Back Lictem 2012
For over 30 years, macroeconomic models have had explicit microfoundations with regard to the behavior of firms, consumers and government agencies. This modelling approach has lead to closer ties between micro/game theorists and macro theorists. On the applied side, the assumptions and predictions of macroeconomic models have historically been tested using non-experimental field data as collected by government agencies. Given an explicit micro-founded macroeconomic model, an alternative empirical approach that is attracting increased attention is to collect the data relevant to evaluating these models using controlled laboratory settings with paid human subjects. The idea of "macroeconomic experiments" might be met with skepticism. Nevertheless, micro-founded macro models can be readily tested in the laboratory with human subjects incentivized to play according to certain roles. The experimental findings can be informative with respect to questions of equilibrium selection or the efficacy of various government policies. There are many additional advantages to conducting experiments: for instance, the data most relevant to testing a model's predictions or assumptions can be collected while noisy, confounding factors can be minimized.
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