A Simple Classroom Experiment on Money Demand

Article Sidebar

cover image
PDF Summary of revision
Published: Feb 12, 2018
DOI: https://doi.org/10.14434/josotl.v18i1.22097
Keywords:
money demand, classroom experiment, economic education

Main Article Content

Xiaofen Chen
http://orcid.org/0000-0001-7220-1993

Abstract

This simple classroom experiment is designed to help students to better understand the concept and the theory of money demand. By simulating what households face in real life, the experiment allows students to reflect on the cost and benefit of holding money and understand how money demand is affected by various factors. The experiment is suitable for an undergraduate macroeconomics course at the introductory or intermediate level. The paper also presents evidence of student learning resulting from the experiment, controlling for student characteristics.

Downloads

Download data is not yet available.

Article Details

How to Cite
Chen, X. (2018). A Simple Classroom Experiment on Money Demand. Journal of the Scholarship of Teaching and Learning, 18(1), 115–135. https://doi.org/10.14434/josotl.v18i1.22097
Issue
Vol. 18 No. 1 (2018): Journal of the Scholarship of Teaching and Learning
Section
Case Studies
  1. Authors retain copyright and grant the Journal of the Scholarship of Teaching and Learning (JoSoTL) right of first publication with the work simultaneously licensed under a Creative Commons Attribution License, (CC-BY) 4.0 International, allowing others to share the work with proper acknowledgement and citation of the work's authorship and initial publication in the Journal of the Scholarship of Teaching and Learning.
     
  2. Authors are able to enter separate, additional contractual agreements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in the Journal of the Scholarship of Teaching and Learning.

  3. In pursuit of manuscripts of the highest quality, multiple opportunities for mentoring, and greater reach and citation of JoSoTL publications, JoSoTL encourages authors to share their drafts to seek feedback from relevant communities unless the manuscript is already under review or in the publication queue after being accepted. In other words, to be eligible for publication in JoSoTL, manuscripts should not be shared publicly (e.g., online), while under review (after being initially submitted, or after being revised and resubmitted for reconsideration), or upon notice of acceptance and before publication. Once published, authors are strongly encouraged to share the published version widely, with an acknowledgement of its initial publication in the Journal of the Scholarship of Teaching and Learning.

References

Akhtar, M. A., & Putnam, B. H. (1980). Money demand and foreign exchange risk: The German case, 1972-1976. Journal of Finance, 35(3), 787–794.

Arize, A. C., Malindretos, J., & Shwiff, S. S. (1999). Structural breaks, cointegration, and speed of adjustment: Evidence from 12 LDCs money demand. International Review of Economics and Finance, 8(4), 399–420.

Baumol, W. J. (1952). The transaction demand for cash: an inventory theoretic approach. Quarterly Journal of Economics, 66(4), 545–56.

Baumol, W. J., & Tobin, J. (1989). The optimal cash balance proposition: Maurice Allais' priority. Journal of Economic Literature, 27(3), 1160–62.

Beckman, S. (1987). A microcomputer program that simulates the Baumol-Tobin transactions demand for money. Journal of Economic Education, 18(3), 309–17.

Cartwright, E., & Stepanova, A. (2012). What do students learn from a classroom experiment: Not much, unless they write a report on it. Journal of Economic Education, 43(1), 48–57.

Dickie, M. (2006). Do classroom experiments increase learning in introductory microeconomics? Journal of Economic Education, 37(3), 267–288.

Durham, Y., McKinnon, T., & Schulman, C. (2007). Classroom experiments: Not just fun and games. Economic Inquiry, 45(1), 162–178.

Eisenkopf, G., & Sulser, P. (2013). A randomized controlled trial of teaching methods: Do classroom experiments improve economic education in high schools? Thurgau Institute of Economics Research Paper Series, 80.

Emerson, T. L. N. (2014). Anyone? Anyone? A guide to submissions on classroom experiments. Journal of Economic Education, 45(2), 174–179.

Emerson, T. L. N., & Taylor, B. A. (2004). Comparing student achievement across experimental and lecture-oriented sections of a principles of microeconomics course. Southern Economic Journal, 70(3), 672–693.

Ewing, B. T., Kruse, J. B., & Thompson, M. A. (2004). Money demand and risk: A classroom experiment. Journal of Economic Education, 35(3), 243–250.

Frank, B. (1997). The impact of classroom experiments on the learning of economics: An empirical investigation. Economic Inquiry, 35(4), 763–769.

Gremmen, H., & Potters, J. (1997). Assessing the efficacy of gaming in economic education. Journal of Economic Education, 28(4), 291–303.

Hazlett, D. (2006). Using classroom experiments to teach economics. In W. E. Becker, M. Watts, & S. R. Becker (Eds.) Teaching Economics: More Alternatives to Chalk and Talk (pp. 21–38). Northampton, MA: Edward Elgar.

Hodgson, A. (2014). Adverse selection in health insurance markets: A classroom experiment. Journal Economic Education, 45(2), 90–100.

Holt, C. A. and McDaniel, T. (1998). Experimental economics in the classroom. In W. B. Walstad & P. Saunders (Eds.) Teaching Undergraduate Economics: A handbook for Instructors (pp. 257–268). Boston, London, and Toronto: Irwin/McGraw-Hill.

Mankiw, G. N. (2010). Macroeconomics. 7th edition. New York, NY: Worth.

Mitchell, D. M. (2008). An examination of the impact that classroom based experiments have on learning economic concepts. Journal of Economics (MVEA), 34(1), 21–34.

Parker, J. (1995). Using laboratory experiments to teach introductory economics. Retrieved from http://academic.reed.edu/economics/parker/ExpBook95.pdf.

Rossana, R. J. (2011). Macroeconomics. New York, NY: Routledge.

Tobin, J. (1956). The interest elasticity of demand for cash. Review of Economics and Statistics, 38(3), 241-47.

Yandell, D. (2004). Effects of integration and classroom experiments on student learning and satisfaction. Journal of Economics and Economic Education Research, 5(3), 17–27.

Zilberfarb, B.-Z. (1988). The effects of foreign exchange risk and return on the demand for domestic balances. European Economic Review, 32(6), 1359–68.