioned, who worked on this paper with Donna Gilleskie, also at UNC-C. What Salemi did— Well, actually, let me just read you the title of their paper, which appeared in 2012, in the JEE: “The Cost of Economic Literacy: How Well Does a Literacy-Targeted Principles of Economics Course Prepare Students for Intermediate Theory Courses?”

There's your question. And that was the question that they addressed in that paper. They took data over three years covering 7,000 students at UNC-C. And there were—if I remember right—three sections of principles that were traditionally taught. One section was taught as an LT course; that was the section taught by Mike Salemi.

Then they went to intermediate theory courses, micro and macro, and compared the grades of the students who had taken the traditional intro courses with the literacy-targeted courses. And lo and behold, they found there were no differences.

So that was the paper that really inspired me. And I thought, okay, to get any acceptance for the literacy-targeted approach in the economics profession, you can't be making majors worse off, because that would be the reason for rejecting it right off the bat, and understandably so.

I had been teaching at the University of Toronto, starting sometime after 2010, a literacy-targeted course. That was a two-semester micro-macro course. It was an alternative to the traditional majors course at University of Toronto. And I could talk about some of the differences if you like, and if we have time.

But we had a data set, over 11 years with 13,000 students, and we could look at: For the students who went on from my course versus the students who went on from the traditional intro course, how did they do? We had data for intermediate micro, intermediate macro and statistics. And lo and behold, we got the same result as the Salemi-Gilleskie study that there were no differences, which means there was no disadvantage to majors of doing this kind of a course.

But then there was the advantage to all of those students who were in my course who didn't go on, who were one-and-done, who had content that was much more oriented to be useful for them.

Wolla: So, when you think about the course that you constructed versus the more traditional course, in real practical terms, how was your course different from the traditional?

Cohen: In some ways it paralleled the structure of a traditional course in terms of the set of topics. I did that quite purposely, because unless it can be recognizable to an instructor as something that resembles an economics introductory course, they're never going to use your work. Oh, and by the way, this course that I taught was based on a textbook that I wrote. So that's where that angle came in.

What I did, and what anybody who takes an LT approach does, is to strip down the number of concepts that you are including, which then allows you to make time for more pedagogically sound techniques of reinforcement, of exploration, of formative feedback, etc.

Let me give you an example of a difference. Elasticity is a crucially important concept. I focused on elasticity as percentage change in quantity divided by percentage change in price. I do not do the midpoint formula for calculating elasticity. I do not do midpoint formulas for other forms of elasticity. I totally emphasize the total revenue test, which your listeners will understand as really important for understanding business pricing strategy. But I let go of a lot of the technical details, because, at the end of the day, if this is the only course students are taking, what are they going to remember about the midpoint formula? What does that add to their understanding of the basic concept of elasticity?

That's one example. I could give many more. But a lot of these also are described in that same 2024 JEE paper.

So, it's clear that students who don't go on to major in economics benefit from a literacy-targeted course. You've done a great job of explaining how there's an emphasis on being able to apply the things on the competencies, but what about the students who do? You said the there's no difference in the research, but why do you think students who take an LT course and then end up in an intermediate course perform just as well as those who took the courses with more models—the more traditional approach?

Cohen: That's one of the most important questions. I mentioned some of the advantages in passing. Just to elaborate a little bit: There's extra course time devoted to mastering fewer concepts. That means there's a chance for repeated applications, repeated assessments that are aligned with course-learning objectives. All of that—as the pedagogical literature you know oh so well suggests—creates deeper and more durable learning.

So it sticks in a way that it doesn't if you're saying, “Okay, this week I've got to learn all the elasticity formulas. This week I have to learn all the different forms of market structure. This week I have to learn the three different macro multiplier formulas.” So if you strip those down to the basics, but then give them a lot more practice, it sinks in. We have no direct evidence that that's why they do as well, but that's certainly my hypothesis. That was also Salemi and Gilleskie’s hypothesis as well.

Wolla: That actually makes a lot of sense: stripping down the number of concepts, the amount of time you, as an instructor, have to spend on the midpoint formula and the many models that clutter what [George] Stigler called “The [Concise] Encyclopedia of Economics.” Right? That you can spend more time really using research, proven pedagogy.

In your writing, you ask: What should go into the only course that students will take. It's a great question. So I'm going to turn the question back to you. How do you answer the question when designing your own course?

Cohen: Okay. Hoisted by my own petard here, eh?

Let me talk about how I used to design courses and how most of us learned to design courses, at least most of us who are a little bit older. It used to be that you were assigned a course, let's say teaching principles. So, it's: What textbook am I going to use? And which chapters am I going to cover? The focus is first on: What's the content? And then everything else follows from that.

Well, if there's not much content, how much time do you have to cover each chapter? Probably not very much. And then what are you going to do by way of activities, and how are you going to test them on it?

In more recent years—and this is why I made the differentiation between older and younger people, or economists—there's the whole theory of backward design, the Wiggins-McTighe theory of backward design, that says the way I just described it is literally backwards. What you need to start with— This is what I now try to do, and I learned this by going to a teaching commons workshop, that exposed me to stuff I didn't know; this is where research can be really, really important in opening your eyes to new ways of doing things.

In backward design, you have to first start with: What do you want the students to know at the end of the course? And even more importantly—ala Lee Hansen and competencies: At the end of the course, what do you want the students to be able to do? How are you going to equip them to do stuff with the knowledge that they have acquired?

Once you focus on those learning objectives, then the next step is: What are the assessments and the exercises that we can use to help them develop those competencies? And also provide feedback both to the students and to us, the instructors, about: Have they mastered the competencies? Then after that, only last, do you choose the content that's going to help fulfill your specific learning objectives.

So what I do these days is nothing different from what's recommended in terms of, now it's called traditional backward design. (You live long enough and new things become old.) That would be the answer to your question.

Wolla: As an educator, what experiences have been the most rewarding?

Cohen: What I'd like to do is read you a little bit from a letter I got from one of my former students that I think sums it up pretty well. I know good teachers everywhere have received letters like this, so I'm not trying to call attention to myself. I'm just trying to call attention to how you can make a difference to students.

This is a student who took my literacy-targeted course three years ago. I never knew her; there were 700 students in the course. I got this email out of the blue because she was in an upper-level course with a colleague whom I know, and the subject came up, and the colleague said, “Why don't you write to Cohen and tell him?” So this is what she wrote:

I wanted to thank you for fundamentally changing the trajectory of my life. After I graduated high school, having never taken math beyond the 10th grade, I came to U of T to pursue history and classics. I only took economics on a whim because my high school never offered it, and I thought I should pick up a random life skill in first year.

By week five of the semester, I was reading ahead in your textbook for fun during every single history lecture. By the end of October, I knew that econ was the only thing I wanted to do for the rest of my life. I wanted it and loved it badly enough that catching up in math that summer and fighting for my life in the stats- and calculus-based intermediate courses the following year wasn't daunting in the slightest. It was just what I had to do, and I had fun doing it.

One more paragraph.

None of this would have happened without your course, and I can't thank you enough. I have no idea where I'd be without finding “my thing,” and quite honestly, I'm scared to think about what my life would be like if I were still pushing through history. No offense to historians. It really was the way you taught economics as a method to navigate life and make smart choices. It literally changed everything. Thank you again for getting the ball rolling for me.

As a teacher, you live for these kinds of letters. I know all good teachers have received them. For me, that's what it's all about. It's about making a difference in people's lives.

Wolla: That's awesome. That was really powerful. Given the fact that one of the appeals to economics for you was the opportunity to make a difference, and then, obviously, you're making a difference in the lives of your students. That's a testimony to just that.

Do you have any final thoughts or advice for fellow economic educators?

Cohen: Yeah. You should take pride in teaching introductory economics. And I'm saying that for a number of reasons. Not all, but some research-oriented economists look down their noses at people who teach introductory economics: “Oh, you don't do anything that's technologically sophisticated. You're not up to date. You don't publish in academic journals. You're not quite a first-class citizen.”

Now, let me address those—what I think are—misconceptions. First, “you're not technical.” If you look at economic analysis in The Economist magazine, in The Wall Street Journal, in The New York Times, you will never see a mathematical equation, and you will never see an abstract graph. And yet, somehow, those publications do a pretty good job of doing economic analysis. So the technology, the technique is not everything.

Second, “your value compared to people who do research.” Let me tell you a personal story about that. When I was a young assistant professor, I was very concerned about getting my work published in academic journals because I envisioned it as a kind of immortality, that I had done something that was now sitting in the library forever. I had increased the knowledge of the human race in a tangible way. So that was really important to me. And I published a lot of research stuff, which I'm still proud of. However, over time I came to realize how few people would ever read those articles, let alone be influenced by them.

Now, compared to that, if you think about what you do as a teacher of introductory economics. Each year, or if you look at your whole lifetime of teaching, you teach and probably influence thousands and thousands of students. This is what I call your academic footprint: You can teach them to think smarter. You can teach them to make better choices. You can teach them to make better decisions as citizens. So albeit in a small way, each student that you reach can change the world.

If you ask almost anybody: “Who was the teacher who influenced you the most?”—you asked me that question when we started—everybody has an answer to that question. Everybody can specify somebody who was a teacher who made a big difference. That is your academic footprint as a teacher of introductory economics. So take pride in that footprint.

It's not a competition, but that footprint, chances are, is a lot broader than the footprint of most research economists. Research is important. I talked about how the research by Salemi and by Siegfried made a big impact on me and helped change my life. But so is teaching.

Wolla: That is really powerful and so true. Those are really words to live by for economic educators.

Professor Cohen, thank you so much for taking the time to speak with me today. And thank you for your contributions to economic education.

Cohen: Thanks for having me, Scott. Pleasure.

Wolla: Thank you for listening to my conversation with Avi Cohen. If you like this show, please subscribe anywhere you get podcasts, and be sure to leave us a review. Each one really helps. I'm Scott Wolla from the St. Louis Fed. You've been listening to Teach Economics.