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Active learning in macroeconomic principles.


Several scholars of economics education suggest 'active learning techniques' as more effective than the traditional lecture method of teaching economics. The Coast Guard Academy's core economics course became more oriented towards active learning with the introduction of learning teams, discussion modules, and writing and group exercises into its pedagogy Fall 2001. The paper places the experience in broad contexts of general and military education, and explains its basic structure and results.


It is generally recognized that most members of arts and science faculty in American universities are satisfied with the traditional lecture method of teaching, and therefore hardly experiment with any different pedagogical technique. This is true in economics departments as well. Most academic economists consider it more satisfying and rewarding to do research in their narrow field of specialization rather than in pedagogical issues of their subject. The sentiment is understandable because, usually, such research is an extension of their graduate work, and therefore the terrain is more familiar and rewarding than any unknown path. However, this does not offer much help to improve their undergraduates' grasp of economics, or to ameliorate their fear of the subject. (Benedict, M.E. 2002). What is more ominous to economics education is that the same trend is spreading through an increasing number of undergraduate economics departments of four-year colleges as well. (Beeker. 1997)

The Context


Many scholars attribute the declining attention to economic education to a decline in the share of undergraduate economics courses relative to graduate courses, and to the undergraduate faculty's growing perception of a "need to demonstrate they behave like faculties in graduate programs" (Becker. 1997, 1349). As Becker noted, such a faculty attitude did not appear in a vacuum. It has been sanctioned, and even encouraged, by almost half a century of shifting intellectual foundations of higher education, away from their liberal arts moorings, and closer to education and training in the professions. A proliferation of professional programs like business, law and information management in most universities and colleges, an increasing trend in name-change of many liberal arts institutions from 'college' to 'university' (thus suggesting a change in the focus of their mission from teaching to discipline based research), and a substantial increase in the research funding allocated in the institutional budget, all point to declining attention to the scholarship of teaching. Faced with a shrinking pool of potential student applicants, an increasing number of these programs seek greater legitimacy thorough accreditation, and it too has intensified the pressure on faculty to reallocate their time in favor of discipline based research, further reinforcing this trend. In all likelihood, the relative homogeneity of the cultural and academic background of economics faculty too helped to maintain the statusquo ante. According to the Becker Watts Survey of 1996, an undergraduate economics teacher is a male (83%), Caucasian (89%), with a Ph.D degree (86%), "lecturing to a class, while he writes on the chalkboard and assigns reading from a textbook...." (Becker 1997, 1354). With the average teacher devoting 83% of the class time to lectures, without hardly any use of audio-visual tools or computers, he continues to be the central actor in a "passive learning environment that does not engage students" (p. 1354). Many others researchers also have recognized an identical picture. For example, see: Siegfried, John J. and Fels, Rendings. 1979.

Much of the burden of this trend is felt in the teaching of introductory economics. In many cases, such a course is left to the relatively inexperienced faculty members, more determined to improve their tenure chances than teaching effectiveness. In addition, because teachers of introductory economics courses are required to meet essential conceptual prerequisites of some of the upper level courses in economic theory, the minimum threshold of coverage in their syllabus is normally higher than that of most elective upper level courses. This too militates against introducing new and time-consuming teaching methodologies in these courses.

Given these constraints, it is no surprise that most teachers of introductory economics consider the traditional form of lecturing the most efficient method of teaching. Besides, because most teachers engage in some discussion, and even some Socratic questioning, they tend to be reasonably satisfied with the level of student engagement in their classes. Yet, economics department chairs complain of decreasing enrollments in their majors, and declining student interest in their courses. This has been the case particularly since the early 1970s, when business schools began their phenomenal growth, and provided potential economics undergraduates with a more practical and appealing alternative.

Military Academy

A military academy environment further compounds many of the problems discussed above. Because professional and physical activities occupy a good portion of cadets' time, they are constantly under pressure to manage their time more efficiently than most of their civilian counterparts. However, as academic and professional training pressures mount, like most undergraduates, they too maximize their 'grade yield' by selective inattention to certain courses, particularly those that are part of the general core curriculum, but outside their majors. In many cases, this includes an introductory economics course. The issue of coverage also is more complicated in a military academy. Since the vast majority of cadets majoring in programs outside of economics and management are likely to take only one economics course, most economics teachers try to cram the course with topics that they consider essential for a career in public service. This means that, usually, the introductory economics course, whether focused in microeconomic or macroeconomics, will have some essential components of both.

Active learning to the rescue?

Even if all of such student disinterest cannot be attributed solely to pedagogical issues, many teachers of introductory economics have been searching for more effective ways to teach their courses. One commonly accepted suggestion is to transform economics pedagogy from traditional lecture format to more active learning experience. Although a pedagogy emphasizing active learning does not necessarily result in better grades for students (Kvam, 2000), it is considered more appealing to the average student. Thus, the hope is that active learning techniques will address the problem of student apprehension of economics, and will help in their broader understanding of the subject in relation to the world around them. Probably more importantly, active learning strategies are recognized to promote critical thinking, "the purposeful-outcome thinking that requires knowledge, skills, experience, inquisitiveness about the reasons behind actions, and sensitivity to emotions (of others and ones own)" (Youngblood and Beitz, 2001.39.)

Before we proceed further, let us consider what we mean by 'active learning'. In fact, the concept defies a clear definition. There are teachers who believe that any learning is active. They think that any learning can take place only if the student deliberately wants to learn, and therefore the process of learning presumes active student engagement. Although student willingness is essential for any learning, most teachers would agree that 'willingness' and 'active involvement' are not the same. Probably, it is useful to think of learning as a continuum from no student involvement (student sitting in class, partly daydreaming or even half asleep) to very active involvement in which the student takes all initiatives in exploring the meaning of the subject matter independently or with the help of the instructor. For our purpose, all activities initiated by the instructor in promoting students' active involvement in their education are recognized as 'active learning'. In this sense, active learning is the result of 'active teaching' where teaching entails activities other than traditional lectures. A 1991 ASHE-ERIC Higher Education Reports (Bornwell and Eison, 1991) lists the following characteristics of active learning in the classroom:

* "Students are involved in more than listening.

* Less emphasis is placed on transmitting information and more on developing students' skills.

* Students are involved in higher-order thinking (analysis, synthesis, evaluation).

* Students are engaged in activities (e.g., reading, discussing, and writing).

* Greater emphasis is placed on students' exploration of their own attitudes and values."

Economics Course at the Coast Guard Academy

At the Coast Guard Academy, an introductory economics course is part of the general education core. As discussed earlier, the Academy too faces all problems that such a course confronts in most highly selective colleges and other military academies campuses. Cadets generally perceive it demanding, a 'curve buster', and somewhat tedious. Historically, the course has been taught through the 'lecture-discussion' method.

In order to add greater student interest in the course material, the coordinator of the course decided to emphasize 'active learning' in his classes in Fall 2001. The lecture format was still retained; however the time spent on lectures decreased considerably in favor of increased student in-class involvement, usually in small groups. The course involved four separate sections with a total of 76 students.

From the outset, the instructor's one concern was not whether, but how to incorporate all five characteristics of active learning individually in the pedagogy. After several false starts at structuring different academic exercises to uniquely serve each characteristic, he decided to focus on all of these elements collectively, providing a holistic structure to most exercises. Essentially, this amounted to recognizing active learning simply as anything that "involves students in doing things and thinking about the things they are doing". (Bonwell and Eison. 1991, 2.) However, within the broader framework of academic and leadership outcomes of the management department and the Academy, exercises were designed to promote four of the major academic and leadership outcomes: writing, critical thinking, teamwork, and global awareness. In order to facilitate active learning, the class was divided into teams of three. The assignments included:

* Team exercises (quiz) in class. Graded.(Team grade).

* Team Homework (Team grade)

* Individual Homework with possible help from team members. (Graded)

* Individual Quiz (Graded)

* Team Currency Trade Exercise. (International; graded)

* Individual News Reviews (2). (Graded)

* Team discussion of 'what do you think?' (Ungraded)

In the first class, students were asked to elect a class manager who was responsible to bring any student concern or need to the attention of the instructor. Also, they were asked to bring their nametags and place them in front, so that the instructor and students could recognize each other personally. (This was more for the benefit of the teacher). Every 5 weeks or so, an identical questionnaire was administered in the class to measure student perceptions about the course and its activities. Part 1 of the questionnaire (first five statements), concerned student interest in the subject and instructor behavior in class, and they were taken from the department's questionnaire for semester-end evaluation of courses. The rest (Part 2) of the questionnaire related student reaction to active-learning instruments in the course. Few of the examples of exercises used in the course are given below.

Examples of in-class group exercises

1. True or False? Explain. During the period of Viet Nam conflict, the U.S. military drafted first young men who were not in college, then the undergraduates, and then only those who were in graduate and professional schools. Such a policy is justifiable because it minimized the opportunity cost of the war on the U.S.

2. True or False? Explain (Consider each part of the following statement separately).

A. An increase in the price of luxury sedans like Mercedes Benz and BMW has increased the price of their substitute brand produced by Luxus,

B. Which, in turn, has increased the supply of Luxus, and lowered its price back to its initial level.

C. However, an increase in the price of gasoline increased the demand for Luxus cars which, in turn, helped to keep their price at a high level.

3. Answer following questions on Coastland's economy.

In Coastland, consumers spend according to the equation: C = 100+0.8(Y-T), investment is 500, government purchases are 500, exports are 300, imports are 400, taxes are fixed at T=500, and the price level is fixed.

a. What is the equilibrium level of GDP. If full employment level of GDP is 3,200, what is the value of the inflationary or a recessionary gap?

b. If the neighboring countries increase their demand for Coastland's exports from 300 to 400, what is the value of Coastland's new equilibrium GDP?

c. What is the value of the new multiplier?

d. Now, the citizens of Coastland change their spending habits on imports from a fixed amount of 400 to Imports = 250 + 0.05Y. What is the value of the equilibrium GDP?

e. What is the value of the new multiplier?

f. If the value of the multiplier is different prom the previous one ((c) above), explain the economic logic behind the difference.

g. What is the budget surplus or deficit and the trade surplus or deficit at the equilibrium GDP?

Example of semester-long out-of--class group project

The class is divided into currency trade-groups, each consisting of three students and with an initial capital of $100 million in Wise Guys Island money. The group's task is to maximize its earnings through currency transactions. The following rules apply:

a. Minimum number of transactions is 3, and the maximum is 6.

b. The maximum number of currencies in any group's portfolio is limited to a total of three (excluding the dollar).

c. Each transaction will cost an agency commission of 0.01% of the dollar value of the transaction.

d. Only a maximum of two transactions can be made in one month.

e. The prevailing exchange rate is the spot rate (closing mid-point) published in the Wall Street Journal, usually on Wednesdays in Section C or in Financial Times, usually on Thursdays in page 19.

f. The first transaction report should be submitted on or before October 15th in Fall and February 15th in Spring, the second report on or before the 30th of the following month, and the last one on or before 5 working days prior to the last day of class.

g. A written transaction report (maximum 2 pages, double spaced) will be submitted in class, along with a copy of the Wall Street Journal page containing the current exchange rate, on the 1st Monday following the transaction. Each member of the group shall take turn in writing a minimum of one report. (Although one member is responsible for writing the report, the report itself is treated as a group project, and all members of the group are deemed responsible for its quality). The report shall consist of:

* The names of all members of the group on the right hand corner of the 1st page, with the name of the 'writer' of the report underlined.

* The amount of transaction, the exchange rate, the distribution of total portfolio, its current net dollar value (net of the commission amount).

* A clear explanation of the reason(s) for the transaction. (This explanation is the most important part of your report. Explain the factors, and the economic logic, that prompted you to make the transaction).


As some of the examples suggest, many of the in-class group exercises were used to generate group discussion rather than to elicit a unique answer to a problem. However, more than half of them, like examples 2 and 3 above, were aimed to highlight the meaning and mechanics of important analytical concepts. Semester-long group exercises like the 'currency trade' were time consuming, but focused on at least two of the four Academy outcomes that the course was to address. The questionnaire revealed no change in student perceptions either of the course or instructor behavior (Part 1 of the questionnaire), compared to previous semesters when only minimum active learning techniques were present. However, although no data were available for comparison, results of part 2 of the questionnaire revealed almost universal enthusiasm for in-class group work, but not as much for out-of-class group work. In fact, several of the more motivated students were openly hostile to the idea of group work (particularly, out-of-class) because they felt that they were carrying the bulk of the load of those assignments without commensurate reward, suggesting what economists call a 'freerider problem'. Despite the change in pedagogy, the type and structure of class examinations were kept the same (multiple choice questions, numerical problems, and short essays) as in previous semesters. Probably because of this, the cumulative examination grade remained virtually unchanged.

Lessons Learned

This one-time experience with a heavy emphasis on active learning measures in Macroeconomics Principles suggests several lessons.

* Students who are self-motivated tend to like teamwork less, particularly if their course grade is influenced by it.

* Instructions and guidelines for teamwork should be very clear and specific. Lack of specificity and clarity results not only in diverse outcomes, but also less satisfactory performance in projects. Every active learning experience must have a specific purpose in terms of the expected learning outcomes.

* Clearly, the amount of material covered in the course is much less than that covered in a standard course.

* Active learning techniques do not necessarily improve student performance as measured by class grade. An average examination grade, almost identical as the one in the previous semester reinforces similar finding observed by previous researchers (Kvam. 2000). How ever, this is not to suggest that 'learning' did not improve. Because students' overall liking of the course improved significantly, and they tend to understand more about subjects they like and care about, it is possible that they developed a greater appreciation of the importance of economics in understanding the world.


Active learning methods are effective in improving student liking for macroeconomic principles. However, they consume significant amount of class time, and therefore can be properly introduced only if the instructor is will to accept the tradeoff between student interest and course coverage. As we noted earlier in this paper, the issue of coverage may be sensitive in an introductory economics course in a military academy because of pressures of prerequisite needs, and the perceived need to provide future military officers with a conceptual understanding of the American economy. Therefore, the suggestion by Salemi and Siegfried to redesign a "one-semester Principles course instead of the standard micro-macro pair" (Salemi and Siegfried, 1999, 367) seems highly appropriate for military academies. This will eliminate the pre-requisite constraint of the course content, and at the same time, increase cadets' interest in economics, and improve their perception of its relevance to their intellectual development as future military officers of the United States.


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Cameron, B. (1998) "Active and Cooperative Learning Strategies for the Economics Classroom". In Walstad, W.B and Saunders, P. (ed) Teaching Undergraduate Economics: A Handbook for Instructors. Boston: Irwin/McGraw-Hill.

Carver, C. A; Howard, R. A, and Lane, W. (1996). "Active Student-Controlled Learning: Reaching the Weakest Students". Liberal Education (82) 3.

Keyser, M. W. (1999) "Active Learning and Cooperative Learning: Understanding the Difference and Using both Styles Effectively" Research Strategies. (17) 1.

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Marbach-Ad, G; Seal. O. and Sokolove, P. G. (2001). "Student Attitudes and Recommendations on Active Learning". Journal of College Science and Technology (30) 7.

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Roueche, Susanne (1984). "Team Learning in Large Classes". Innovation Abstracts (6) 10.

Salemi, M. K, and Siegfried. J. J (1999) "The State of Economic Education". The American Economic Review (89) 2.

Siegfried, J. J. (2001) "Principles for a Successful Undergraduate Economics Honors Program". The Journal of Economic Education. (32) 2.

Siegfried, J. J. and Fels, R. (1979) "Research on Teaching College Economics: A Survey". Journal of Economic Literature; Sept 1979, 17 (3)

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P. I. Mathew, United States Coast Guard Academy

Mathew, Ph. D, is a professor of economics and the coordinator of the Academy's core economics course.
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Author:Mathew, P.I.
Publication:Academic Exchange Quarterly
Geographic Code:1USA
Date:Jun 22, 2004
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