William Nordhaus

One question = many answers in William Nordhaus’ lessons in economics

To convince his students the complexities of economics and the fact that two opposing economic theories might both be “right,” Sterling Professor of Economics William Nordhaus sometimes tells them a story about the famed Depression-era economist John Maynard Keynes. He wants them to understand that there are nuances, and uncertainties, when it comes to economic analysis or prediction. Nordhaus, a longtime Yale faculty member and former University provost and vice president for finance and administration, was awarded the Harwood F. Byrnes/Richard B. Sewall Teaching Prize for “the teacher who has given the most time, energy, and effective effort to helping undergraduate students.”

What do you most enjoy about teaching at Yale?

Let me count the ways. I particularly enjoy the students. They are just an extraordinary group of students. Of course, they’ve changed so much since I came here. When I came here they were all men, and moderately homogenous in their background. Now, look out on the classroom, and you are looking out at the world. You see people from all over.  But above all, they’re very, very smart.

One thing that I really like is that we have a very open-minded group of people here. They come in, they’re curious — sure they have some misconceptions and they have some preconceptions — but basically, they want to learn about the world and about the economy. So that is really the greatest opportunity, that you are talking to people who want to learn and are open minded.

I also enjoy the fact that during a semester or during the course of their time here, I can see my students’ social, personal, and intellectual growth. They come in being very naïve about things, and when they leave they are just fantastically sophisticated and nuanced in their views. It’s just a great pleasure.

Is there a teacher you’ve had who has especially inspired you?

I had so many inspiring teachers. I’ll tell just a couple of stories. One was when I was in the third-grade: There was a teacher who made a great impression upon me. I went to a school called Ranchos, which was in Albuquerque, New Mexico. I remember coming into class one day and my teacher dressing down some students, saying to them: “You have to remember that what you’re doing is like building a house. Every grade is a layer of bricks, and every day you put a brick in the house, and when you miss a class, you leave a hole in your wall.” That really made an impression upon me. I sometimes tell that to my students, although I’m not sure they are as impressed as I was as a third-grader.

Then when I got to Yale and MIT as a graduate student, there were just so many teachers who inspired me. One I would point to particularly was my colleague Jim Tobin, a great economist. I had him as an undergraduate. He had just come back from working with President Kennedy as his economic adviser. He was so excited about what was going on and how the “new economics,” as it was called — Keynesian economics, as it is known today — was just getting into the mainstream of American political economy. He was excited about its application but he was also excited about teaching it. Aside from being a great teacher, he was a Nobel Prize winner and probably the greatest monetary economist of the second half of the 20th century.

What have your students taught you?

A lot, is the answer. As a new teacher, you’re not only insecure, but you think you know everything. One of the things I rapidly learned is that just presenting material is a very bad idea because students don’t like that, or learn from it, or retain it. Another thing I learned from my students is how important it is to present alternative viewpoints. It’s so critical for them but also for you as a teacher to be able to present what I call “the warring schools” of macroeconomics. There are so many different points of view. They aren’t well represented in the popular press, but there are some serious controversies in macroeconomics. One of the things I learned is to take them seriously, and one of the things I most enjoy about teaching — coming back to that question — is presenting the warring schools in a fair way. So I think I’ve succeeded in a class when I present something and they say, “But do you think it’s right?” and I say, “You think that through.” So when they say that about something that I think is cuckoo, then that is the ultimate success in teaching.

If there is one thing that you want your students to learn from you, what would that be?

I’d say there’s not just one, but I’ll mention a couple. One is that I very much hope they will get the idea there’s not one simple answer or even one complex answer to a question — that many questions have multiple complex answers. This is particularly true in macroeconomics, where we take something like the budget deficit. We’ve had this controversy now for five years: Should governments lower budget deficits or raise budget deficits? There’s an austerity school that says we should lower them and there’s a Keynesian school that says they should raise them — simplifying but not oversimplifying the discussion. We talk about that in class and I say, “Well, they’re both right. And they’re both right in the complex sense: One’s right in the long run, and one’s right in the short run.”

They always don’t like that; they want there to be answer. So then I say, “You know about light. Is light a wave or a particle?” They’ve all had enough physics to say, “Both!”  So I say, “Okay, if light can be both a wave and particle, then both of these views can be right.”

So I think one of the things I like to get across is: Don’t be monocausal. Don’t be monocausal for two reasons: One is that things aren’t monocausal; there are actually complexities. But the other thing, just as important, is that in the social sciences, not like physics, things change. So things I learned as an undergraduate are no longer right. We live in a different world now than we did 10, 20, or 30 years ago. So you have to have enough flexibility of mind to change as the circumstances change.

There is a famous line from John Maynard Keynes, when in the middle of the Depression somebody said to him, “Mr. Keynes, this is a different answer than what you had in your book in 1930.” Keynes answered, “When the facts change, I change my mind. Pray, sir, what do you do?” So that’s something I like to get across.

View video clip from William Nordhaus’ interview.