Imagine State Department heavyweight Anne-Marie Slaughter ’80 or Obama-era U.S. Trade Representative Michael Froman ’85 as students in what is now Princeton’s School of Public and International Affairs (SPIA), grappling with microeconomic ideas such as consumer preferences and variable costs — but not the wider, more systemic forces that drive economic recessions.
That’s the current reality for SPIA students: at Princeton, every SPIA graduate is required to take ECO100: Introduction to Microeconomics or have Advanced Placement credits from high school to satisfy the major’s economics requirement. However, there is no similar requirement for a macroeconomics course — i.e. ECO101: Introduction to Macroeconomics.
The result? Many future policymakers learn about individual firms’ decisions to enter and exit a market but remain unaware of what causes a recession. They understand variable and fixed costs for businesses, but not how government spending affects the overall economy.
This current curriculum fails to equip our future policy leaders with the economic knowledge most relevant for their roles. For SPIA majors, Princeton’s introductory macroeconomics course is arguably more useful than its introductory micro, and this should be reflected in the degree’s requirements.
Microeconomics and macroeconomics touch on many similar concepts, but their applications diverge substantially — especially for policymakers. Microeconomics focuses on individuals and firms, and allocation of scarce resources. For example, students learn how a consumer allocates a fixed budget between two goods, concepts relevant to future business owners, and the structure of individual commodity markets.
Macroeconomics, on the other hand, tackles the economy as a whole. It focuses on aggregate consumer spending, national income, and how government policies influence these factors. Instead of examining how a single consumer decides between apples and oranges, it studies how the financial sector, tax policies or interest rates affect overall consumer spending and economic growth.
Consider international trade. In micro classes, including ECO100, trade is often reduced to a cursory overview of tariffs and their effects on supply and demand curves. Macroeconomics, on the other hand, studies the reasons why nations trade, the complexities of trade deficits, exchange rates, and international capital flows. For future presidential advisors who would have sway over potential tariffs — like the ones that Trump has proposed and will continue to propose, partially on the assumption that they would decrease the trade deficit — this knowledge is indispensable.
Moreover, introductory macroeconomics acknowledges pervasive market failures that microeconomics mostly glosses over, and it teaches prudent government responses. While ECO100 teaches that markets are efficient except in specific cases, macroeconomics confronts the reality of systemic issues like unemployment and inflation, and the critical role government policy can play in addressing them, using lessons learned from the 2008 subprime mortgage crisis and the Great Recession.
There’s also a risk in only teaching policymakers microeconomics without the broader context macroeconomics provides. Over-reliance on micro principles can lead to misguided policies when applied to complex societal issues. Take, for example, an idea popularized by best-selling non-fiction books “Freakonomics” and “Nudge,” with reasoning based on assumptions common in micro: that small economic incentives or tweaks to systems can significantly change behavior. While useful in certain contexts, this micro-level thinking can oversimplify and misdirect policy when not integrated with macro-level understanding.
The flagship story from “Nudge” is a great example of this: authors Richard Thaler ’73 and Cass Sunstein posit that switching the default option on organ-donor forms from opt-in to opt-out would increase organ donation in the United States. But this is an excessively tiny non-solution to what turns out to be a systemic problem. Due to systemic barriers to organ donation, opt-out systems don’t outperform opt-in systems. Furthermore, increasing the number of people who opt in to being organ donors doesn’t necessarily increase the number of organs the system is able to handle. This idea relies on microeconomic principles — specifically, behavioral economics — and proposes personal choice as a solution to a systemic issue.
It’s not that microeconomics lacks value, even for policymakers — far from it. An example: understanding the “substitution effect” — a concept describing how people consume when one of their choices becomes more expensive — is crucial when creating policies such as incentivizing electric vehicles over gas-powered cars. But micro thinking is not always applicable, even to economic problems.
I understand SPIA’s desire to minimize the burden of prerequisites. Requiring both macro and micro would be cumbersome for SPIA majors, and the Economics department currently requires intro macro and micro for any intermediate-level macroeconomics class. But for future policymakers, who are not constructing macroeconomic models based on “micro-foundations,” they don’t need much micro to understand macro.
When I took ECO101: Intro to Macroeconomics with Professor Alan Blinder ’67, there were many students who had little to no economics knowledge. To account for this, Professor Blinder incorporated essential micro concepts — supply and demand and externalities — into the first week of lectures, ensuring everyone was on the same page. This approach could easily be replicated for SPIA students at the intermediate level, integrating necessary micro principles into macro courses.
The world is becoming increasingly complex, and the economic challenges we face are more interconnected than ever. Climate change, global pandemics, financial crises — these are macro-level issues that require policymakers to have a firm grasp of macroeconomic principles.
If SPIA aims to prepare students for leadership roles in public and international affairs, it should equip them with the tools to understand and address these challenges. Making macroeconomics a prerequisite over microeconomics isn’t about diminishing the importance of one field, it’s about prioritizing the knowledge that future policymakers will most need.
In an era where economic literacy is crucial for effective governance, it’s time for Princeton to rethink its SPIA curriculum. Let’s ensure that the next generation of public policy leaders — whether they’re sitting on the Supreme Court or negotiating international treaties — are well-versed in the systemic dynamics that shape our economy.
Eleanor Clemans-Cope (she/her) is a junior from Rockville, Md. studying economics. She can be reached on Twitter at @eleanorjcc or by email at eleanor.cc[at]princeton.edu. Her column, “Eyes on the Tiger,” runs every two weeks on Wednesday. All of her columns can be read here.