Why macroeconomics needs experimental evidence

Abstract

This paper discusses how macroeconomics can and already has begun to make use of controlled experimental methods to address the assumptions and predictions of macroeconomic models as well as to evaluate the impacts of macroeconomic policy interventions. Specific issues addressed include rational expectations and alternatives, intertemporal optimization with an application to household consumption and savings decisions and the efficacy of various monetary policies.

The Friedman Rule: Experimental Evidence

“…This article contributes to a literature that uses experiments to study monetary economics and policy (see Duffy, 2016, 2021, for surveys). Most relevant to this article are experiments that have considered the impact of monetary policies on expectations of inflation and/or the output gap or for the stability of prices.…”