A Simple Classroom Experiment on Money Demand

Chen, Xiaofen

doi:10.14434/josotl.v18i1.22097

Cited by 4 publications

(3 citation statements)

References 16 publications

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“…Hyun and Byun (2014) find that introducing the prisoner's dilemma game into an introductory economics class yields positive student learning benefits as measured by subsequent performance on the exams and in the class as a whole. Chen (2018) finds that introducing a classroom experiment about money demand into a macroeconomics course has a positive effect on student learning outcomes. Emerson and Taylor (2004) demonstrate that students perform significantly higher on the Test of Understanding in College Economics (TUCE) after the introduction of classroom experiments.…”

Section: Literature Reviewmentioning

confidence: 99%

The Invisible Hand in Action -- An Interactive Classroom Experience

Settlage

Wollscheid

2019

jeconteach

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The economic concepts of market formation, industrial organization, and the behavioral implications of market structure are difficult for students to conceptualize. In this paper, we establish an interactive entrepreneurship game that can be played in a single class period. This game introduces the concepts of entrepreneurship, markets and equilibrium price formation, and firm profit. In a single class period, students form markets and observe "the invisible hand, " form collusive cartels, and see competitive profit driven to zero. In addition, the game can be easily extended to bring new economic topics into the existing framework over the entire course.

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Section: Literature Reviewmentioning

confidence: 99%

The Invisible Hand in Action -- An Interactive Classroom Experience

Settlage

Wollscheid

2019

jeconteach

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“…The model can be tested in a laboratory experiment (Borgonovo et al ). To the best of our knowledge, the money‐demand features have previously been analysed in laboratory experiments in only two cases and exclusively for pedagogical reasons (Ewing et al ; Chen ).…”

Section: Would We Like Central Bank Digital Currencies and Cryptocurrmentioning

confidence: 99%

Central Bank Digital Cash and Cryptocurrencies: Insights from a New Baumol–Friedman Demand for Money

Masciandaro

2018

Australian Economic Review

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This article analyses ongoing changes in the supply of alternative media of payments (MOPs). The comparison between old (cash and deposits) and new (cryptocurrencies and central bank digital currencies) MOPs is based on a novel definition of money where a MOP has three properties: the first two are the standard functions of medium of exchange (liquidity costs) and store of value (opportunity costs) and the third is the novel function of store of information (privacy costs). Given such properties and that the evolution of the different MOPs likely depends on individual preferences, the relevance of experimental economics is highlighted.

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“…Goldstein's approach to the history and purpose of money parallels the presentation found in many textbooks by explaining how each new iteration addresses new problems. The stories told in Money could complement other active learning strategy educators have used to demonstrate the limitations of barter systems (Karpoff, 1984), the characteristics of money (Geerling & Mateer, 2021), money demand (Chen, 2018), and the relationship between saving and investment (Chappell, 2016).…”

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confidence: 99%

Book Review: Money: The True Story of a Made-Up Thing, by Goldstein, J.

Wooten

2021

The American Economist

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as well as the impact of shifts of supply and demand. One such example comes from the chapter on dyeing. When it was discovered that cochineal larvae could be used for dyeing, many farmers shifted to cochineal breeding instead of subsistence farming. Rather than grow their own food, they bought it from others. This, of course, drove up prices of food, as well as animosity toward the cochineal producers. The chapter "Traders" offers a case study in monetary economics. It recounts the ways in which the fabric trade supported alternative currencies-currencies sometimes more stable than other commodity monies. The chapter describes the origin of bills of exchange, which often operated as a de facto fiat currency. But rather than being given their credibility by a state, the willingness of individuals to accept bills of exchange arose from the reputations of the banks or merchants issuing them. Postrel identifies that this is why so many historical textile merchants ended up as bankers.As illuminating as Fabric of Civilization is, it is not without its flaws. For starters, given the abundance of books that explain why this or that thing is central to understanding modern civilization, one could reasonably wonder how this book is different. Though Postrel thoroughly explains the ways in which textiles have contributed to society, she makes no attempt to differentiate advances in textile production from the spice trade, advances in metallurgy, or other technological advancements that were pivotal in their own right. Next, by focusing on the various components of the textile industry-thread, cloth, dye, consumers, and so forth-Postrel sacrifices chronology. Occasionally the historical story gets lost in the thematic presentation. Next, Postrel often refers to sumptuary regulations and how they restrict domestic consumption of textiles. Oddly, she never reconciles the fact that often it is the textile manufacturers who hold positions of power who enact the laws that directly hurt their economic interests. Finally, though Postrel addresses slavery in entirely negative language-"wrenching," "theft," "kidnapping," "brutal"some may find her condemnation underwhelming given slavery's role in the textile trade. Still, none of these shortcomings changes the fact that the book is a rewarding and engaging read that both informs and exhorts its reader to think differently than she might have before picking it up.Early in Fabric of Civilization Postrel paraphrases Arthur C. Clarke's famous adage about magic to instead read, "Any sufficiently familiar technology is indistinguishable from nature" (p.3). This familiarity means we often don't appreciate the important role textiles play in our lives. Nor do we dwell on how changes in the textile industry have transformed society. Upon finishing the book, it is difficult to disagree with the sentiment of textile historian Elizabeth Wayland Barber, "So powerful in fact is simple string in taming the world to human will and ingenuity that I suspect it to be the unseen weapon that allowed th...

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A Simple Classroom Experiment on Money Demand

Cited by 4 publications

References 16 publications

The Invisible Hand in Action -- An Interactive Classroom Experience

The Invisible Hand in Action -- An Interactive Classroom Experience

Central Bank Digital Cash and Cryptocurrencies: Insights from a New Baumol–Friedman Demand for Money

Book Review: Money: The True Story of a Made-Up Thing, by Goldstein, J.

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