A Laboratory Science Approach to Teaching in the Agricultural Economics Curriculum

We argue that economic laboratory experiments can facilitate active learning of theory in the agricultural economics curriculum by placing students in decision-making roles. Three types of experimental protocols are described, along with a discussion of the costs and benefits of experiments. The Double Auction Experiment provides a platform for demonstrating concepts of equilibrium, price discovery, externalities, excess supply, surplus, and speculation. The Monopoly Experiment is a platform for demonstrating concepts of advance production, inventory carryover, monopoly pricing, and search strategies. The Oligopoly Experiment is a platform for demonstrating concepts of thin markets, coordination, and imperfectly competitive equilibria.     

Euro area inflation: aggregation bias and convergence

Monetary policy of the European Monetary Union targets aggregate euro area inflation. Concerns are growing that a focus on aggregate inflation may cause national inflation rates to diverge. While different explanations for diverging aggregate euro area inflation have been brought forward, the very impact of aggregation on divergence has, however, not been studied. We find a striking difference in convergence depending on the level of aggregation. While aggregate national inflation rates are diverging, disaggregate inflation rates are converging. We find that aggregation appears to bias evidence towards non-convergence. Our results are consistent with prominent theoretical and empirical evidence on aggregation bias.