Michael Salemi is Professor of Economics at the University of North Carolina at Chapel Hill. He received his Ph.D. from the University of Minnesota–Minneapolis. Salemi is the author of more than forty published articles in macroeconomics, domestic and international monetary theory, and economic education. His recent projects deal with optimal monetary policy, strategies for reforming the college-level principles of economics course, and using discussion of classic and current articles to teach undergraduate economics.

Interview with Michael Salemi

What attracted you to economics as a career and what led to your interest in teaching?

As a college freshman, I enrolled in an honors course on the philosophy of education taught by Basil O’Leary, a LaSallian Christian brother. Basil was chairperson of the St. Mary’s College economics department. Because I liked the education course, I enrolled in Basil’s economics principles course which he taught using Alchian and Allen. After two of Basil’s courses I decided to major in economics.

Basil never lectured or explained the text. He asked questions. Basil had a huge impact on the way I looked at the world then and the way I look at it now. I trace my interest in active learning generally and the inquiry approach in particular to Basil. And I have always considered myself fortunate that I knew early in my college career that I wanted to be a professional economist and educator.

Who has had the biggest influence on your interest in economics and the development of your career?

While Basil O’Leary provided me with an introduction to economics, the person who had the biggest influence on both my interest in economics and the development of my career is Thomas Sargent. As much as anyone, Tom embodies the “Minnesota Style” which I admire and attempt to emulate. For me, the Minnesota Style means work hard, inquire deeply, bring theory to the problem, and don’t claim too much.

How would you describe your style as a teacher? Are there characteristics that a person has to have in order to be a great teacher?

I would describe my teaching style as a combination of stage manager and gunnery sergeant. I prefer to teach courses where I can interact with students on a daily basis. In such a course, I think of myself as creating learning opportunities and managing their use. I firmly believe that productive student participation requires that I create good opportunities for that participation--opportunities that focus on important course ideas and provide meaningful challenges. I also believe that I must listen very carefully to what students say in the classroom. I am at my best when I am helping students work through exercises, discuss readings, or participate in other class activities.

I expect students to prepare skillfully and completely for class and to participate fully in class activities. I am not shy about communicating my expectations and taking steps to ensure that they are met. That is the gunnery sergeant part.

Are there some concepts that you believe are really important for you to get across to students in introductory classes? What are some of the “tricks” that you use to get key points across?

Let me focus on two concepts that I believe are important, powerful, and under-taught in the principles course: reservation price in micro and the real rate of interest in macro.

I use reservation prices in many contexts in the principles course. For example, I first derive a demand schedule in class by having students participate in a second price auction for a unique item (a University of California Santa Cruz banana slug T shirt this semester). Participants in a second price auction should bid their reservation price. Reservation prices are “tipping points.” If a good has a market price greater than your reservation price, you are out. If the price is lower, you are in. I find it very useful to ask students to consider factors that determine a person’s reservation price. A person’s reservation price is likely to be lower when she has good substitutes available.

Peter Kennedy argues that the real rate of interest is the most “under taught” concept in the principles course. I agree. The Fed uses the federal funds rate as its policy instrument implying that the principles course should focus more on interest rates and less on money supply.

For decision makers it is the real rate rather than the nominal rate that matters. To explain why, I ask students to think about the real rate as the “consumption bonus” for saving and the “consumption penalty” for borrowing. I follow Irving Fisher and argue that, in the long run, the real rate of interest is determined by the patience of the members of a society and the productivity of the nation’s capital.

There is a side benefit to teaching the real rate in the principles course. When the Fed credibly commits to low and stable inflation, decision makers can be confident that the real rate will turn out to be the rate they expected when they made decisions. A benefit of a credible low inflation policy is the resulting stability in the real rate--an idea that principles students grasp readily.

What are one or two of your favorite topics that you look forward to covering in your class? Why are they favorites?

In the principles course, I love to cover specialization. I have created an exercise that I call the “survivors” in which four persons with different skills are marooned on an island and attempt to harvest berries and catch fish. Because the survivors have different skills, who should specialize in each task is an important question. In addition, the example explains why the production possibilities frontier for the survivors is concave. Another of my favorite strategies for teaching specialization is to have students read and discuss the first four chapters of The Wealth of Nations.

Also in the principles class, I love to cover externalities, market failures and the Coase theorem. I propose at the beginning of class to smoke a cigar and ask students their reservation bribe--the largest amount that each student would be willing to pay to keep me from smoking. It is not hard to motivate market failure when the private cost is the cost of the cigar and the social cost is the private cost plus the sum of all the “bribes.”

Many economics teachers are looking for activities, games, and interactive exercises that will bring more life to their classes. What are some of the things that you do in this area?

My principles course includes a variety of activities, games and interactive exercises. Students participate in a double oral auction. They discuss Adam Smith and R. A. Radford. They keep a graded journal in which they are required to post news articles that show the relevance of economic concepts and to analyze those articles using concepts they are learning in the course. I have web pages supporting my principles, honors principles, and undergraduate financial markets courses that includes copies of the exercises I use. Those interested can go to www.unc.edu/~salemi.

How important is homework to the understanding of economics? What types of homework do you assign in your large lecture classes?

At UNC, the large enrollment principles course will serve 420 students and be supported by recitations of under 30 students each. The recitations are taught by graduate student teaching assistants. I plan recitations where students are either participating in an exercise or debriefing an assignment. For example, I make the first journal assignment in the first week of the course. Students are expected to come to their recitation with a copy of the news article they have chosen and a written interpretation of the article. The recitation is dedicated to reports that the students make about their articles and analyses--first in groups and then in front of the class.

Sometimes unexpected things happen in the classroom. What are your two or three most memorable classroom experiences?

During one class years ago, I noticed that a student sitting on my right and in the second row of seats had fallen asleep…deeply asleep. His head was tipped back, his mouth open, and his tongue in evidence. I stepped from behind my desk and moved to the student’s row while continuing to teach. The student slept on. I then slid into the student’s row and moved sideways until I was knee to knee with the sleeping student. From that position I continued to lecture. About 20 seconds later, the student awoke, looked up, saw me in close proximity, and managed somehow to widen his eyes to twice their normal size. I never noticed him sleeping again.

More recently, I was teaching as a guest in a colleague’s teaching-skills seminar. The building was under renovation and we had to hold the class in a small library with a polished linoleum floor. In the midst of the presentation, I must have leaned forward a bit too far in my seat. The chair shot out from behind me and I did a perfect pratfall. It happened so suddenly that one of the students asked whether I did it on purpose. I took this as a reminder never to take myself too seriously.

What are some of the most common misconceptions among the students in your introductory economics classes?

There are two sorts. The first are misconceptions that have more to do with students being first year students. The second sort is particular to economics.

In recent years, I find that first year students under estimate the amount of work it will take to do well in one of my courses. Many seem to believe it is sufficient to come to class and study a bit for the examination. While I do my best to explain what is required, it seems that some either do not listen or think that my cautions apply to others rather than to them. Thus, I still award F’s and D’s.

Many students think that only students who are analytically minded and interested in a business career will find economics useful and enjoyable. I strongly disagree and work hard to explain that economics is a way of thinking that helps everyone understand the world they live in.

You are at a major state university with a large graduate program and strong emphasis on research. How does this influence the quality of teaching at the under-graduate level?

The University of North Carolina at Chapel Hill is a research university. It is also a university that values education and good teaching. Given my interests in macro theory and economic education, it has been a very good place for me to spend my career. As evidence, I am currently Bowman and Gordon Gray Professor of Economics--holding a term chair that is awarded to faculty who are excellent teachers and productive scholars. I am proud of this honor because it is awarded by university colleagues who reviewed my teaching portfolio and visited my classes.

At the University of North Carolina, you not only teach large lecture introductory classes, you also provide teacher training and direction for the students in your graduate program before they are put in the classroom. Tell us a little bit about that training and what you are trying to get across to beginning level teachers.

In our beginning teacher training program that the department requires of every teaching assistant, we try to emphasize a few high-value ideas. The first is that teaching well is a skill that, like any other, can be learned. A corollary is that all teachers must engage in self-assessment in order to continue getting better. A second idea is that what matters in education is what students learn not what teachers say or do. If one asks novice teachers how their classes went, they will respond by explaining what they covered and how cogent they think their coverage was. A professional teacher learns how to target and monitor student learning. A third idea is that a few simple practices will help most novices be better teachers. These include avoiding economic jargon, creating concrete examples and presenting them before presenting the abstract counterparts, using good chalk board or white board technique, and calling students by name. A fourth idea is that an effective instructor helps student organize the subject matter of a class in advance of the class by use of an outline or some other device. When instructors use “advance organizers” students are better able to move course information into long-term memory. Our teacher training program offers much more but it starts with these four ideas.

You recently served as Chairman of the Committee on Economic Education of the American Economic Association. What has the AEA done to promote excellence in teaching and the overall quality of economic education?

The CEE has done and continues to do a lot to promote excellence in teaching and the overall quality of economic education. The CEE produces high quality and well attended sessions at the Allied Social Science Association meetings. Members of the CEE regularly organize economic education sessions at regional association meetings as well. The CEE sponsors the Teaching Innovations Program (TIP), a three-phase program to help post-secondary instructors of economics introduce interactive teaching strategies into their course. TIP is supported by a $670,000 grant from the National Science Foundation. TIP offers participants a workshop experience, follow-on instruction as they introduce chosen strategies into their courses, and opportunities to write about their own teaching innovations. CEE awarded the first Certificates of Achievement to 17 TIP participants who completed two follow-on instructional modules at its January, 2007 meeting. The CEE also organizes research projects on important economic education questions. In recent years, CEE has spearheaded research on the efficacy of teaching with technological innovations and on the question of whether or not economic instruction has long lasting beneficial effects on the thinking and decision making processes of students.

You have also been active in the Advance Placement program in economics. Tell us about your involvement with A/P economics.

Actually, I have not been involved with AP economics. My closest contact with secondary economic education has been my work as an instructor in the Economics for Leaders (EL) Program offered by the Foundation for Teaching Economics. The EL program builds on a wonderful model. High school juniors and high school economics teachers are brought together for a week. In the morning, two college economics professors and one mentor high school teacher teach a basic economics curriculum to the high school students while the high school teachers watch. In the afternoon, the high school students take a leadership course and the high school teachers talk shop with the professors and the mentor teacher.

How have changes in technology influenced your teaching? How do you use various technological tools in your introductory large lecture classes at UNC?

Technology has affected my teaching in many ways. (a) I communicate with students via email more than through office visits. (b) I teach my large enrollment principles course using PowerPoint presentations. (c) In the principles course, I use the CPS system to interact with students during class. CPS is the eInstruction “clicker” system that allows me to interact with my students. I connect a radio receiver to my laptop. Students buy, register, and use a radio sender to participate in class activities. (d) I assign Excel exercises in economics courses at every level. (e) I show students how to download data from the web and to use it to answer questions of interest. (f) I routinely create a web page as an organizational device and repository of information for each undergraduate course I teach. (g) I use the web to gather news articles and other media pieces of relevance to the course. I frequently assign students to do the same.

Has economic education improved or regressed in recent years?

If you mean by economic education the quality of instruction, I believe that the average level of instruction has improved but the variance has also increased. If you mean by economic education, research and other programs targeted to the teaching and learning of economics, I believe without question that economic education has greatly improved in the last 25 years. The quantity and quality of submissions to the Journal of Economic Education and the impact of JEE articles on economic education alone justify my conclusion.

What do you consider to be your greatest success in the area of economic education?

I believe my greatest success has been the work I have done with W. Lee Hansen on adapting the ideas of Mortimer Adler to discussion of economic literature and to the economics classroom. Lee and I were fortunate to be able to provide an overview of that work in Discussing Economics: A Classroom Guide to Preparing Discussion Questions and Leading Discussion, which was published by Edward Elgar in 2005.

What advice would you give a young person with a strong desire to become a great teacher?

My advice would have two parts. First, I would advise the young person to think of teaching and research as compliments rather than substitutes. Someone who creates knowledge is, other things equal, a more effective instructor than someone who does not. Someone who has produced a good research record is also a more respected educator which is very helpful when one is trying to get things done. Second, I would advise the young person to look for the good teacher inside of him or herself. I believe that good teachers learn which of their traits are most conducive to communication and instruction and develop those. I believe there is a good teacher residing in all of us and that it is better to discover that good teacher than to try to imitate someone else.