11-18-2024
It’s important for students, from the primary- to higher-education levels, to gain basic understandings of math, English, and the sciences to function in today’s workplace. Kevin Mumford, professor of economics and Kozuch Director of the Purdue University Research Center in Economics, believes that economics should also be included in students’ toolboxes.
“We need students to understand economics so they can become informed citizens,” he told an audience at the Greater Lafayette Commerce Economic Forecast Luncheon. “As they become adults and voters, they should understand there are often unintended consequences of public policy.”
Mumford referenced surveys taken in 2022 and 2024, where adults were given a list of policies and asked which ones would decrease inflation, regardless of whether the respondents supported or opposed them.
In 2022, the top five responses were increasing domestic oil production, price controls, decreasing interest rates, decreasing taxes, and reducing aid to Ukraine. In 2024, the top responses were price controls, increasing taxes, decreasing interest rates, increasing tariffs, and increasing antitrust regulation. In reality, only two of the top five responses each year (increasing domestic oil production, reducing aid to Ukraine, increasing taxes, and increasing antitrust regulation) would have decreased inflation. The other policies that people thought were most likely to decrease inflation would have actually had the opposite effect.
Mumford pointed to other policy decisions, such as stimulus checks sent out in response to the pandemic, which contributed to high inflation, and the cancellation of student debt, which provided far more benefits to high-earning college graduates than to those with lower incomes, as missing the intended mark. He’s concerned about a proposal in the state of Indiana to replace an economics course requirement for graduation with one for personal finance.
“It’s important for students to understand basic economic concepts like supply and demand, international trade, fiscal policy, and the role of financial institutions,” he said. “When it comes time to make policy decisions in these areas, I believe it’s better to get input from as wide a variety of people as possible. And it is important that citizens and voters understand all of the implications, intended and unintended, of the proposed policies.”
