Professor Peter Schott
Professor of Economics
The best way to learn economics is to practice. I show a lot of data in class. I might put up a scatter plot and ask students for the story that it tells.
We live in a global world where all day long we’re being bombarded with information about inflation, gold prices, credit spreads in Europe, the labor market in the United States, demand falling in China. There’s almost no way to avoid being touched by the global economy. Even if you work for a small firm in a small town, some customer or supplier is going to be hooked into the global economy, meaning you have to understand global trends.
My Global Macro course starts by defining the vocabulary and the concepts. But the best way to learn economics is to practice. I show a lot of data in class. I might put up a scatter plot and ask students for the story that it tells. It sounds more scholarly if I say, “What’s your theory?” but really, what I’m asking is, can you think logically about what’s tying these disparate data points together?
It gets more complicated when it’s not just one graph but a real-time event like the Great Recession or the European crisis. But it’s the same process: can you tell me a story, based on the models and frameworks that we’ve discussed in class, that makes sense of the various actors and the various parts of the economy?
In the process of telling and refining those stories, you build up intuition for how the different parts of the economy fit together. Eventually, when you see dueling editorials about why Europe’s a mess and what can be done about it, you can infer the assumptions they are making and have an informed perspective on whether they are accurate, and how the situation is likely to impact global business.