A handy rule of thumb is that every new hire in an Australian economics department should be comfortably able to teach exactly two of the following courses:
- Third year Microeconomic Theory.
- Third year Macroeconomic Theory.
- Third year Econometric Theory.
More than two indicates that the courses may be too easy. Only one: too specialised or hard. And none–well your new hire is perhaps comfortable contributing to demography or sociology or psychology or history curricula-but not to economics.
I’m scared of teaching third year microeconomics in any of our good departments in Australia. I have taught it on and off for almost a decade and I struggled with it early in my career. There were years when I gladly traded my class of 60 third year students for a first year class of 600. I was even willing to become the head of our department if in return I did not have to teach third year micro. I’m now back in the third year hot-seat but I think that this year I have found the winning formula.
You see, third year micro sits uncomfortably between a standard second year intermediate microeconomics course and our glorious fourth year Honours micro course, which is as rigours as any first year PhD Microeconomics (A) course [Princeton but with proofs, Rochester with economics] . This year’s fourth year Honours micro is based on Paul Milgrom’s PhD course notes and has a number of textbooks including the ubiquitous “Encyclopaedia of What Every Young Economist Should Know” by MasColell, Winston, and Green. One aim of third year microeconomics is to bridge the gap between Varian’s intermediate micro and our Honours micro, but in addition third year micro is likely to be the last microeconomics class taken by many of our majors who don’t do honours but complete other degrees, like law, mathematics, and engineering.
I have struggled for many years to find a good textbook for third year microeconomics. This year I’m experimenting with Ariel Rubinstein’s textbook Lecture Notes in; Microeconomic Theory; The Economic Agent, which can be easily downloaded from The Pirate Bay. This textbook is based on the author’s lecture notes for the first term of a PhD microeconomics course taught at Tel Aviv, Princeton, and New York universities. Of course, I have had to extensively adapt the materials in the textbook. The chapters in this textbook are short and to the point, the writing style is interesting and fun, but the exercises are outrageously difficult.
Pedagogically, for an undergraduate course, the textbook is also lacking in a fundamental way. It is entirely bereft of geometric intuition. It seems that the author gave up on trying to work with LaTeX’s graphing modules. There is a long and rich geometric tradition in economics. In any third year undergraduate class every proof ought to be accompanied with a graph and in most instances a picture can entirely replace a formal proof. Every economic concept is associated with some sort of geometric intuition and most definitions can be well explained by means of a diagram.
For this reason, most of my time this semester is being spent on articulating Rubinstein’s textbook geometrically (and of course writing exercises that are solvable in reasonable time for the chapters that we cover). And I’ve thoroughly enjoyed bringing geometric intuition to each economic idea.
An important part of an education in economics is nurturing geometric thinking. Many areas outside of economics, even those that use the same tools as us–say probability and statistics–are in my opinion lacking in terms the richness that is uniquely afforded by diagrams, graphs, and pictures. Indeed, when my late coauthor Roko Aliprantis and I wrote our highly specialised second year PhD level textbook on pointed cones we sought to imbue the narrative with geometry in keeping with a long tradition of this in economics. In some sense the geometric culture in economics was allowed to bring some life, colour, and fullness to a very abstract area of functional analysis.
In short, when teaching third year economics remember that every idea has at least one diagram and every proof has a graphical narrative. And please when the Chair of the Teaching and Learning Committee softly and gently begs you to teach one of the core third year courses, don’t rebuff him/her/me with a “they’re not in my area.”