The CORE team - The Economy

Word cloud emphasizing inequality

The most pressing problems that economists should address, according to students at Humboldt University.

Word clouds from students in Sydney and Bogota are barely distinguishable from this one (you can see them on our website at www.core-econ.org). Even more remarkable, when in 2016 we asked new recruitsmostly but not entirely recent economics graduatesat the Bank of England, and then professional economists and other staff at the New Zealand Treasury and Reserve Bank, both responded the same way: inequality was the most common word in their minds.

Local and global social problems are always on the minds of new students. In France, when we tried the same experiment, unemployment showed up more often. Climate change and environmental problems, automation, and financial instability were frequently mentioned around the world.

Our focus on these real-world problems explains why we called this book The Economy rather than Economics, which is the standard title for introductory texts. The economy is something in the real world. It governs how we interact with each other and with our natural environments in producing the goods and services on which we live. In contrast, economics is a way of understanding that economy, based on facts, concepts and models.

The Economy is a course in economics. Throughout, we start with a question or a problem about the economywhy the advent of capitalism is associated with a sharp increase in average living standards, for exampleand then teach the tools of economics that contribute to an answer.

For each question, the material is in the same sequence. We begin with a historical or current problem, even if it is a complex one, and then we use models to illuminate it. COREs pedagogy thus flips the convention in economics texts on its head. Traditionally, the models are derived first. Perhaps the introduction to the models includes a simple application such as shopping, and a promise that the model will be applied to economic problems in the real world either later in the course, or more likely in later courses.

Because CORE starts with big problems and questions from history and current affairs, the models and explanations we use need to take account of real-world phenomena. For example, actors never have complete information about everything relevant to the decisions they are making, motives other than self-interest are also important, and the exercise of power in strategic behaviour often has to be part of the explanation for the outcome we see.

Recent advances in economics have given us the tools to do this. And because we apply economic models to important, complex and difficult problems, CORE students learn immediately both the insights gained from modelling, and the unavoidable shortcomings of models.

CORE is a truly global project in two ways. Its development spans the world, and it is open to anyone, anywhere, who wants to use it.

Much of our design and interactive features were initiated in Bangalore. The open-source platform for our text and online materials was produced in Cape Town. The printed book version of the material is published by Oxford University Press. Translations and localizations of