Teaching in Economics

The Best of Mankiw

In a series of tweets, Prof. Bofinger points out the weaknesses of the economist N.G. Mankiw's standard works, "The Principles of Economics" and "Macroeconomics".

Best of Mankiw No.1: Statement in Mankiw's "Principles of Economics": "(...) when the government tries to cut the economic pie in more equal slices, the pie gets smaller."

Best of Mankiw No.3: "The trade-off between unemployment and inflation is always present."
(Principle 10). But in the case of a demand shock there is no trade-off. — Best of Mankiw No.3: "The trade-off between unemployment and inflation is always present." (Principle 10). But in the case of a demand shock there is no trade-off.

Best of Mankiw No.4: "How People Interact"

Best of Mankiw No. 5: Minimum wages cause unemployment

Best of Mankiw No .6: Deflation (i.e. a fall in the price level) helps the economy to recover: "As prices fall, the economy gradually recovers from recession (...)" (N. Gregory Mankiw, Macroeconomics, 10th edition, p. 294)

Best of Mankiw No. 7: "When the government reduces national saving by running a budget deficit, the interest rises and investment falls. Because investment is important for long-run economic growth, government deficits reduce the economy's growth rate" (Principles, 7th ed. 562)

Best of Mankiw No. 8: What is the primary job of banks?

Please click on the picture to read the matching article by the Bank of England "Money Creation in the Modern Economy"which was published in the first Quarterly Bulletin in 2014. — Best of Mankiw No. 8: What is the primary job of banks? Please click on the picture to read the matching article by the Bank of England "Money Creation in the Modern Economy"which was published in the first Quarterly Bulletin in 2014.

Best of Mankiw No. 9: In his Macroeconomics textbook Mankiw shows on page 137 that NX and I-S are accounting identities. Some pages later (p. 143), he derives the real exchange rate using I-S as supply for dollars ("capital outflow") and NX as demand for dollars.

Please click on the picture to read the matching article by Prof. Bofinger "Modeling the Financial System with a Corn Economy – “misleading and disastrous”" that criticizes Mankiw's "Macroeconomics". — Best of Mankiw No. 9: In his Macroeconomics textbook Mankiw shows on page 137 that NX and I-S are accounting identities. Some pages later (p. 143), he derives the real exchange rate using I-S as supply for dollars ("capital outflow") and NX as demand for dollars. Please click on the picture to read the matching article by Prof. Bofinger "Modeling the Financial System with a Corn Economy – “misleading and disastrous”" that criticizes Mankiw's "Macroeconomics".

Best of Mankiw No. 10: The Keynesian cross "is the simplest interpretation of Keynes's theory." But this theory is not about "planned expenditure" and "actual expenditure". It is about aggregate supply and aggregate demand, where supply is demand-determined in the short-run.

Please click on the picture to read the matching article by Prof. Bofinger "Teaching macroeconomics after the crisis" that highlights the main problems of the standard IS-LM/AS-AD model. — Best of Mankiw No. 10: The Keynesian cross "is the simplest interpretation of Keynes's theory." But this theory is not about "planned expenditure" and "actual expenditure". It is about aggregate supply and aggregate demand, where supply is demand-determined in the short-run. Please click on the picture to read the matching article by Prof. Bofinger "Teaching macroeconomics after the crisis" that highlights the main problems of the standard IS-LM/AS-AD model.

Click here to go directly to the tweet:

Best of Mankiw No.1: Please click here to get to the tweet.
Best of Mankiw No.2: Please click here to get to the tweet.
Best of Mankiw No.3: Please click here to get to the tweet.
Best of Mankiw No.4: Please click here to get to the tweet.
Best of Mankiw No.5: Please click here to get to the tweet.
Best of Mankiw No.6: Please click here to get to the tweet.
Best of Mankiw No.7: Please click here to get to the tweet.
Best of Mankiw No.8: Please click here to get to the tweet.
Best of Mankiw No.9: Please click here to get to the tweet.
Best of Mankiw No.10: Please click here to get to the tweet.

In an article for the "Institute for New Economic Thinking (INET)", Prof. Bofinger explains his tweet series "The Best of Mankiw" and goes into the numerous errors and confusions of the standard works of economic education: Please, click here to read the article.

In a discussion organized by "Forum New Economy" and moderated by Thomas Fricke, Prof. Bofinger discussed his criticism directly with Prof. Mankiw. Anna Reisch (Netzwerk Plurale Ökonomik) and Prof. Bachmann (University of Notre Dame) also took part in the discussion: Please click here to see the discussion as video.

More information and links on "Teaching in Economics"

Fundamentals of Economics: An Introduction to the Science of Markets

Book by Prof. Bofinger (only available in German ); The economic thinking conveyed in the book is not only important for students of business administration and economics. It helps people who are interested in economic policy to understand the discussions on economic issues and to form their own judgement. Link

Core Project

To help teachers for delivering asynchronous teaching, the "Core Econ" Project offers a variety of resources and some guidance. Click here to go to the core project

Lecture by Prof. Bofinger at Plural Economics

The conference will discuss the status quo in economics and new perspectives in research and teaching.Video

Teaching macroeconomics after the crisis

Working paper from Prof. Bofinger. Würzburg economic papers, No. 86 (2011) PDF

More detailed information on Prof. Bofinger's criticism of modelling the financial system with a corn economy

BMW Papers in Journal Economic Education