Thursday, September 9, 2010

Post-Crisis Changes in Principles of Economics Texts

Many have written about how the introductory economics textbook should change as a result of the crisis.

In November 2008, one year after the crisis started, I addressed this question in a practical way when Mike Worls—economics editor at South-Western Cengage, publisher of my principles text with Akila Weerapana—asked if we would write a new crisis edition of our book. We agreed, started work immediately, and published the first post-crisis principles of economics text in the summer of 2009, with such additions as the role of government in the crisis, quantitative easing, zero bound on interest rates, small impact of the 2008 fiscal stimulus, moral hazard, housing bubbles, etc.

Then, two years after the crisis, Alan Blinder addressed the question at the American Economic Association meetings last January explaining how he would change his textbook by, for example, giving more emphasis to short run Keynesian issues and adding in securitization.

Now, three years after the crisis, Paul Gregory addressed the question in a new thoughtful post on his blog. Paul’s piece benefits greatly from the additional evidence that the 2009 stimulus packages had little effect with unemployment still quite high three years after the crisis began. He takes a decidedly non-Keynesian approach, reinforcing his earlier textbook with Roy Ruffin.

Soon Akila and I will be doing another edition with the benefit of even more information, perhaps the first second-edition post-crisis principles of economics text.

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