Confusions in Textbooks

Some instructors have reported in the economics education literature that some important concepts are not always explained properly or that some confusions exist in textbooks.

Government’s Role

Eyzaguirre et al. (2019) describe typical shortcomings about the role of governments in principles textbooks.

Gross Domestic Product

Wolla (2018) describes the confusion that exists in the presentation of the gross domestic product (GDP) expenditures approach.

Invisible Hand

Dupont and Durham (2020) remind that the invisible hand must be placed in a historical context to make sense. They provide material to approach Adam Smith's invisible hand in the classroom, including experiments.

Minimum Wage

In most principles textbooks, the treatment of the minimum wage is limited to a perfectly competitive labour market. Unfortunately, it is very far from our current comprehension of how minimum wages affect the economy. Jahangir (2020) provides resources to extend the discussion to the inelastic demand for labor, the monopsony model, and the boom and bust cycles. The paper also provides illustrative empirical evidence. 

Monetary Policy

In the last ten to twenty years, central banks, such as the federal reserve (Fed) have altered their approach to monetary policy. However, many economics textbooks have not updated the way monetary policy is presented. Ihrig and Wolla (2022) provide information about the policy tools the Fed is now using and discuss the changes of approach that were made by the Fed. 

Rationality

Jones (2021) reviews how introductory economics textbooks discuss and define rationality. He finds that the treatment of rationality varies greatly between textbooks and suggests that some authors may be wrong in their approach. Jones (2021) indicates that the concept may not be necessary when teaching economics principles and that instructors should at least be careful when introducing rationality to students.

Substitution and Income Effects

Picault (2016) describes the confusion that exists in the presentation of substitution and income effects