The buzzword in international financial circles these days is "transparency." Much uncertainty in Asia and emerging markets stems from the opacity of financial reporting there. Inscrutable balance sheets do not inspire confidence. Nobody wants to buy a pig in a poke (unless, apparently, you are buying into a hedge fund). Providing transparency is a way of reducing transaction costs. All kinds of sellers have an interest in making features of their products quite visible. Grocers package meat and fish in clear wrappers, display the business end of cold cuts in the deli section, and allow customers to pick and choose among fruits and vegetables.

I observed the problem of opacity recently at an annual harvest fair. Long lines at the various food vendors attested to the strong consumer demand that Sunday afternoon. But one vendor, a seller of deep-fried onion rings, had no lines and no customers. I wondered why. Here's what I concluded. The onion rings were being prepared in a windowless trailer. The onions, the cook, and the cooking were all out of view. Only a side door was visible to the public and, through it, business was conducted. I bought some onion rings (purely in the interest of research) to see if perhaps an inferior product explained the lack of customers. The price and quality seemed fine and were certainly competitive with the other greasy offerings of the day. Apparently, the lack of business stemmed from the vendor's lack of transparency. All other vendors had open operations, with the food in full view before, during, and after preparation. Transparency is more important in occasional markets such as fairs, where customers rely less on experience and reputation and more on "what you see is what you get."

The lesson of transparency should carry over to the courses we teach. We should be unambiguous in our course objectives. We do this with clear syllabi, straightforward assignments, and candor about the level of mastery we expect on the exams. Our courses should not be like some gigantic scavenger hunt, where students are supposed to read our minds to determine what they should be studying. I tell my students I want them to be able to see right through me. I'd like to believe that my courses are an open book. I want my students to operate with rational expectations about the course.

I am no Luddite, but I have been reluctant to get away from my natural speaking voice to use a microphone in large classes. I have taught classes of up to 350 for more than two decades without amplification. I didn't want to put up an artificial barrier between students and me. I liked the freedom to roam the classroom, untethered by a microphone cord (my lecture halls are not equipped with wireless mikes). No question, projecting my voice during the entire period was a challenge, but I felt the payoff was worth it.

But I had no choice. In redesigning large lecture halls for high-tech use, engineers added acoustical baffling, which made it harder to be heard. I gamely increased efforts to project my voice last spring. But, for the first time that I recall, a few students mentioned they were having trouble hearing me.

So I decided to step up to the mike. After using a microphone for several weeks this semester, I think, on balance, it's terrific! I hadn't realized how tiring it was to project my voice the entire period. I can now use my normal voice with its full range. I can naturally vary my pitch and volume for emphasis in ways not possible when I needed to make such an effort to be heard.

In what at first seems to be an oxymoron, the word microphone is from the Greek µ, meaning small, and , meaning sound. The idea is that a microphone is an instrument through which small sounds can be amplified. The microphone is especially effective when I am facing away from the class, as when writing something on the board or looking up or down at an overhead transparency.

Finally, this may seem odd, but the microphone makes me feel and act more like a performer, which is what teachers are after all. Teaching is live theater. I can say things under my breath in a stage whisper and students can still hear me. I now realize that my natural, unamplified speaking voice is not so natural if I have to strain to be heard. For students, I think the presentation in more personal, engaging, less mono-tone-ous, and they don't have to squint with their ears.

Speaking of performers, students are always interested in the nexus between show business and money. Adam Smith argued in The Wealth of Nations that actors had to be necessarily well paid to compensate them for the "discredit" they brought on themselves by performing in public. He likened acting to "a sort of public prostitution." How times have changed. Few today would claim that celebrities are paid so much because they humiliate themselves in the process (Jerry Springer aside). Must Harrison Ford be paid $20 million or Julia Roberts $12.5 million per movie because of the huge discredit each reaps in the process? I think not.

But there is, I believe, a modern day equivalent of what Smith was talking about. Stars are reluctant to do TV commercials because of the public humiliation of hawking products. Evidence that stars are worried about their image is brought home by the fact that the top ones will do commercials only for overseas markets and the more foreign the better. Especially fertile ground is Japan. Leonardo DiCaprio earned $4 million selling cars and jeans in Japan. Harrison Ford was paid $4 million for Japanese beer commercials. Schwarzenegger will make up to $6 million for two day's work in Los Angeles for commercials selling DirecTV in Japan. And that ham Sylvester Stallone picked up $2 million selling ham there.

As I see it, the ranking of activities from least to most humiliating goes something like the following. Least humiliating is doing no commercials or endorsements of any kind, and some top stars follow this course. Next down is doing foreign ads only. Perhaps on a parallel at that second tier are those stars who do voice-overs for commercials, un-credited, without face time. More humiliating are regular commercials with appearances by the star. But even here there is a hierarchy among products. Other things equal, stars would have to be paid more to advertise Depends or Preparation H than Mercedes or Rolex. Finally, at the bottom of the humiliation barrel is hosting the home shopping network or doing an infomercial-buns of steel, quick weight-loss, or the psychic friend network. By the time celebrities are recruited for this stuff, they might as well follow Dante's directions in The Divine Comedy: "This way to join the lost people...Abandon all hope, you who enter."

Incidentally, little of this humiliation seems to carry over to professional athletes, who appear willing to sell anything, anytime. This might be an interesting class discussion-why actors seem so much more protective of their image that athletes. My guess is that an athlete's performance is measured more objectively, so they need not be as concerned about their public persona. Acting success, on the other hand, depends more on the priors of movie-goer.

Last week one of my teaching assistants told me that she patiently presented material on the use of graphs in her discussion section, asking for questions along the way. None were asked until the closing minutes of the period, when a student belatedly announced "I haven't understood a thing you've been saying." Some other students chimed in. The TA was flabbergasted, puzzled, and at a loss for what to do with the clock running down.

A key to successful teaching is getting feedback---the sooner the better. Her problem was not sounding out the class earlier. We can't rely on students to ask questions-they usually don't. And the more confused they are, the less likely they are to ask questions. Like the rest of us, students don't want to sound dumb by fumbling through a vague question. So I try to ask questions early and often, before students get lost. I start with easy questions and move up in complication. As mentioned in an earlier newsletter, I begin each class with a rolling review that asks students about material from the last class or two.

Students are getting used to slicker classroom presentations. Professionally drawn overhead transparencies like those provided by textbook publishers look a lot neater that what you could draw on the board. But they usually offer a picture of a complete graph. Because students are busy copying that graph, they pay less attention to your discussion of it.

The blackboard is an especially good medium for presenting graphs in a step-by-step manner. Students can follow your moves and duplicate the graph in their notes. You can stop along the way and provide the rationale and intuition of each additional element. Also, as an instructor, you must think about what you are doing each step of the way. The use of pre-drawn overhead transparencies requires no such thought. In a sense, with pre-drawn material, graphs can move from the overhead transparency to the student's notes without passing through the mind of either instructor or student.

At a more sophisticated level, instructors use PC-based on-screen graphing and provide students with printouts of exhibits to follow along. The problem with this is that students usually don't have to draw anything themselves. To me, there is a big difference between looking at a finished graph and drawing that graph-the difference between riding as a passenger and being at the wheel.

* According to the most recent Statistical Abstracts of the United States, the number of economists employed in the U.S. civilian labor force increased from 98,000 in 1983 to 148,000 in 1996, a jump of 51% (1997, Table 645). As a point of reference, total civilian employment during the period increased 25.7%, so the growth in economists doubled the growth rate in overall employment. In 1983, 37.4% of economists were female, 6.3% were black, and 2.7% were Hispanic. In 1996, 54.4% were female, 3.9% were black, and 5.4% were Hispanic. There was a stunning increase among females.

* Forbes (9/21/98) just released estimates of highest paid celebrities for 1998. The top ten are 1. Jerry Seinfeld ($225M); 2. Larry David, co-developer of Seinfeld, ($200M); 3. Steven Spielberg ($175M); 4. Oprah Winfrey ($125M); 5. James Cameron, director of Titanic ($115M); 6. Tim Allen ($77M); 7. Michael Crichton ($65); 8. Harrison Ford ($58); 9. Rolling Stones ($57M); and 10. rapper Master P ($56M). Four of the top ten made their money primarily in television, three in movies, and two in music. Best selling author Crichton also writes for movies (Jurrasic Park) and television (E.R.). Technology has leveraged the value of good ideas, as most of those on the top could attest. Forbes speculates that Crichton "could probably sell the concepts in his head for a few hundred million." There's a tricky intellectual-property-rights issue-selling the stock of ideas in your head. That might make for an interesting class discussion.

Patrick B. O'Neill of the University of North Dakota studied the impact of test types on student attitudes and achievement in a principles of macroeconomics course. One large section was given essay exams during the semester and another large section was given multiple-choice exams. At the beginning and end of the course, students took the TUCE III exam in macroeconomics and the Attitude Toward Economics survey. Based on a sample of 145 students, Professor O'Neill found that the type of test administered during the term did not affect student attitudes toward economics but did influence TUCE results. Students given multiple-choice exams during the semester did significantly better at the end when achievement was measured by the TUCE. When achievement was measured by the course grade, there were no differences based on the type of test. His findings raise questions about the usefulness of TUCE results as a measure of achievement across colleges and across courses where different types of exams are administered. His paper, "Does Test Type Matter? An Experiment in the Principles of Macroeconomics Course," was presented last July at the Western Economic Association Annual Conference.