Glazing flaws in a widely used economics textbook

Unfortunately, in the midst of this publishing frenzy to improve higher education, many basic things are being overlooked. Specifically, what are the books and other teaching materials (case studies for management courses) that we use for MBA and University Masters programs? In this case, the unpleasant state of affairs in some cases should be highlighted.

The book is currently widely used in India Macroeconomics By Monkiev and Taylor (Cengage Publications, 4th Edition, 2017). It is a branch of a book of the same title written by Mankiev, a world-famous text for over a decade. N. Gregory Monkie is a professor of economics at Harvard University, led by Robert M. Beren, and formerly of the Council of Economic Advisers under former US President George W. Bush. He is a leading author of Economics textbooks used worldwide. First comes his Principles of Economics (Micro and Macro Combined), which is used as an introductory first or second year course in bachelor’s programs. For the third or fourth year BA courses comes his advanced level ‘Intermediate’ macroeconomics text. Otherwise, this high-level book will be used by masters at the MBA level and / or Economics level as the first and often mandatory-macroeconomics course in these programs.

According to Monkiev’s recent post, 4 million copies of his various books, including translations, have sold worldwide. In the aftermath of the 2008 global financial crisis, he faced criticism for his book (s)’s pro-market resolutions on issues such as income inequality, free trade, the impact of the minimum wage and others on microeconomics. The validity of these criticisms is a special case. From a macroeconomic point of view, the IS / LM framework – which plots the ‘investment equivalent savings’ curve against the ‘money supply’ curve to equate ‘liquidity preference’ – is a misnomer used by Mannick. In a lengthy note, I criticize the flawed defense of Monkiev IS / LM (especially in the sixth edition of his macroeconomics, before the 2008 crisis) on a factual and analytical basis. This review (‘Why IS / LM is irrelevant and wrong’, February 2015) can be read on my website Financial Macroeconomics.com.

Mankiev’s macroeconomics book is as expensive as many other prices in the US. When I last visited the country in 2018, someone who teaches at a high school in California told me they didn’t use it, but relied on their notes because it was too expensive. Unlike some Indian institutes of management, books and teaching materials are given to all students as part of a package agreement for the total fees they pay, a common practice in US universities is to drop it, whether students buy the book or not. (Buying a book like masking US students is not easy.)

Like most foreign textbooks used in India, Mankiev’s book is being sold outside South Asia at a reasonable rupee price in a banned paperback version, with some publishers agreeing. However, this has not proven feasible. Due to the huge price difference, the cheapest South Asian paperback version will probably find a way to return to the US illegally. This is often the case for other foreign books as well.

For whatever reason, the print version was discontinued for some time in 2014 or 2015 and only the e-book version can be used and sold in India. However, the book Offshoot Macroeconomics, written by Monkiev and his co-author Mark Taylor for the UK and European markets, has become a reference or recommendation text in many universities in India (2017 South Asia Edition).

Judging by the actual content of this book, its flaws shine through. A few more chapters in the Mannikiv book are selected and merged without changing the reference to the chapter numbers in the text. As a result, from beginning to end, the book is filled with references to non-existent chapters. For example, in Chapter 1, in the first paragraph, “In Chapter 7 we introduce two measures of prosperity.” But Chapter 7, entitled ‘Problems in Financial Markets’, does not discuss measures of prosperity.

Entering Chapter 7 on page 129, “In Chapter 25, we explain the principles of CDOs and Credit Default Conversions (CDS).” But the book ends with the 19th chapter. It contains more than 50 errors in the book — in fact, 10 of them in the crucial 15th chapter, ‘The Impact of Economic and Monetary Policy on Total Demand’.

My advice is that this book should be banned instead of where it is indicated — that is, banned.

In addition, we must strive to correct the failure of India’s current educational ecosystem — from publishers to professors — to develop local quality teaching materials with high quality. It requires urgent attention.

Vivek Murthy Professor, Economics and Social Sciences, Indian Institute of Management, Bangalore.

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