Teaching to do economics with the computer

Abstract

This paper presents the course "Doing Economics with the Computer" we taught since 1999 at the University of Bern, Switzerland. "Doing Economics with the Computer" is a course we designed to introduce sophomores playfully and painlessly into computational economics. Computational methods are usually used in economics to analyze complex problems, which are impossible (or very difficult) to solve analytically. However, our course only looks at economic models, which can (easily) be solved analytically. This approach has two advantages: First, relying on economic theory students have met in their first year, we can introduce numerical methods at an early stage. This stimulates students to use computational methods later in their academic career when they encounter difficult problems. Second, the confrontation with the analytical analysis shows convincingly both power and limits of numerical methods. Our course introduces students to three types of software: spreadsheet and simple optimizer (Excel with Solver), numerical computation (Matlab) and symbolic computation (Maple). The course consists of 10 sessions, we taught each in a 3-hour lecture. In the 1st part of each session we present the economic problem, sometimes its analytical solution and introduce the software used. The 2nd part, in the computer lab, starts the numerical implementation with step-by-step guidance. In this part, students work on exercises with clearly defined questions and precise guidance for their implementation. The 3rd part is a workshop, where students work in groups on exercises with still very clear defined questions but no help on their implementation. This part teaches students how to practically handle numerical questions in a well-defined framework. The 4th part of a session is a graded take home assignment where students are asked to answer general economic questions. This part teaches students how to translate general economic questions into a numerical task and back into an economically meaningful answer. A short debriefing in the following week is part 5 and completes each session