The Department of Economics at the University of Massachusetts - Boston is part of the College of Liberal Arts. We share with other departments in the College the goal of helping our students attain a liberal education of the highest quality. We want our students to learn to analyze effectively the society and natural world in which they live, to acquire a critical appreciation of the arts, and to develop high quality communication and quantitative skills. We believe such a broad set of capacities and skills will help them to be active and able citizens, to manage their own economic well being, and to contribute in numerous ways to society.
In addition to these general goals, the Department of Economics has a number of particular goals. Different courses contribute to these goals in different ways, and most courses will be directed toward only a subset of these goals. Yet the combination of the general goals of the College of Liberal Arts and the particular goals of the Department of Economics helps us organize our curriculum and develop our individual courses in ways that will be of greatest value to our students. The particular goals of the Department of Economics include (in an order that does not imply an order of importance) the following:
- We want our students to understand economics as a social science. Economics deals with the relations that develop among people in their efforts to meet their material needs. Its focus is on the social relations surrounding the problems of the allocation of scarce resources, production, exchange, and distribution. Furthermore, in their efforts to deal with these economic problems, people affect and are affected by a wide range of social and political phenomena. Thus the understanding of economic issues should be embedded in a broad approach to social analysis.
- We want our students to develop a familiarity with the basic methods of economic analysis and to be able to apply these methods in their own efforts to analyze economic issues. For us, the basic methods of economic analysis include the following:
Understanding economic choices in terms of alternatives. Whether in explaining why people make the economic choices that they do or in attempting to determine optimal economic choices in various situations, it is useful to view alternatives in comparison with one another and recognize that the value of a particular choice can be understood in terms of its comparison with the other opportunities that exist. In this way of approaching choices, the concept of "opportunity cost" is especially helpful; opportunity cost defines the cost of a particular choice in terms of the losses incurred by not choosing the next best alternative.
Understanding economic choices as attempts to maximize subject to constraints. Much economic analysis is concerned with the general problem of how economic actors -- individuals, groups, firms, governments -- try to obtain their goals when they are constrained by scarce resources. The very fact that they "can't have it all" forces them to make choices among alternative goals and among alternative ways to achieve these goals. Understanding how these choices are made -- how economic actors maximize subject to constraints -- generates useful insights about economic behavior.
Understanding trade-offs. Viewing economic choices in terms of alternatives and as attempts to maximize subject to constraints leads directly to the fact that different goals may be in conflict with one another. Both economic behavior and economic policy confront the need for trade-offs among conflicting goals. How much of one desirable thing must be sacrificed in order to obtain more of another desirable thing? What determines the extent and nature of these trade-offs? When can trade-offs be transformed into complementarities? These sorts of questions and the insights that arise from them are an important part of economics, in problems ranging from personal choices among stereo systems with different sets of features to political choices among economic policies that affect inflation, employment, income distribution, and economic growth.
Understanding economic behavior in terms of responses to incentives. In understanding a wide range of human behavior it is often useful to focus attention on the particular motivating factors, the incentives, that lead people to act in a particular manner. Actions that are difficult to explain sometimes become clear when the relevant incentives are identified, and the development of economic policy often involves a search for the appropriate incentives and ways for policy makers to affect them. Economics gives special attention to material incentives -- e.g., wages, taxes, and profits. These material incentives are important, but the most effective economic analysis does not isolate them from other factors that influence people's behavior.
Understanding marginal analysis. Many economic situations can be analyzed by isolating the particular changes in question from the larger context in which they take place. Assuming that the larger context does not change when particular actions are taken, economic analysis can establish a useful first approximation of the rationale for those actions. The actions, or the decisions on which the actions are based, can be understood as involving a comparison of benefits and costs resulting from incremental changes -- that is, changes "at the margin."
Understanding economic events in terms of general and complex social interactions. Economic analysis gives considerable attention to the ways in which seemingly distant and unconnected phenomena have important relationships to one another, and a good understanding of economic life requires attention to the nature of these relationships. It is important, for example, to have an appreciation of the unintended and indirect impacts of economic policy, and to see the way decisions in various segments of the economy are connected to one another. This mode of analysis is guided by the cliche that "everything is connected to everything else," but the real problem lies in understanding the nature of such connections.
- We want our students to obtain an understanding of markets. To a considerable degree, economics analysis focuses on markets, that is, on the arrangements by which people exchange goods and services. Although a great deal of economic activity takes place outside of markets -- government economic affairs, work in the home, and intra-firm activity, for example -- market activity is the central and defining feature of our economy. Our students need to know how supply and demand operate through markets to affect the prices and quantities of goods and services available, and how markets transmit information and coordinate the activities of people in far flung regions of the world. Beyond these "market basics," they also need to examine questions about the social implications of markets. How do markets help us in improving our economic well being? When do markets contribute to social losses and social conflict? What is the connection between markets and the distribution of income? When do markets tend to work best and when do they tend to fail? What role can government play in correcting market failures?
- We want our students to gain basic factual knowledge of the United States and international economies, and to be familiar with the basic concepts that are essential in organizing this knowledge. Students educated in economics should understand concepts like gross domestic product, the official unemployment rate, the consumer price index, the distribution of income, productivity, the balance of payments, the balance of trade, the federal budget deficit, and the federal debt. They should have a good general picture of how these variables have changed in recent years, particularly in the United States, but also in other countries. This basic factual knowledge is necessary in order for people to understand what is going on in their economic lives.
- We want our students to have an understanding of economic policy, to be acquainted with major controversies surrounding policy, to be familiar with the instruments that are used by governments to affect economic activity, and to know about the institutional framework by which economic policy operates in the United States. Governments use a wide array of policies to affect economic life. Fiscal and monetary policies are perhaps the most explicit and pervasive sorts of policy, and an important part of understanding them is having a knowledge of the government budgetary process and the operations of the banking system. In addition, government affects economic affairs through a variety of more focused policies, including, for example, the structure of taxation and spending, social and economic regulations, and international political and economic agreements. It is important that our students know how these policies work and understand the goals, limits, and the problems that surround their operation. Beyond understanding the economic operations of government, we want our students to examine the important social and political debates that surround government economic policy. What should the economic role of the government be? What government regulations are appropriate? What are the implications of a government deficit and government debt? Do governments face a trade-off in pursuing equity and efficiency or can these goals be complementary?
- We want our students to be aware of alternative ways of understanding economic activity. Examining disagreements and different ways of looking at things is an important part of learning to think. In economics, as in other disciplines, there are different schools of thought, often in conflict with one another over basic methodological questions and the definitions of what is important, as well as over particular points of analysis and particular policies. There is a living history of economic ideas in which different schools of thought contend with one another. Our students need to understand these different approaches to economics, partly because different insights can be gained from different approaches and partly because a set of ideas can be fully developed and most effectively learned only in relation to competing ideas.
- We want our students to understand economic events in their historical context. Current day economic problems are always part of a historical process. Effective economic analysis looks at the long term roots of those problems and attempts to see how they have evolved over time. We can learn from history, and we can learn even more if we view the present as part of history.
- We want our students to be engaged with economic analysis as a practical matter and to view their economic studies as a means to deal with social issues that affect them as citizens. Economic analysis can provide insights on international conflicts, environmental pollution, race and gender discrimination, and many other current problems facing society, all of which are affected by economic actions. We want our students to examine the relationships between economics and these sorts of social problems and to ask themselves how their own social values connect to their analyses.
- We want our students to develop the communications and quantitative skills that play a distinctive role in economic analysis. Related to the methods of economic analysis (point 2 above), economists learn to present arguments in distinctive ways. Among the most useful of these are the formulation of well-defined hypotheses, the comparison of alternative explanations of a phenomenon, and the development of historical explanations. Also, arguments in economics rely heavily on quantitative information, and we want our students to learn how to use quantitative skills effectively and correctly in the formulation of arguments about social issues. In developing the distinctive communications and quantitative skills of economics, our students build upon the skills they learn in their general liberal arts education.
- We want our students to gain skills that will help them obtain jobs and be effective in those jobs. With regard to their future work, perhaps we give the most to our students by helping them attain a high quality liberal arts education. We recognize that a liberal arts education is not the same thing as job training. Nevertheless, by obtaining the capacities and skills of a liberal arts education, our students will be in a position to obtain good jobs, jobs that are personally interesting, socially useful, and economically sustaining. In addition, we think that an education in economics can provide students with a particular set of skills and capacities that will give them a good start on their future work. On a general level, we think the method of economic analysis will put our students in good stead for a variety of jobs in a broad range of fields. On a more particular level, the experiences with quantitative analysis, the understanding of economic policy, and the capacity for analyzing complex social problems will all aid our students in their future careers.
- We want our students to be well prepared to undertake post-graduate or professional studies if they choose to do so. Undergraduate work in economics can provide a strong foundation for further work, not only in economics itself, but also in related disciplines and in a variety of professional programs, including, for example, environmental studies, urban and regional planning, teaching, management and law. Often the capabilities acquired in a liberal art education will be most useful when developed further through additional study. We want to make sure that students who wish to move ahead in this way have the opportunity to prepare themselves with advanced courses in economic theory, quantitative methods, and policy analysis.
- We want our students to be exposed to social diversity, both as an ethical issue and as a component of economic analysis. Exposing students to social diversity is not simply a goal of the Department of Economics; it is also embodied in the curriculum of the College of Liberal Arts and the other colleges of the University of Massachusetts Boston. In order to think critically about the world around them and to communicate effectively in that world, students need to examine issues of diversity and to understand the way people's ethical values interact with issues of, for example, race and gender. Economic analysis has a special role to play with regard to issues of social diversity because many questions of social diversity appear as economic questions. Our classes can make an important contribution to our students' liberal arts education and give them better training in economics by dealing with issues of economic stratification and discrimination, analyzing conflicts based in social diversity, and examining policies and regulations aimed at overcoming the social ills connected to diversity. Also, the Department of Economics, like other units in the University, believes that we can do our job of teaching most effectively if our faculty reflects the social diversity of the larger society.