Economic slowdown and the teachable moment

Is a recession good for economics instruction?

Several years ago when Michigan's economy was booming, it was hard to convince students that the business cycle was a real phenomenon and that it was worth spending time studying macroeconomic models to understand recession. The concept of unemployment seemed like a quaint historic vestige.

Today, unemployment, economic slowdown, financial crises, and recession are regularly in the headlines. This is certainly unfortunate for the economy and for Michigan's workers and families but it does raise the level of interest in macroeconomic issues. My students have been noticeably more interested in understanding the causes of economic slowdown and possible policy responses.

The news also brings regular examples of policy responses: tax rebates to stimulate consumer spending, interest rate cuts to stimulate investment. What more could an economist want?

Well, as a citizen, I prefer economic good times, but as a teacher I'll take advantage of our current doldrums to emphasize the importance of the understanding macroeconomics.