An Aggregate Demand Driven Macroeconomic Equilibrium Experiment

Charles Scott Benson, Jr. and Tesa Stegner

Macroeconomics and Monetary Economics

Non-computerized experiment

This paper describes a macroeconomic experiment that can be used in the classroom to simulate the impact of consumer spending decisions on a two sector economy. In this simplified specification, low levels of spending result in an unemployment problem whereas high levels of spending cause inflation. Several incentive systems are included to influence the students' behavior. The discussion of the experiment is followed by a summary of the results and some suggested modifications.