1988 Articles

On the Market for Principles of Economics Textbooks: Innovation and Product Differentiation

Stiglitz, Joseph E.

I have been asked to prepare a few remarks reflecting my views on the current state of principles of economics textbooks. It goes without saying that, given the plethora of textbooks available on the market, I have not read in detail all of them, and this is not the occasion to provide a detailed criticism of any single textbook. My remarks will, of necessity, be somewhat impressionistic, but they reflect impressions developed over years of discussing with colleagues at a large number of colleges and universities the problems presented by the modern American principles of economics textbook. I want to put forward two theses, as well as raise several unresolved questions and issues. The first thesis is that the market for principles textbooks provides a good example of one of the central paradigms of modern economics, that of monopolistic competition, and it reflects both the strengths and weaknesses that economic theory would have led us to expect to arise in such a market.