General Equilibrium, Markets, Macroeconomics and Money in a Laboratory Experimental Environment

Abstract

This paper reports on the use of laboratory experimental techniques to create relatively complete economic systems. The creation of these market systems reflects a first attempt to explore the nature of inherently interdependent environments, to assess the ability of simultaneous equations equilibrium models like the classical static general competitive equilibrium model, and to predict aspects of system behaviors. In addition, the impact of the quantity of a fiat money was studied. The economies were successfully created. Classical models capture much of what was observed.