critical thinking economics education

The Economic Way of Thinking

• Teacher Resources
• Lesson Plans
• Right Start in Teaching Economics
• The Economic Way of Thinking…

Lesson Purpose:

This lesson defines the study of economics by describing both what economics is and what it is not .  It introduces the perspective that economic reasoning skills are valuable critical thinking tools and demonstrates how this perspective enhances users’ ability to analyze and understand human behavior, the focus of social science inquiry.  Finally, this lesson begins to demonstrate how economics education provides a powerful tool for learning in a variety of disciplines and contexts.

Content Standards:

Standard 4: Students will understand that People respond predictably to positive and negative incentives. Benchmarks: grade 8:

• Responses to incentives are predictable because people usually pursue their self-interest.
• Changes in incentives cause people to change their behavior in predictable ways.
• Incentives can be monetary or non-monetary.
• Acting as consumers, producers, workers, savers, investors, and citizens, people respond to incentives in order to allocate their scarce resources in ways that provide the highest possible returns to them.

Standard 1: Students will understand that. . . [people] must choose some things and give up others.  Students will be able to use this knowledge to: Identify what they gain and what they give up when they make choices. Benchmarks: grade 8:

• The choices people make have both present and future consequences.
• Choices made by individuals, firms, or government officials often have long-run unintended consequences . . . .

Session Objectives :

• Define Economics as the Science of Choice
• Introduce incentives and the role of incentives in decision making, as one of the key tools of economic reasoning.
• Describe and practice economic reasoning, emphasizing the importance of:
• identifying incentives
• decision-makers’ perceptions of costs and benefits
• Describe and practice economic reasoning using the “Economic Reasoning Quiz” and the “Economic Reasoning Principles” handout.
• Demonstrate how spending time on economic reasoning builds a solid foundation for all economics education

Key Content:

• Economics is a social science that focuses on the choices people make.
• Ironically, although many of the primary issues in young people’s lives link directly to economics and economic reasoning, the economic perspective is often left out of the core K-12 curriculum.
• Economics asserts that people make choices based on their perceptions of what is best for them.  The tools of economic reasoning help us understand what shapes peoples’ perceptions of the alternatives they face.
• People’s choices among considered alternatives reflect their perceptions of the costs and benefits – to them – of the alternatives they face.
• Incentives are rewards or punishments that influence people’s actions.
• When incentives change, people’s behavior changes in predictable ways.

Mythconceptions:

• Economics is all about institutions and mathematical models
• Economics is all about money
• Seeking self-satisfaction is selfish
• Bad choices have costs but good choices do not
• Sometimes people just have no choice
• It is a good idea to have all the relevant information before deciding

Frequently Asked Questions:

• How can it be that economics is not all about money?  We work for money and without it people cannot participate in the marketplace.
• A basic principle of economic reasoning is satisfaction maximization.  Isn’t that saying it is O.K. to be greedy?
• Isn’t it important to seek all of the information about a possible choice before making it?
• Isn’t using incentives to influence behavior just a bribe?
• How can expected cost and expected benefit analysis work when it is impossible to quantify either of these categories in many situations?
• Why can’t I be sure about the outcome of my choice?

Classroom Activity Options

• Distribute 3 x 5 cards and have the participants write complete definitions of economics on the card.  Ask several people to read their definitions.  Share the definitions and insights of Smith, Keynes, Heyne, and Reinke as a point of comparison.  Ask the students to revise their definitions as the course continues.
• Distribute the list of “mysteries” that economic reasoning can be solved with economic reasoning. Discuss a few.  Challenge students to keep the remaining mysteries in mind as they accumulate economic reasoning tools.
• Distribute “Things Are the Way They Are for a Reason,” to demonstrate that the power of economic reasoning is not limited to the discipline of economics.
• Distribute the “Economic Reasoning Principles” handout.  Discuss each principle and include a current event, headline, or mystery as an example.  Ask students to generate or collect their own examples.
• Distribute and ask each student to take the Economic Reasoning Quiz.  Discuss the answers, emphasizing how economic reasoning was used.
• Distribute and discuss the handout, “Identifying an Economically Literate Person.”  Assign students’ the task of reading the complete description as homework and determining whether they are currently “economically literate.”
• Assign individual students or small student groups to use economic reasoning to identify and solve a “real life” mystery.

Handouts and Supplemental Materials

• Value of Economic Reasoning … Any Place, Any Time
• Economic Reasoning Principles
• Incentives Unlock the Mysteries of Human Behavior
• Economic Reasoning Quiz

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• print edition

Critical Thinking, Economist-Style

By john siegfried and david colander.

john siegfried is a professor emeritus at Vanderbilt University who specializes in economics education. david colander is a professor of economics at Middlebury College and the author of an introductory economics textbook, Economics. This article adapts portions of the authors’ essay in The Journal of Economic Education . Used by permission of Taylor & Francis Group.

Published October 31, 2022

Critical thinking is far too often conceived of as a vague, feel-good platitude. Every discipline claims critical thinking — CT for short – as a central part of its methodology. A look at academic analyses of the concept suggests that the essence is generally agreed upon. It involves approaching questions with an open mind and basing conclusions on deductive reasoning and evidence, while recognizing our limitations in terms of objectivity. Critical thinkers possess the virtues of intellectual integrity, humility, civility and a sense of justice. Who can argue with that?

Unfortunately, as soon as one moves from generalities to specifics, the substance of CT becomes more elusive, and one person’s CT is another person’s systemically biased thinking. For example, is an economist who points out the unintended, sometimes negative, consequences of an anti-discrimination policy exhibiting CT, or are they demonstrating a racist bias that is embedded in economic methodology? Our “CT” answer is that they are doing both at once.

Open-minded critical thinkers need to be comfortable with contradictions, and, as Walt Whitman famously put it in another context, “to contain multitudes.”

Inside-the-Box vs. Outside-the-Box

To capture these multitudes, we find it useful to distinguish “inside-the-box” from “outside- the-box” critical thinking. The inside the-box sort is what most economists have in mind when they refer to “thinking like an economist.” It is the thought process of an expert in their field. For an economist, that means using economists’ standard state-ofthe- art tools, models and methods.

Inside-the-Box CT

Much of economists’ CT involves tools common to other STEM-oriented disciplines — logical deduction, induction, statistical modeling and testing. But economists also favor some particular aspects of CT. For example, they are inclined to look skeptically for the missing piece, such as when demand alone is identified as a cause of a price increase or decrease, or when benefits alone are identified as a reason to adopt a new public policy.

Economists also place emphasis on identifying potential unintended consequences of a policy. And they tend to think “on the margin,” focusing on changes moving forward. Indeed, they are trained to ignore costs that have been irretrievably incurred, or “sunk.” Above all, economists search for incentives, both positive and negative, that could stimulate behavioral reactions to environmental changes. Incentives may be financial. But many do not involve money, and economists’ version of CT involves a serious search for them.

When conducting empirical analysis, economists are particularly sensitive to the distinction between correlation (X happens when Y happens) and causation (X happens because Y happens). And in recent decades, they have developed numerous statistical methods to distinguish between them.

“Selection bias” is an important example. Selection bias occurs when individuals or groups in a study differ systematically from the population of interest, leading to a systematic error in statistical analysis.

“Selection bias” is one important example that has attracted a lot of attention among economists in recent decades. Selection bias occurs when individuals or groups in a study differ systematically from the population of interest, leading to a systematic error in statistical analysis. It often occurs when individuals self-select into either a treatment or control group for purposes of comparison.

For example, in testing a newly developed vaccine for safety and efficacy, if test subjects are allowed to decide for themselves whether to participate in the treatment or control group, those who are really motivated to use the therapy — say, the elderly or those with chronic health problems — may disproportionately opt for the treatment group. As a result, the treatment will seem less effective than it really is because those receiving it are more likely to get sick in the first place. Accordingly, economists have worked hard to ensure that participants in controlled experiments are randomly assigned to treatment and control groups.

Formal empirical analysis has become increasingly important in economics as data availability has expanded and new techniques of analysis have been developed. Those developments have made clever variations of the experimental method routinely used in the hard sciences far more central to critically thinking like an economist. Today, sophisticated economic analysis is deeply grounded in the worldview of the great British physicist Lord Kelvin , who opined that “when you can measure what you are speaking about, and express it in numbers, you know something about it, but … when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.”

Outside-the-Box CT

Whereas inside-the-box CT deals with analysis in an information-rich environment, outside- the-box CT deals with analysis when information is scarce. Here, formal empirical analysis cannot provide definitive answers, and policy analysis must necessarily involve subjective judgement. One must rely on what we call philosophical methodologies, including careful informal analysis of a question from many perspectives. The goal is to arrive at what might be considered a defensible conclusion that can be used until data are available — not a scientific truth.

On the Relationship Between “Education” and “Critical Thinking”

• First Online: 03 January 2020

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• Klaus Beck 2  

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In view of recent international efforts to identify and measure the ability “critical thinking,” this paper attempts to trace and reconstruct the core meaning of this concept in the light of its conceptual history in the German terminology of educational philosophy and research. In doing so, it becomes evident that it is necessary to clarify the relationship between “critical thinking” and “education,” both understood as terms designating a mental state. In German as well as in English educational research, it seems to be the prevailing view that “critical thinking” is a partial meaning, a facet, of “education” (in the sense of “being well educated”). The German language, however, differentiates between “education” in this latter sense (“Bildung”) and “education” as a label designating the approximate equivalent of the English term (“Erziehung”). Moreover, there is a long tradition and discussion in German-speaking countries around the meaning of “Bildung,” which has shaped “critical thinking” into one of its facets, setting it apart from its understanding in the English terminology with its own special history of this concept. Therefore, trying to make international comparisons with regard to measuring “critical thinking” first requires efforts to reach a common understanding of this concept.

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This goes so far that each individual, in principle, is completely free to attribute a meaning to a sequence of letters or sounds (or to any sign at all), be it already established in written or spoken language or newly invented—a nominalistic position (Essler 1972 , p. 198ff.). Supporters of a humanities viewpoint, on the other hand, represent a (hyper-)platonistic viewpoint in these matters, which assumes that all terms of our languages, including logic operators, are to be understood as names of “real” facts, thus including also immaterial entities, and that it is therefore an empirical matter to correctly describe the meaning of a term (ibid.).

For example, the agreement to meet “at the bar” works out because, during the conversation, you are just crossing the railway tracks and not sitting in front at the counter of a tavern.

Examples include not only “critique” and “thinking” but also “morality”, “motivation” or even “theory”.

See on the “untranslatability thesis ” Quine ( 1960/1980 , Chap. II) and Davidson ( 1984 ) as well as Sukale ( 1988 ); on linguistic relativity the Sapir-Whorf hypothesis, presented in Gipper ( 1972 ).

The connection between descriptive and normative meaning , i.e., between definition and requirement, is established by requiring that, with regard to the denotatum of the defined term, it should be brought about, maintained, removed, or similar. In many, if not most, contexts of definitions, such an application is not readily obvious. One thinks, for example, of elementary terms from the natural sciences such as “temperature” or “volume,” but also from social sciences, for example, “socialization,” “interaction,” or even in economics, for example, “balance” or “exchange rate.” It has been criticized on occasion that all terms inherently transport a normative meaning from the very beginning as even the definition itself is nothing more than a normative statement. However, this view mixes different language levels (definitions are of a meta-linguistic nature) on the one hand and confuses the functions of language regulation and language use on the other hand.

This ultimately includes all teaching and learning aims as well as all overarching pedagogical goals.

“ Ought implies capability ” or “ultra posse nemo obligatur ”—a bridging principle between “be and ought”, as was recently tried to justify, with good reason, in Critical Rationalism (Albert 1980 , p. 76f.).

However, it would require an own basis of legitimation, which is not given if what we propose as a language regulation were to be demanded of a certain group of people (e.g., pupils, students, applicants, voters, office holders) as a requirement to strive for or even achieve the defined state.

Corresponds approximately to the suffix “- tion ” in English nouns.

The processes thus distinguished, including those of “throughput ”, can in fact all be reconstructed as temporal sequences. The proposed distinction is only made at a psychological meso-level for reasons of clarity.

Ironically, Niklas Luhmann writes: “The word education [“Bildung”] provides the contingency formula of the educational system with an indisputably beautiful body of words. It flows easily from the tongue” ( 2002 , p. 187; translated from German by DeepL [ https://www.deepl.com/translator ] and author).

The relevant deliberations of Greek and Roman antiquity can be dispensed with here as they are enclosed in the modern discussions on the concept of education.

Translation German-English retrieved from http://ghdi.ghi-dc.org/sub_document.cfm?document_id=3589 (2018, June 15).

Similarly: “The most important revolution in the interior of man is: «the outcome of his self-incurred tutelage». Instead of others thinking f o r him until then and merely imitating him or letting himself be guided by leading-strings, he now dares to move forward with his own feet on the ground of experience, if still shaking” (Kant 1798/1981 , vol. 10, p. 549; translation from German by DeepL and author).

Thus Bernhard ( 2011 ) speaks of a “concept of liberation education ” for that time: ‘Western’ populations are dependent “on the cultural industries that incapacitate them” (p. 90). “Education (provides) an early warning system regarding the mechanisms of the incorporation of capital that must not be underestimated” (p. 99).—In contrast to the original function of serving as a category for distinguishing social stratification, a normative interpretation of the concept of education as a “battle concept” (Ribolits 2011 ) comes into play here and stands for the exact opposite, the leveling of all social differences.

This—momentous—separation of general and specialized, i.e., vocational training, still takes place today, citing a passage in the Lithuanian school plan: “There is a certain amount of knowledge that must be general, and even more a certain formation of attitudes and character that no one should lack. Everyone is obviously only a good craftsman, merchant, soldier and businessman if he is a good, decent man and citizen, enlightened according to his status, in himself and without regard to his particular profession. If the school education gives him what is necessary for this, he subsequently acquires the special ability of his profession so easily and always retains the freedom, as so often happens in life, to pass from one to the other” (von Humboldt 1809/1960 –1981, p. 218).

Women were far from being mentioned in this context at the time. In 1900, the physician Möbius was still able to publish a paper entitled “On the physiological imbecility of women”, which by no means brought him violent opposition (Steinberg 2005 ). In contrast, the “Memorandum” of the “First German General Assembly of Conductors and Teachers of the Higher Girls’ Schools” of 1872 proclaims: “It is necessary to allow the woman an education equal to the spiritual formation of the man in the generality of species and interests, so that the German man is not bored by the spiritual short-sightedness and narrow-mindedness of his wife in the domestic flock and the warmth of feeling for the same stands by his side” (cited from Lange and Bäumer 1901 , p. 64f.; translation from German by DeepL and author)—a sign that “pedagogy” was a considerable step ahead of “medicine” at the time.

Whether Humboldt himself would have accepted this claim is still controversial and must remain unanswered (Zabeck 1974 ).

Keyword “Encyclopédia”. “La double vocation de cet ouvrage est de répertorier les connaissances et les savoirs de son siècle et aussi d’ouvrir une réflexion critique, de “ changer la façon commune de penser ”” (Wikipédia 2018 ).

The regulations for the study of political science in the “Kingdom of Bavaria” state, for example: “The complete course of general sciences includes the following subjects: (1) philosophy (2) elementary mathematics (3) philology (4) general world history (5) physics (6) natural history” (Döllinger 1823 , p. 204). “(T)o the study of special sciences...”count as “auxiliary sciences”…“encyclopedia and methodology” (ibid. s: 206). However, the students were forbidden, among other things, “all deliberative meetings” (ibid. p. 219), i.e., meetings under a motto that today we would describe as “critical thinking”.

Their “individual position” (“Individuallage”), as Pestalozzi put it (Lichtenstein 1971 , Col. 925).

This term reappears in a polemic by Th. W. Adorno in the first half of the twentieth century, where it is positioned against the “cultural industry” ( 1959/1998 ).

Except for the shortening it experienced during the second half of the nineteenth century, as described above.

Dewey instead still uses the term “reflective thinking”: “Active, persistent, and careful consideration of a belief or supposed form of knowledge in the light of the grounds which support it and the further conclusions to which it tends” (Dewey 1916 , p. 9).

See the “Watson-Glaser Critical Thinking Appraisal (WGCTA) ” (Watson and Glaser 1964 ), for which a German adaptation exists (Sourisseaux et al. 2007 ) and which is sometimes labeled to be the “gold standard” in measuring CT.

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Beck, K. (2019). On the Relationship Between “Education” and “Critical Thinking”. In: Zlatkin-Troitschanskaia, O. (eds) Frontiers and Advances in Positive Learning in the Age of InformaTiOn (PLATO). Springer, Cham. https://doi.org/10.1007/978-3-030-26578-6_6

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Critical Thinking Questions

Over the past 50 years, many countries have experienced an annual growth rate in real GDP per capita greater than that of the United States. Some examples are China, Japan, South Korea, and Taiwan. Does that mean the United States is regressing relative to other countries? Does that mean these countries will eventually overtake the United States in terms of the growth rate of real GDP per capita? Explain.

Labor Productivity and Economic Growth outlined the logic of how increased productivity is associated with increased wages. Detail a situation where this is not the case and explain why it is not.

Change in labor productivity is one of the most watched international statistics of growth. Visit the St. Louis Federal Reserve website and find the data section (http://research.stlouisfed.org). Find international comparisons of labor productivity, listed under the FRED Economic database (Growth Rate of Total Labor Productivity), and compare two countries in the recent past. State what you think the reasons for differences in labor productivity could be.

Refer back to the Work It Out about Comparing the Economies of Two Countries and examine the data for the two countries you chose. How are they similar? How are they different?

Education seems to be important for human capital deepening. As people become better educated and more knowledgeable, are there limits to how much additional benefit more education can provide? Why or why not?

Describe some of the political and social tradeoffs that might occur when a less developed country adopts a strategy to promote labor force participation and economic growth via investment in girls’ education.

Why is investing in girls’ education beneficial for growth?

How is the concept of technology, as defined with the aggregate production function, different from our everyday use of the word?

What sorts of policies can governments implement to encourage convergence?

As technological change makes us more sedentary and food costs increase, obesity is likely. What factors do you think may limit obesity?

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• Book title: Principles of Economics 2e
• Publication date: Oct 11, 2017
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-economics-2e/pages/1-introduction
• Section URL: https://openstax.org/books/principles-economics-2e/pages/20-critical-thinking-questions

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Economics Critical Thinking

Teachers are invited to engage their students in this outstanding academic competition. The competition is open to all high school students who have taken an economics or economics-related course in school. There is no fee to participate.

Teams of 3 or 4 students will apply economic principles to a real-world voter issue given to them at the state final. Each team will have 30 minutes to prepare for their 15-minute oral presentation in front of a judge. This fast-paced challenge tests the students’ economic ingenuity and quickness of mind.  

The 2024 Economics Critical Thinking competition has concluded. Congratulations to the winning teams!

Winning Team in each division receives $500!

Review the rules for the 2024 Economics Critical Thinking Competition. 

​Review sample rubric and cases from past Economics Critical Thinking Competitions. ​

This is a qualifying event for the National Economics Challenge. The teams from the David Ricardo division and the Adam Smith division with the highest combined Economics Critical Thinking presentation score and Economics Challenge online test score will advance to the National Economics Challenge for their division

Prize for Economics Critical Thinking Winning Team: 1st place: $500

2024 Winners

First Place Team: Team Indigo   School: BASIS Chandler Teacher: Richard Aitken

Second Place Team: The Thorgregsons Schools BASIS Mesa Teacher: Greg Thorson

Third Place (Tie) Team: Rockhopper Penguins / The Thingamajigs School: University High School / BASIS Mesa Teacher: Megan Cassidy / Greg Thorson 

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Toward an Understanding of the Economics of Misinformation: Evidence from a Demand Side Field Experiment on Critical Thinking

Misinformation represents a vital threat to the societal fabric of modern economies. While the supply side of the misinformation market has begun to receive increased scrutiny, the demand side has received scant attention. We explore the demand for misinformation through the lens of augmenting critical thinking skills in a field experiment during the 2022 Presidential election in Colombia. Data from roughly 2.000 individuals suggest that our treatments enhance critical thinking, causing subjects to more carefully consider the truthfulness of potential misinformation. We furthermore provide evidence that reducing the demand of fake news can deliver on the dual goal of reducing the spread of fake news by encouraging reporting of misinformation.

The opinions and conclusions expressed herein are solely those of the authors and should not be construed as representing the opinions or policies of the sponsoring agencies and research partners. We thank Gustavo Castillo and Maximilian Hippold for their excellent research assistance. This study was reviewed by the University of Chicago IRB and granted an exemption (IRB22-1217). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

John List is the Chief Economist at Walmart but this research is not part of work at Walmart.

I thank SURA and Protección for funding this project.

MARC RIS BibTeΧ

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