Old enough to remember?

Those of us who are getting a bit long in the tooth tend to regard events of say a decade ago as pretty recent - so the eleven years that have passed since the Bank of England was made independent seem to have come and gone in a flash! The departure from the ERM in 1992 (can you remember what you were doing that night?) and the end of the dot-com boom also fit into that category for this author!

But for our new students who begin their study of economics in September, these landmark, perhaps watershed events are a dim and very distant memory if at all. I was reminded of this when reading the excellent Guardian editorial today “From boom to doom and gloom”. which ends up calling for the fiscal rules to be relaxed in the current fall out from the credit crunch.

When we start teaching again in September the economic picture will most likely have worsened somewhat ... I must remind myself to build up a collection of newspaper front page headlines in case students have forgotten to order papers for the beach! - but for most 16 and 17 year olds, all they have ever known is a growing economy and low inflation.

“Had our teenager taken an interest in economic affairs (although he or she would surely have something better to think about, like the new Will Smith film) they would know the economy was in big trouble. Yet that 16-year-old would only just have been born the last time there was a single quarter of falling national income. All they would have ever known was a growing economy.”

Macroeconomics has suddenly got a whoel lot more interesting again and it will be fascinating to hear what our students think of the best ideas and prescriptions for managing our way through 2009 - which promises to be a very difficult year for the economy.