Economics


Integrating Ignatian Values into Principles of Economics

Nancy Bertaux, Ph.D.
Mentor: Ed Cueva, Ph.D. (Classics)

Over the course of the Fall 2006 semester, through conversations with Ed Cueva, readings on IgnatianNancy Bertaux, Ph.D. pedagogy/Jesuit education, and through personal reflection, I have both made a number of changes to my approach to principles of economics courses taught during the semester, and planned further changes for the next semester.

While the majority of class time and energy in a principles of economics class must be spent on standard, basic theory, there is always an opportunity for instructors to personalize and energize these courses through their use of optional materials and illustrative examples. In my two honors' sections of principles of microeconomics, I have used three major supplemental readings and some in-class and homework activities to focus students' attention on social and ethical issues that are either implicit in the methodology of economics, or serve as applications of the theory learned by students. The supplemental readings were Robert Layard's Happiness and Economics, Barbara Ehrenreich's Nickel and Dimed, and Vandana Shiva's Stolen Harvest. The activities included simulations of market dynamics and analysis of students' own spending patterns to explore market structures. I believe these changes were significantly effective at both enhancing student learning of the "basics" as well as students achieving a more sophisticated understanding of the advantages and disadvantages of free markets. This more sophisticated understanding included an expanded awareness of the many important ethical dimensions of economic theories and economic activities.

During the spring semester, I expanded this basic approach, in a modified fashion, to both principles of micro and macroeconomics, this time for non-honors students. To accommodate student time limitations, I had each class divided into two or three groups, each of which read one of the supplementary books. Discussions in class acquainted all students with the general arguments in each book. I added another reading, Paul Farmer's Pathologies of Power: Health, Human Rights and the New War on the Poor, which was especially appropriate since Farmer came to speak at Xavier during that semester. As time permitted, I also continued and extended the in-class and homework activities.

 

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Communicating Jesuit Values in Economics

Thomas Lesbesmuehlbacher, Ph.D.

Mentor: Christine Anderson, Ph.D. (History)

Economics is often considered the dismal science. Coined in the 19th century by historian Thomas Carlyle in the
context of reintroducing Slavery in the West Indies, economics today is still often used to derive gloomy prediction
and policies, often with little regard for human feelings. For example, economics can justify why, given scarce
funds, it is efficient to let AIDS patients in developing countries die. Economics can explain why at the onset of the
Financial Crisis in 2007/2008 traders kept making money well knowing they contribute to the demise of the
economy. Afterall, economics is all about incentives and rational decision making, and feelings have no place in the
dismal science.

The previous two examples also point to another characteristic of economics – it’s wide range. Sometimes
considered a social science, sometimes used to study business and economies, economics includes a wide range of
fields. For example, Nobel Prize Winner Gary Becker studied the theory of marriage and crime, Nobel Prize Winner
Elinor Ostrom was a political scientist, and Nobel Prize Winner Robert Shiller studied financial economics.
Since economics can be everything and nothing, students – incoming or returning – are often unsure what to get
out of an economics degree and therefore gravitate towards other majors within the business school or the
College of Arts & Sciences. This is the starting point for our project. In the 3 years I have been at Xavier University, I have participated in X-Day, Preview Day, or eXperience every year, and I noticed that relatively few students
inquire about economics even though they want to study exactly economics – without even knowing it. I had
students ask: “Where would I find finance, I want to study the stock market” or “I am interested in local politics
and helping local communities, who should I talk to”. Well, you accidentally have come to the right place.

Over the last 2 semesters, Christine and I discussed possibilities how to draw attention to Economics, and
specifically Economics at Xavier. As it turns out, our comparative advantage is our Jesuit Values. While often
thought of as a contrast, Jesuit Values and Economics have a lot in common: the research our faculty does, the
material our faculty teaches, and the way our faculty engages with students. For our project, we designed a Poster
for events like X-Day, to inform students about the interaction of Economics and Jesuit Values.

Specifically, Christine and I discussed each of the 6 Jesuit Values - Cura Personalis, Reflection, Service Rooted in
Justice and Love, Solidarity and Kinship, Discernment and Magis – and how they are reflected in our teaching,
research and our students’ career prospects. Being relatively new at Xavier, and never having thought about
Economics and Morality, I was surprised to see how clearly the Jesuit Values map to my major.
Christine and I spent hours discussing what each of the values meant for us, what they mean for our students, and
what they mean for our students’ parents. Afterall, Magis might have a different meaning for faculty than it does
for students and parents.

To continue the example of Magis, the Economics major teaches this value in classes like Economic Growth or
Environmental Economics by educating our students to strive for change and use it to help others. Not only does
Economics teach Jesuit Values, we also teach with Jesuit Values in mind: through the mentoring of our Advisory
Board, and by offering student-Faculty Research Projects we push our students out of their comfort zones to
achieve more. Magis is also present in our research. For example, Dr. Kosack’s research sits at the intersection of
economic history and labor economics. By analyzing migration decisions and policies of the early 20th century he
addresses the complex choices surrounding migration and analyzes the universal good in these choices. Finally, by
incorporating Jesuit Values in our teaching, Economics graduates gain a comparative advantage in the job market.
Corporate Social Responsibility is increasingly at the core of many organizations. As more and more firms align
their business strategy with initiatives to protect minorities, communities and the planet, our graduates become
increasingly competitive.

As one student states: “Xavier’s economics department continually offers a seamless integration of current real
world events with morally sound action to propel society and make ALL people better off. Their dedication to
solving problems with recognition of our strong Jesuit mission is impressive and makes for meaningful learning.”
Through this project, Christine and I hope to communicate and enhance the integration of Jesuit Values and
Economics. We want to educate students, parents and faculty that the dismal science can be used to accomplish a
lot of good around the world, and that an Economics degree from Xavier is a viable alternative to other business
and social science related studies.

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Student-Devised Cost of Living Comparisons (Economics 201: Macroeconomic Principles [2 sections, 25 students each], Winter 2007)

Michael Rimler, Ph.D.
Mentor: Sarah Melcher, Ph.D. (Theology)

Macroeconomic examines how the economy-wide average price level and the economy-wide output level are determined as well as what, if any, relationship exists between the two. We identify and analyze the forces which influence the overall stability of the economy. Specifically, we look at the causes of inflation, cyclical swings
in total production, and economic growth. The goal of characterizing macroeconomic theory is to apply that understanding to policy decisions for the purposes of stabilizing the growth of an economy.

This course satisfies the social science requirement in the University Core and is required of all undergraduate business students through the business core. As such, this course is taken by a wide range of students, most of which are classified as sophomores. Microeconomic Principles is a prerequisite for this course, thus students have prior knowledge of economic thinking.

Course Component:

In this course, I added a component to guide students toward creating their own cost-of-living index for familiar geographical areas. The average price level in the economy is measured by the Consumer Price Index (CPI) which compares the cost of a specific basket of goods in two different time periods. The CPI is often used to measure the average cost of living for the area from where prices are collected. The project has two main objectives:

  • To develop an appreciation for the tremendous undertaking of the Bureau of Labor Statistics when calculating and reporting the CPI each month.
    The CPI samples hundreds of thousands of prices on over 80,000 products, compiles the data, and produces a single number, the Consumer Price Index for that month. The percent change in this piece of data is precisely what CNN, MSNBC, the Wall Street Journal, etc. report as inflation in the U.S. economy. This project asks the students to gather prices on only 38 products and for only two locations per student, yet it required almost a full semester to complete.
  • To help students develop an awareness of their surrounding communities and the costs of living in those communities.
    The entire project was student defined, as will be explained below. Students selected the communities from which they would gather their prices. The only restriction placed on their selection was that the communities had an ex ante perceived difference in affluence. The purpose of this restriction was to allow the data collected to either support or reject the perceived differences. Either result proved to stimulate conversation about the various neighborhoods. In addition, students are asked to reflect on their experiences with the project.

Sub-Components:

In order to complete the project and ensure that students did not procrastinate, I partitioned the project into successive stages through the semester. These sub-components are outlined below.

Sub-Component 1: Generate a list of commonly purchased products.
Students were required, on an individual basis, to submit a list of 5-7 products that they believed the average person consumed. This could be frequently-consumed items such as apples or bath soap, or less frequently consumed such as a car. Excluded items were 'obvious' choices such as bread, milk, and eggs. As a class, we
discussed the entire list of submitted products and reduced it to a final list of 38 products. These products can be found in Table 1. Ultimately, students will gather prices for this listing of products which, in their minds, are representative of products that consumers typically purchase.

Sub-Component 2: Select neighborhoods from which prices will be gathered.
In self-formed groups of 1-4, students will choose at least two neighborhoods from which they will sample prices. There are two restrictions on their selection. First, the neighborhood must be accessible to at least one group member. Second, students are asked to select neighborhoods with at least a perception of different costs-of-living. The data collection stage was scheduled over Easter Break to facilitate a student collecting prices from neighborhoods other than Cincinnati. Examples of cities chosen can be found in Table 2. In addition, students were required to submit a short essay justifying the differences in perceived affluence.

Sub-Component 3: Identify retail locations where the products are sold.
For this component, each group was required to identify two locations in each of their neighborhoods from which they would eventually gather prices on the list of products that was developed. Groups submitted a spreadsheet containing the name, address, and phone number for each retail location in each neighborhood for each product on the product list. Selected retail locations are listed in Table 3.

Sub-Component 4: Collect and record price information.
For a two-week period over Easter Break, students visited the locations selected in Sub-Component 3 and recorded the retail price for each product as well as the date that the price was recorded. Students were instructed that if the product was unavailable, to find the next closest product and provide an explanation of what substitution was made.

Sub-Component 5: Analyze collected data.
When all the data was submitted, I compiled and presented it from various cross-sectional perspectives. Almost an entire class session was devoted to looking at the collected data across products, across neighborhoods, etc. We found various data collection errors such as a $1.98 per night hotel room and a 3-pack of men's undershirts for $59. We discussed weaknesses and strengths of the process vis-ã -vis the Bureau of Labor Statistics' measurement of the CPI. In addition, we discussed differences in costs-of-living in Chicago, New York, and Cincinnati, as well as Norwood, Hyde Park, and other surrounding Cincinnati communities. Tables 4 and 5 present average prices by state and around Cincinnati, respectively.

Sub-Component 6: Reflection on project.
The final aspect of this project required students to submit, individually, a reflection paper on the semester project. I asked them to reflect on what they learned from the project, what surprised them, and what didn't.

Many of the reflection papers comment on how students did not foresee the benefit of this project at the beginning of the semester. They perceived the project would be a time-consuming load of work that would not be at all interesting. By the end of the semester, they found the project to be quite worthwhile and fun. They enjoyed actually visiting stores to collect prices. Many commented on their interactions with customers and store personnel who inquired about their activity. Most of the learning from this project was achieved through Objective I. However, I knew at the outset that this was an acceptable risk. Students do not have data from other semesters for comparison. In addition, the identification of differences in cost-of-living is dependent upon the data collected. We identified enough errors in the data to help with Objective I, but too may to trust any conclusions with respect to Objective II. However, some students did comment on price variability (hence cost-of-living variability), especially in and around Cincinnati.



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