What should be taught more in the first-year graduate sequence in economics?
Or maybe just taught more period? For microeconomics, I have two very definite picks:
1. Price discrimination. They do it to you more and more! Or perhaps you are striving to do it to others. This is typically covered in a first-year sequence, but how many second-year students really have mastered when it is welfare-improving or not? How it relates to product tying? When it is sustainable against entry or not?
This seems like a highly relevant real world topic covered only in passing, noting that at the Principles level Cowen and Tabarrok give it full attention.
2. Tax incidence. Covered thoroughly in public finance sequences, but usually only in passing in first-year sequences. But just about everything is a problem in tax incidence! Any change in relative prices gives rise to tax incidence issues, and aren’t relative price changes central to economics?
How can you analyze minimum wage economics, for instance, without a strong background in tax incidence theory (and empirics)? What if someone says “that minimum wage hike — the associated gains are just captured by the landlords!” Right or wrong? Under what conditions? Good luck!
Grad students these days aren’t learning enough micro theory.
And for macroeconomics? I have a definite nomination:
3. Say’s Law. Yes I have read Keynes, and furthermore John Stuart Mill understood as early as 1829 that Say’s Law doesn’t hold if there is a big increase in money hoardings. But often there isn’t a big increase in money hoardings! And then what people call “increases in aggregate demand” very often are more fundamentally “increases in aggregate supply.” Long-, medium- and short-term considerations to be tossed in as further complexities. Ngdp boosts can come through either nominal or real variables, etc.
There are still lots and lots of people — at all levels — who don’t have a firm handle on these matters. And Twitter has made this worse.
Which topics do you think should be given additional coverage?