Bryan Caplan  

What's Wrong With the Macro AP

Allan H. Meltzer, RIP... Supply-Side Medical Reforms...
Today my 8th-grade homeschoolers take the Advanced Placement test in Macroeconomics.  Back in 1989, when I took this exam, it covered little more than 1960s Keynesianism.  The current test is marginally better.  Now we've got long-run Aggregate Supply curves and long-run Phillips curves to remind students that pumping up demand has clear long-run dangers and little long-run benefit.  But this AP is still far worse than it should be. 

The biggest lacuna: There's essentially nothing on the fundamental question of macroeconomics: Why are some countries rich and others poor?  Short-run macro stabilization policy questions outnumber long-run growth questions by at least 20:1.  Part of the reason is probably the legacy of Keynesianism: "In the long run, we're all dead."  But the main reason is that the test writers fear to be empirical - even when the empirics are clear.  Saying, "Economic freedom is a major cause of development" just sounds too ideological, even when the statistics are pretty clear and the natural experiments are crystal clear.

The essay portion of the test is especially defective.  The history AP essays demand high-level understanding of the world.  A typical U.S. history question would be, "To what extent did slavery cause the Civil War?"  The econ AP essays, in contrast, test mid-level understanding of models.  A typical macroeconomic question:
Suppose Rankinland has a current account deficit. Rankinland's currency is called the bera.

(i) What will initially happen to the current account deficit in Rankinland solely due to the change in the real GDP from part (b)(iv) ? Explain.

(ii) What will happen to the international value of the bera solely due to the change in the real GDP from part (b)(iv) ? Explain.
This is fine material for the multiple-choice section of the test, but the essay ought to tap students' ability to apply the concepts to a complex real-world economic problem.  For example, you could give students six documents and statistical series about the Venezuelan economy for 2012-2017, then have them explain what's going on.

Too hard to grade?  Historians bravely rise to the challenge, why can't we economists do the same?

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COMMENTS (8 to date)
John Hall writes:

I don't know, the AP exams are fairly consistent with my experience of intro macro/micro in undergrad. In fact, I don't recall my macro classes in undergrad or grad school spending much time at all on long-run growth, and if they did it was purely a Cobb-Douglas-like approach where the only things that mattered were labor, capital, and technology. Economic liberty was rarely ever discussed. In fact, I recall failing an MA international trade final for saying that China could get richer by freeing up its economy.

Dylan writes:

I'm just surprised to find that there is an 8th grade AP Macroeconomics exam and that you took it in 1989. I went to one of the better public schools in my state and had zero economics classes, AP or otherwise until college.

IB Economics Teacher writes:

You are essentially describing the IB Economics test in which students need to apply their knowledge to the world. Why did you choose AP instead of IB?

Daniel Klein writes:

Thanks for this.

Very apropos to my household. Yesterday my 15 yr old daughter was telling me how her professor explained that poor countries are poor because they are exploited by rich countries.

Rich countries buy up their resources at low prices, and then sell them finished products at high prices.

"Dependency theory."

I am in Sweden, this is Sweden.

The whole class swallows it whole.

When my daughter comes home from school, I ask her matter-of-factly, "What leftist drivel did they tell you today?" And everyday she has some to report. She sees that what they teach her is crap, but doesn't fight it. She has t regurgitate it back at them to get into a good gymnasium (like high school in the US).

The entirety of Swedish youth is being taught such leftist drivel. Most all the teachers are leftist. I discuss the problem here.

I suppose it's not much different in a large portion of the schools in the United States.

blink writes:

Toward the end of better-designed tests, I think the stumbling block is economists. The College Board wants their exam to be accepted as widely as possible for college credit and so test the material and processes that colleges test in corresponding courses.

The AP exams reflect current college practice; if you want to improve the exams, talk to university colleagues who teach introductory courses.

Toby writes:
Too hard to grade? Historians bravely rise to the challenge, why can't we economists do the same?

Economists know the signalling model and care about welfare maximization. Given that most students will forget what they've learnt there is no point put in the extra effort in grading such questions. ;-)

Mike Sproul writes:

"the fundamental question of macroeconomics: Why are some countries rich and others poor?"

I would have said that's the fundamental question of MICROeconomics: That's why Adam Smith called his book "An Inquiry into the Nature and Causes of the Wealth of Nations."

Macro, in contrast, is about income, employment, and the price level.

BillD writes:

@Dan Klein -

That attitude exists in spades in US big city schools too.

My 1st grader asks about the light bulbs I use as I've been changing CFLs to LEDs. She asks if the light bulbs I'm getting rid of are the ones that are bad for the earth. Of course, she's almost certainly talking about incandescent bulbs, of which there have been few of since she has been alive. And I don't tell her the mercury containing CFLs need to go to a special facility to minimize their "cost to the earth."

One funny thing is they actually did a series on economics where they introduced concepts of wants vs. needs.

It's too bad that tradeoffs are not recognized or taught in so much of the rest of the curriculum, even at a 1st grade level.

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