The Deficient Treatment of Money in Basic Undergraduate Texts: An Opposing View: Comment

Abstract

In a recent comment [ 1 ], Samuel C . Webb raised some questions concerning the emphasis and content of undergraduate principles texts. We agree that, generally, the treatment of money is thoroughly inadequate in principles texts. We also recognize that more graphical emphasis has traditionally been given to fiscal policy, and we acknowledge the importance of demonstrating the interrelationship between fiscal and monetary policy. And finally, we accept the prescription that money and monetary policy be given their rightful place in an introductory economics course. However, we do not agree with Professor Webb that Hicks-Hansen or IS-LM analysis is the solution. Hicks-Hansen analysis is not the answer because (1) contrary to his view, it is an extraordinarily difficult concept to teach at the principles level, (2) there are other, better, and simpler tools available which accomplish the same purpose in less time, and (3) we have to act like economists and make sure that within the limited number of contact hours available in the average principles course we maximize the amount of economic understanding our students obtain. The introductory course is not the place to break new theoretical ground, nor is it the place to present the latest developments and theoretical refinements. We realize that Hicks-Hansen analysis is by no means the latest development. It is, however, about as far as economists have pushed macroeconomic analysis unless dynamic adjustment models are included. What Professor Webb seems to overlook is the level of sophistication of the average introductory student and the purpose of most introductory economics courses. We ought not to be trying to produce junior economists in the principles course. Rather, we should be attempting to improve the level of economic literacy of our college graduates. Only a small number of the students in introductory economics courses will major in economics. There is plenty of opportunity and lots of time to teach our majors the intricacies of IS-LM analysis. The question is whether or not the majority of students in our principles courses will