Classroom technology

Here’s a list of some websites/apps that I recommend:

  • sli.do – very useful for quick feedback, generated wordclouds, and doesn’t require students to log in
  • Socrative – a nice way to present quizzes and measure student performance. Can be teacher paced so that you ensure all students have answered before moving on to the next question
  • Kahoot! – a fun quiz template
  • Typeform – a way to generate longer forms that are tailored to student responses

Qualtrics and Survey Monkey are great for running a survey, and purport to allow you to create a quiz, but in my experience lack the functionality required to be used in a classroom setting. I am very keen to find an intuitive quiz builder that allows students to see their score, and allows instructors to batch grade open ended questions and then export the results. So far it seems that Google Forms (here’s an example) are the best option.

Here’s a list of some resources that have been recommended to me, but I don’t currently use:

  • Narpod– allows interaction and student participation
  • Mentimeter— presentation software to encourage fun workshops

Business Ethics

This is a 2 day course that surveys a number of frameworks and models that can be used to cope with moral and ethical dilemmas. Famous cases will be used to provide a realistic grounding to the content and participants will be tasked to apply those concepts and discuss their insights. A particular emphasis is placed on the concept of justice, and how managers can apply these insights within an organisational setting.

The course is heavily group-focused and includes case discussion and role playing activities.

2020 Slide Deck.

Cases

  • Who’s Responsible for the Drawbridge Drama? by Mueller, U., and Schaefer, U., ESMT ES1042-PDF-ENG, 2010
    • Learning objective: The case introduces students to topics such as “responsible leadership” and “responsible business”. It also provides an engaging illustration of how people look at the same context or phenomenon, but reach very different interpretations and judgments.
  • Rajat Gupta“, by Healy, P.M., and Soltes, E.,, Harvard Case no, 117004-PDF-ENG
    • Learning objective: The case explores how a prominent and successful executive can engage in misconduct. In addition, the case explores the nature of illicit insider trading.
  • Through the Eyes of a Whistle-Blower: How Sherry Hunt Spoke Up About Citibank’s Mortgage Fraud“, by Waytz, A., and Kilibarda, V., Kellogg School of Management, Northwestern Univ. December 2014
    • Learning objective: The case helps students to gain experience resolving ethical dilemmas in which two values may conflict, such as professional duty and personal ethics. It enables students to identify behaviors that help a whistle-blower be effective and discuss how incentive structures, management, and culture play roles in promoting or hindering ethical behavior in organizations.

Primary readings

Secondary readings

Textbook

  • Crane, A., and Matten, D. Business Ethics (Oxford University Press, 4th Edition)

Further resources

An Inspector Calls is the classic literary depiction of how responsibility can be shared among many people. Although I find the social commentary to be frustratingly simplistic, there is a 2015 BBC Drama version that you may find worth watching. The 2017 Netflix Series, ‘13 Reasons Why‘ explores similar themes, but I haven’t watched it.

The 1957 movie, ‘12 Angry Men‘ is a classic. It shows how a natural drive to reach consensus can mask important insights, and that the role of Devil’s Advocate can be important in team settings.

Eyal Press’s 2012 book ‘Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times‘ is a rich and engaging collection of stories about people refusing to adhere to authority. It shows how whistleblowers are not typically anarchists who enjoy flouting rules, but people who value those rules so highly they insist on holding their superiors to them. It includes the story of a Serbian man who, in 1991, risked his own life to protect captured Croatians from execution, as well a Swiss police official who broke the law by giving entry permits to Jewish refugees in 1938.

Regarding the importance of involving the local community in a companies strategy, see Steve Jobs; testimonies to Cupertino city council, in 2006:

…and again in June 2011

The most famous whistleblowing case of recent times is Edward Snowden. Citizenfour is a critically acclaimed documentary:

For a contrarian view on sweatshops, see John Stossel:

My favourite documentary on Lance Armstrong is ‘The Armstrong Lie

A charming example of passing on a vavour is the music video to Clay Walker’s ‘Chain of Love‘:

Here’s Hans Rosling explaining why most of the world is better off than you think:

You can watch the PBS version of ‘Command and Control’ here.

Further courses

Quiz

Finally, you can test your understanding of the content, and provide me with useful feedback, by completing this quiz:

Behavioural Economics

This short course will survey the key findings of behavioural economics and explain how they relate to day-to-day management. Participants will receive a thorough understanding of how economic insights for decision making can be augmented with experimental economics.

The course will be interactive with numerous examples and opportunities to apply the concepts discussed.

After this lecture you should be able to: Apply a range of examples of behavioural anomalies to real business situations. Understand behavioural anomalies in light of an ecologically rational framework.

Pre reading: “Sun: A CEO’s Last Stand”, Business Week, July 26th 2004 (£)

Overview:

Recommended books:

  • Poundstone, William (2010) Priceless: The Hidden Psychology Of Value Oneworld
  • Kahneman, Daniel (2011) Thinking, Fast and Slow Farrar Straus and Giroux

Recommended articles:

  • Lambert, Craig “The Marketplace of Perceptions”, Harvard Magazine, March-April 2006 – A summary of chief insights from behavioural economics and neuroeconomics
  • Poundstone, W., (2011) “Prospect Theory” (Chapter 16) and “Ultimatum Game” (chapter 18) from Priceless: The Hidden Psychology of Value, One World – Good introductions to key concepts
  • Tabarrok, A., “A Phool and His Money” Review of PHISHING FOR PHOOLS: The Economics of Manipulation and Deception, by George A. Akerlof and Robert Shiller, Princeton University Press – A defence of standard economic theory against behavioural claims
  • Manne, H.G., (2005) “Insider trading: Hayek, virtual markets, and the dog that did not bark”, Journal of Corporation Law 31(1):167-185 – A defense of insider trading from the perspective of internal markets and corporate information flows
  • Smith, V. L. (2002) “Constructivist and Ecological Rationality in Economics” Nobel Prize Lecture – An explanation of the difference between constructivist and ecological rationality

 

Doing Business in Eastern Europe

Course outline: Doing Business in Eastern Europe 2019

Part 1: Pre class activities

Participants should read all of the following and submit a One Pager on one of them:

Part 2: Lecture and quiz

The lecture slides will be made available here.

powered by Typeform

Part 3: Class Assignment

Participants should select one of the countries under study and identify a potentially internationally competitive cluster. Using the format provided in the lecture, and the East Belarus mechanical engineering article as a guide, participants will submit a written report. The report should contain diamond analysis and cluster mapping.

The following clusters are not permitted:

  • Ship & Boatbuilding in Croatia
  • Romania Apparel Cluster

Useful resources:

Problem Solving and Decision Making

A 2-3 day course the leads participants through the 7 key stages of finding a solution using practical examples and plenty of team work.

Problem Solving and Decision Making is an intensive managerial programme that has proven successful in improving efficiency, performance and productivity. The course aims to provide practical skills and a management mindset rather than simply transfer knowledge. Participants are taken through the full problem-solving and decision-making cycle: from breaking down the issue, to prioritising and writing the action plan. They also practice communicating their proposal, an important and often overlooked aspect of the decision-making process. The course focuses mostly on experiential, proactive and practical learning: participants engage in individual and team problem-solving and decision-making, and receive constructive feedback to build on personal strengths and address limitations.

 

Resources:

For more on the Pyramid Principle:

For more content:

Tools:

  • Free website for drawing diagrams: https://app.diagrams.net/

Country Competitiveness Dashboard

I am an Affiliate Faculty Member of the Microeconomics of Competitiveness program at Harvard Business School, and a big fan of Michael Porter – his work consistently reminds me of the importance of bringing clarity to management practice.

I also like his inclination for frameworks rather than models. If your goal is to interpret and assess, as opposed to measure and predict, a framework is a critical analytical tool. One that I especially like is his explanation for what determines competitiveness. For example, consider the following slide (which I believe originates from here).

screen-shot-2016-09-29-at-13-03-20

I’ve given this framework a lot of thought, but I don’t think it fits as neatly into the Diamond model as is often claimed. For example in this NBER paper Porter (and co-authors) present an enlarged version:

screen-shot-2016-10-12-at-13-49-00

This clearly shows that the Diamond model is intended to be a more detailed view of the “Quality of the National Business Environment” segment. But consider something like nutrient rich soil, or a large natural harbour. One might think that constitutes an endowment. But it is also a relevant “Factor input condition”. Indeed what’s the difference between the “Supporting and Related industries” and “State of Cluster Development”? I suspect this is why Figure 3 above has dropped endowments and clusters, and renamed it a “Foundational Competitiveness Index”. I think this is a shame, because the “What Determines Competitiveness” slide is clearer, and more coherent, than the FCI.

I think Porter’s attempt to force fit the Diamond model into the Competitiveness index creates an opportunity to take the “What Determines Competitiveness” slide in a new direction. Indeed I think it complements nicely the “Growth is Like an iPhone” analogy:

In my attempts to merge the three level analogy with a template that my students can use in class, and with all appropriate nods to Prof. Porter, this is the “Country Competitiveness Dashboard“:

ccd

Rather than viewing the Diamond model as a subset of the “Business environment”, I see it more as a strategic tool that cuts across the whole Country Competitiveness Dashboard. In other words step 1 is to populate the dashboard, and ensure that you are covering all bases. Step 2 is to conduct a Diamond analysis – which is better suited at the cluster level than the national level anyway.

The endowments above are rooted in economic growth theory, but I am always struck at how important they seem to be when reading geopolitical accounts. The list below shows some of the typical go to areas when trying to understand the starting position of a country.

Finally, it is well worth reading Paul Krugman’s, Competitiveness – a dangerous obsession (Foreign Affairs, March/April 1994). When treated as a mercantilist trade “strategy”, or the conflation of corporate planning with national level decision making, attention to competitiveness can lead us down the wrong path. But when competitiveness is wedded to our understanding of economic growth, and the conditions required for entrepreneurship to flourish, the competitiveness framework is immensely beneficial.

Economic Freedom 101

dprk-dmsp-dark

Lecture handouts for the Jan 2020 version are available here.

Introduction

This short course provides provides a survey of global poverty and a discussion of the causes of prosperity. Particular emphasis is placed on the institutions required for market exchange, and the importance of economic calculation. As a satellite photo of the Korean peninsula makes clear, socialist planning is literally groping in the dark. We will look at the theoretical reasons behind this claim, and the empirical validation that economic freedom matters.

Prerequisites

The course does not rely on any previous study of economics.

Teaching methods

  • Lectures (3 sessions)

Textbook

The course is designed to tie into Chapters 4 and 12 of the following (amazing) textbook:

The website for the book contains an array of other resources: https://anthonyjevans.com/books/markets-for-managers/

An additional reading list is available here: https://anthonyjevans.com/course-readings/

An edited list of highly recommended articles from The Economist is here: https://anthonyjevans.com/the-economist-an-mba-reader/


Schedule

9am Session 1

Economics matters: The link between economic institutions and global prosperity

In this lecture I will ask some broad and fundamental questions about the application of economic theory to the real world, and the role of the economist as a force for making the world a better place. I will try to convince you that we have a fairly good understanding of what causes economic growth, and how important this is for raising living standards and improving people’s quality of life. In other words, economics matters.

10:45am Break

11:00am Session 2

Groping in the dark: Why socialist calculation is impossible

12:30pm Lunch

2:00pm Session 3

Economic transition in Central and Eastern Europe: Shock therapy or gradualism?

3:30pm Finish

If you’ve taken the course, you can check your learning with this quiz:


Can also include the Bag Game and the International Trade Game

Online learning

The covid-19 pandemic has prompted a mass transition from in class tuition to virtual learning. It’s an incredible pedagogical experiment, and I’m intrigued as to how it will play out. ESCP Business School was an early mover – our Turin campus made a complete switch online on February 23rd. I’m the Teaching & Learning coordinator for our London campus, and we have been anticipating and managing as smooth a transition as possible since then. We went fully online on March 16th [the day after I wrote the first draft of this article].

This crisis situation has prompted an immediate action, but it reflects a deeper trend away from the classroom. I feel well placed to react because I’ve made online learning a key part of my professional strategy. In 2016 I launched an online Managerial Economics course as part of ESCP’s “Executive Master in International Business” (EMIB). Since then I’d added a new online course every year, such that in 2019/20 my online teaching exceeded my in class instruction. I am a digitally minded person, and have loved the opportunity to develop such courses to be able to recognise more clearly the value of being physically present. For me at least, those two forms of teaching are complementary and teasing out how they interact has been satisfying.

This article isn’t intended to be updated in real time, and maybe it will become quickly outdated. But to start off with here are some key resources I’ve used recently:

It’s not obvious that teachers have the right skillset to create online courses.

The key skillset for a lecturer:

  • Knowledge of the content
  • Personable delivery
  • Ability to grade exams

The key skillset for an online instructor:

I see a major advantage for online courses being the opportunity to crowdsource and aggregate grading into quick, responsive, 360 feedback. My ideal grading system would be:

  • A web form to enter information and then WHAM it converts it into a report.
  • Students see each others and vote on which are the best ones.
  • Or, it just prints them all out and I grade them in one batch.

In terms of technology there’s a few different ways to create video content. If an economics instructor requires students to submit work using PowerPoint, they can reasonably expect that those students will either possess the skillset required to do so, or recognise the need to develop it. And student’s wouldn’t feel that the choice of format is a source of disadvantage. In a few years time the same will apply to the creation of a video. I see 4 options to create simple content.

  1. Video – the most obvious route is to use the video feature on a standard smartphone. Here’s an example. This can be done in a single shot without any additional resources. Here are some tips. This is the simplest way to record yourself, but I find it a little awkward when done as a lecture. If it’s more informal it’s more engaging, but slightly more complicated to plan. Using a light board is possibly the best way to do this. Social media platforms now have great video functionality. I like TikTok (here’s an example).
  2. Powerpoint with voiceover – this is probably the simplest, and I have several examples. There’s also products such as Adobe Spark that perform the same function but slightly slicker. Do be careful about whether to put the slides online as well, since this can reduce the likelihood of students watching the video. I use Camtasia to narrate over a PowerPoint screen record. Here’s an example. It also allows relatively easy editing but it’s not cheap and I’m sure there’s plenty of other options. Here’s some instructions for screen recording on a Mac. Quicktime has a very simple audio + screen capture device and it’s baked into Mac OS. See Tom’s Guide for some more.
  3. Dual video and slides – this is a great way to convey detailed content but in a personalised way (e.g. Andy Field). I’m keen to find simple software that allows a presentation recording, webcam footage, and note space. In other words I want to know what these guys use. I’ve been told that the following do it, but I’m yet to convince myself that they’re simple enough for me to use.
  4. Interactive powerpoint – for my EMIB course we had an interactive green screen. This puts the presenter inside the screen and permits interaction (e.g. drawing directly on the screen). It’s basically reading the weather. It’s harder to plan but the final result can be quite effective. For lecturing, I don’t a green screen adds much value over a plain background. A virtual set though, may be worth investing in!

I see four basic models for online learning:

Model 1: Your own pace

These type of courses remove students from the dreaded (and stupid) syllabus and allows us to package a course into a simple process:

  • Read this
  • Watch this
  • Listen to this
  • Do this

The platforms that I use and recommend are Coursera and Udemy. I’ve built a course on Teachable, but it’s expensive. I’ve also trialled Canvas, which looks good. Another option is Versal. (In the stampede prompted by the coronavirus I simply used the existing learning management system (our school uses Blackboard) because it integrates with grading and students already have password protected access. But if I were reaching out to non enrolled students I’d use something else.)

For economics instruction, I like the Foundation for Economic Education, but by far the best options are run by Marginal Revolution University. In particular these courses:

You could also do a  lot worse than simply watching Jacob Clifford’s YouTube channel.

For some non economics courses, consider:

Finally, my own course on Analytics (including Numeracy Skills Bootcamp; An Introduction to Game Theory; and Collecting and Presenting Data) follows a student led model. As does my Blended GMP courses on Microeconomics and Macroeconomics. A key thing to ensure is a structure, such that students pass through the modules on an appropriate timescale and remain motivated.

Model 2: Virtual classroom

When built well, student led classes can be very effective. But they can be a challenge to ensure consistent student engagement. It’s no surprise therefore that for many traditional courses that are having to transfer online, the prevailing course structure is important. The need to retain a timetable, and get students to interact, more closely replicates their previous experience. Don’t forget, one reason people pay for gym membership is the discipline of going to the gym. If students wanted a DIY alternative they’d already have chosen that, and would have saved a large amount of money in doing so. So how do you keep the class together?

Model 3: Remote classroom

Remote classrooms use the technology of the internet to distribute content but don’t fundamentally differ from a distance degree. The key value being provided by the university is therefore the grading of assignments and student feedback. They are paying not for the content per se, but to have a professional instructor grade it for them. Automated quizzes don’t cut it in this context. Examples:

Model 4: The voyeur

This is when a physical course is delivered as normal but participants receive remote access. This has a bigger emphasis on hardware needs (e.g. high quality cameras and mics throughout the audience) and editing. But it’s an easy way to grant access to those unable to attend physically. Some examples:

I think for all serious online courses (i.e. ones where students pay big money to a reputable institution), the key factors for success:

  • Strict schedule
  • Tough assessments

Finally, I have taken, and recommend, the following online courses:

and I’ve enrolled on/intend to audit:

It’s never been easier to learn online, and thanks to coronavirus it’s never been easier to teach online. Experiment and have fun!

Dynamic AD-AS model

I am a big fan of the Cowen/Tabarrok Dynamic AD-AS model. This page contains resources for my students who want more information.

Here is a video:

 

Here is a presentation:

You can download the slides here.

I published a short blog post called “The policymakers view of the great recession – a dynamic AD-AS analysis.”, and an academic article called “A Dynamic AD-AS Analysis of the UK Economy, 2002-2010“.


There are three components to the dynamic AD-AS model.

The first is the Solow curve, which shows the growth rate that would exist (i) if prices were perfectly flexible; (ii) given the existing real factors of production. It can be derived from the Solow growth model and since this treats capacity as being independent of inflation, it is depicted as a vertical line. Improvements in research & development; better infrastructure; increased competitiveness; higher quality education and training; labour market flexibility; or natural events such as more conducive weather would all constitute a positive productivity (or “real” or “supply side”) shock, increase the Solow growth rate, and shift the Solow curve outwards.

The second component is the Aggregate Demand (AD) curve. This can be defined as combinations of inflation and real growth for a specified rate of total spending, and is far more intuitive than the traditional AD curve. This is because instead of being based on other curves (necessitating an explanation of the Pigou effect, for example) it is instead based on a dynamic version of the equation of exchange:

M+V=P+Y

M denotes the growth rate of the money supply, V denotes velocity growth, P denotes inflation and Y denotes real GDP growth. Since the AD curve simply shows how any given amount of (M+V) can be split between P and Y, it will only shift if there is a change in M (i.e. the money supply) or V (confidence).* In terms of what constitutes a velocity shock, we can switch from looking at the left hand side of the equation (our posited increase in total spending) to the right hand side of the equation (how it is being spent). After all an increase in spending must be spent on something. The composition of total spending is household spending, business spending, and government spending (we’re assuming a closed economy).

AD=C+I+G

Potential sources of increased spending are thus fiscal policy (either changes to government spending or changes to taxes) or wealth effects (where “wealth” means the value we place on the assets we own). An important caveat is that generally speaking changes in the growth rate of V tend to be temporary and thus only changes in M can generate sustained inflation.**

If prices were perfectly flexible, the Solow curve and AD curve would suffice. For example, if the Solow growth rate were 3% and the central bank increased M from 5% to 10% this would lead to an equivalent increase in inflation (from 2% to 7%).

However if prices aren’t perfectly flexible, the dynamic AD-AS model shows how the economy can deviate from potential GDP growth. This requires the third component, the Short Run Aggregate Supply curve (SRAS). The SRAS shows the relationship between P and Y for a given expected inflation rate. As with the traditional AD-AS model, the labour market plays a key role in economic adjustments, and so “sticky” wages (i.e. those that don’t adjust quickly to new conditions) are problematic. For example, if revenues are rising at a faster rate than wages (which constitute a large share of the firms costs), firms will appear to be profitable and will expand their output. Similarly, if prices fall quicker than wages, production will appear to be unprofitable, and they will reduce output. It is due to inflation expectations that we might expect wages to lag behind prices – if inflation is higher than expected output will rise. If inflation is lower than expected output will fall. This explains the upward sloping shape of the SRAS curve.

Underpinning the SRAS is the concept of the signal extraction problem, which implies that in the short run (i.e. whilst prices are adjusting) there may be a positive relationship between inflation and real growth. (This is the conventional argument that money is only neutral once prices have adjusted. One of the nice things about moving away from a “short run” vs. “long run” distinction is that it’s less likely that students fall into the trap of treating these concepts as passages of time. To say that prices are “sticky” is not really to say that it takes time for them to adjust, but that there are costs involved in doing so).

The reason the SRAS curve is flatter below Y* is because wages are especially sticky in a downwards direction. Basic money illusion means that workers tend to be hostile to nominal wage cuts. And the SRAS curve is steeper above Y* because there’s a limit to how fast the economy can grow – it can’t indefinitely exceed the Solow growth rate.*** Given that the SRAS holds for a given rate of inflation expectations, the only thing that can cause it to shift is a change in those inflation expectations. This may appear to underplay the importance of the SRAS curve, but in fact it clarifies the difference between SRAS and the Solow curve. It is tempting to think of the difference in terms of calendar time, for example that a period of bad weather, causing a poor harvest, will primarily affect the SRAS. This is because it is a temporary event that hasn’t altered the underlying production capacity, and if there is nothing to say that bad weather will cause a reduction in supply in the long run, it shouldn’t affect the long run supply curve. However the dynamic AD-AS model makes it a lot clearer to understand why the above reasoning is incorrect. An adverse weather event – even a temporary one – is a real shock, and will therefore impact the Solow curve and not the SRAS. The SRAS shows how the price mechanism facilitates but also can disrupt the adjustments in response to either real (Y*) or nominal (AD) shocks. It can be somewhat complicated (and sometimes arbitrary) to distinguish between SRAS and LRAS shocks in the traditional model. The dynamic model treats all real shocks as Solow shocks and is therefore much easier to use.


It is tempting to treat M as monetary policy and V as fiscal policy but this wouldn’t be correct. Most central banks use interest rates (specifically a short term risk free rate) as their main policy tool. If the “velocity of circulation” refers to the speed at which money turns over, then this is a function of people’s demand to hold money (relative to their demand to hold goods and services). In other words V is the inverse of the demand for money. If the demand for money is high, people hold onto cash, and velocity is therefore low. Hence central banks can either affect the money supply, or try to influence the demand for money by manipulating the price (i.e. interest rates). This actually helps aid a discussion about quantitative easing. Given that interest rates are very low many central banks have reinstated the quantity of money (through the process of quantitative easing) as a policy tool that can be used in addition to interest rates.

** An increase in C in the dynamic model implies an increase in the growth rate of C, relative to I and G. Indeed this demonstrates a weakness in fiscal stimuli because it is impossible for a permanent increase in the growth rate of G. At some point it is likely that an increase in G that leads to a positive AD shock will at some point reverse itself. Indeed this also implies that when a central bank reduces interest rates this will also be self-reversing. As Cowen and Tabarrok point out (p.257) this reinforces the notion that changes in the growth rate of C, I or G do not change the rate of inflation in the long run. Given that shifts in V will tend to be temporary it is.

*** The above could also be considered a “Lucas” curve, since it follows his islands parable and emphasises the labour market. We might also think of it as a “Hayek” curve if we focus more on the capital market. Entrepreneurs confuse a temporary reduction in real interest rates (due to an increase in the money supply) with a permanent one (or at least one consistent with an increase in real savings) and invest in capital-intensive production plans. The Austrian claim is that this will be self-reversing and bring on a recession. We can incorporate this into the analysis here by stressing that particular increases in AD (i.e. when money supply exceeds the demand to hold it) will – as Cowen and Tabarrok argue happens ordinarily – cause a reverse shift in AD later on, but also end up causing a reduction in Y* through a negative shift in the Solow curve. Monetarists would say an increase in AD ultimately leads to an increase in P. Austrians would say that it increases P and reduces Y*.