The Feedback Method. A System Dynamics Approach to Teaching Macroeconomics
MetadataShow full item record
This thesis documents a method for improving undergraduate instruction in macroeconomics. Called the feedback method, it enables students to learn about dynamic behavior in a market economy by using feedback loop diagrams and interactive computer simulation models instead of static graphs or differential equations. There are at least two types of pedagogical problems associated with graphical representation of the economy. First, students seem to have difficulty interpreting static graphs used to illustrate dynamics, which raises questions about the value added by graphs to student understanding. Secondly, the most prominent graph in modern macroeconomics principles textbooks—the aggregate supply and demand (AS/AD) model—appears to misrepresent disequilibrium conditions in the economy and cause students who understand the graph to misunderstand important behavior in the economy. The feedback method emphasizes dynamics rather than static equilibrium conditions. How the economy changes over time in different contexts is the behavioral question that students repeatedly encounter. The structure of the economy is explained in terms of reinforcing and counteracting feedback loops. Student understanding of the source of dynamic economic behavior requires seeking, identifying, and explaining relevant feedback structure in an economic system. Interactive computer simulation activities reinforce the insights gained from studying feedback loops. Even small-scale student participation in model-building seems to facilitate understanding of a larger model; moreover, such participation may build respect for the scientific method and an appreciation for theory building by economists. The feedback method is a structural explanation of economic behavior, but it also provides an improved learning structure for students, and the thesis reports on four experiments designed to test that claim. Two experiments examined student preferences for methods of learning macroeconomics; for example, using static graphs or a feedback loop diagram. The experimental designs were quite different, but the results were the same—a significant majority preferred the feedback method. The most commonly cited reason: feedback loops enable the students to visualize a process in the economy. The third and fourth experiments addressed the performance question. In the third experiment, students showed more understanding of GDP when they had access to a stock-and-flow feedback diagram of the economy. In the final experiment, students using feedback loop diagrams displayed more understanding of business cycle dynamics than other students who had access to an AS/AD graph. Teaching students to search for feedback structure in the economy and using computer simulation to connect structure with behavior appears to be a promising method for teaching macroeconomics.
Paper I: Wheat Jr., I. David, 2007, Feedback Loops in the Macro Instructor’s Toolkit. Preprint version. (Paper presented at the research session of the National Economics Education Association at the Allied Social Sciences Association Conference. Chicago, January 2007.)Paper II: Wheat Jr., I. David, 2007, Student Preferences when Explaining Dynamics. Preprint version.Paper III: Wheat Jr., I. David, 2007, Student Preferences when Learning Dynamics. Preprint version.Paper IV: Wheat Jr., I. David, Do Stock and Flow Feedback Diagrams Promote Learning in Macroeconomics? Preprint version.Paper V: Wheat Jr., I. David, 2007, Teaching Business Cycle Dynamics: A Comparison of Graphs and Loops. Preprint version.