Wednesday, September 21, 2005
At my alma mater, they taught the same class in a way that totally spoiled me for the purpose of working at most other schools. In a rare (for academia) fit of common sense, they realized that you can teach a lot of topics poorly, or a few topics very well. So, they limited the introductory course to a few critical concepts (like time value of money, how to read financial statements, how to value a security, etc...), but completely beat these topics to death.
Economics professors know this, and have been talking about it for years. Yet text books continue to grow. A paper I wish we would do some day: What is the change in the length of a principles of economics text from first to second edition, second to third, etc.? I have yet to meet a book publisher representative who said to me that the "third edition of Smith and Jones' econ text has removed 15% of its pages to focus on just what matters." What happens instead is someone writes a new book that is shorter; some faculty adopt it; the feedback comes that sales grow if you add more stuff; next edition is 10% larger; rinse and repeat.
Don't blame the authors or the publishers: They are responding to market demand. Our demand, the same professors who keep publishing papers and pontificating on blogs saying we need to just focus on a few principles.
Cognitive dissonance? Maybe. So I don't know if even the author of Financial Rounds believes what he writes. But he's right nevertheless. Besides, anybody who uses Five Minute University in context needs to be linked, often.
FMI, read this conversation between Russell Roberts and Bill Polley before WSJ expires the link.