Prof Uses Media To Help Explain Macroeconomics

October 22, 1997

Simon Fraser University economist Peter Kennedy turned to journalism for help when he decided to write a radically different kind of textbook which would explain the mysteries of macroeconomics to new students.

Kennedy rejected the traditional encyclopaedic approach of algebraic derivations, graphical analysis, technical detail and intimidating complexity.

Instead, he started with a handful of key macroeconomic principles - ranging from the discouraged/encouraged worker phenomenon to the relationship between money supply growth and inflation. After explaining these concepts concisely and simply, Kennedy drives home their real-world linkage by presenting more than 500 newspaper quotes and posing related questions.

Macroeconomic Essentials for Media Interpretation (The MIT Press, $25 U.S.) first rolled off the presses only four months ago, but it's already gone to reprint.

Kennedy says he was motivated to re-invent the standard macroeconomics text because of his dissatisfaction with their obsession with theoretical detail and lack of practical application.

"This new textbook will help instructors produce, at the end of the day, students able to relate what they are learning in economic principles to the real world," he explains.

With a host of one and two-sentence newspaper excerpts triggering analysis, the book grabs the attention of students and forces them to explore key macroeconomic concepts in a practical way, according to Kennedy.

A sample newspaper quote: "Pretty sluggish job growth during the rest of the year is likely to keep the unemployment rate stagnant, particularly as the recent increase in employment will probably encourage more people to join the labor force." Kennedy follows this with questions probing why the employment increase might encourage more people to join the labor force, how the unemployment rate will be affected and what economists call this phenomenon.

Kennedy says his book is aimed at students who don't plan to specialize in economics and have no need for chapter and verse on esoteric theorizing and graphs. Business students, for example, really only need to understand basic macroeconomics in a way which will help them do their jobs and make money.

"To force theoretical details on these students is to miss what might be the one and only opportunity we have to impress on them the principles they'll need to know in the business world," he argues.

Most professional economists view business and economics journalists as having "second-class" credentials, according to Kennedy. He disagrees: "On the whole I'm very impressed with the quality of reporting and the way that quality has improved as journalists have moved along with new ways of thinking in economics."

Taking the complexity out of learning economics is something that Kennedy has always emphasized in his academic life. His 1978 book, A Guide to Econometrics, is now into a fourth edition and has become something of an "underground classic" over the years for students entering graduate programs in economics.

As with his newest book, Kennedy was determined to strip away needless complexity with his econometrics text. At first, instructors were uniformly unimpressed, but students thought otherwise and the word soon spread.

The result has been phenomenal and, now almost 20 years later, his econometrics books sells close to 3,000 copies annually in a very limited market. Regardless of where he goes in the world, the book and its author are known.

Recently, Kennedy met a young economist working for the U.S. Federal Reserve Bank. After confirming that, indeed, he was the same Peter Kennedy who wrote "the" book, she told him that America's central banking authority annually gives each of its 100 newly hired apprentices a selection of key job-related books, one of which is Kennedy's A Guide to Econometrics.

-30-


Simon Fraser University

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