Joseph M. Santos

Developing and Implementing an Internet-Based Financial System Simulation Game

Abstract Thanks to the Internet and server-side technology such as Active Server Pages (ASP), faculty can develop, implement, and share interactive pedagogy easily and inexpensively. The Financial System Simulator (FSS) is an example of an interactive game that the author has developed. The FSS is an Internet-based, interactive teaching aid that introduces undergraduate students to the domestic and international consequences of monetary policy. Although simulators are common among computer-aided interactive learning devices in todays undergraduate economics curricula, the FSS is different from the others because it allows students, who represent nations, to interact with each other rather than with a computer. The exercise provides users with real-time outcomes based on their decisions, as well as the decisions of other students. According to student surveys, the game helped students understand monetary policy and kept students motivated and interested.

Do as I Do, Not as I Say: Assessing Outcomes When Students Think Like Economists

The authors measured the pedagogical value of sharing with students what economists do and how they do it. Ostensibly, thinking and researching like economists will transform students into better and more engaged learners as well as provide instructors with effective assessment tools. One way to bring students closer to what economists do is to implement an empirical economics research curriculum that teaches students how to access, chart, and interpret macroeconomic data; search and access peer-reviewed journal articles; and formulate, in writing, positions on economic issues. The authors assess student results with respect to an empirical research curriculum that they designed and introduced in a money and banking course at South Dakota State University.

Trading grain now and then: the relative performance of early grain-futures markets

Popular hostilities toward futures trading in the United States date to the nineteenth century, when many Americans perceived then-nascent grain exchanges as little more than gaming parlours that existed to serve the illegitimate aspirations of gamblers–a depiction that, if anything, compromises the legitimacy of modern futures exchanges. Yet, agricultural historians have largely praised the performance of these early markets, which they contend were shaped by commercial interests who sought successfully to mitigate price risk. In any case, our understanding of how early futures markets performed is fragmented, and so such claims remain largely unsubstantiated in a quantifiable sense. Even so, futures-price data are available for the late-nineteenth century, thanks to the Chicago Board of Trade (CBT), which pioneered grain-futures trading in the 1860s. In this article, I test and compare the performance of wheat, corn, and oats futures prices on the CBT from 1880 to 1890 and from 1997 to 2007. My results indicate that grain-futures markets in both periods are efficient in the long run. Short-run performance is mixed, and inefficiency is more evident in the nineteenth century. On balance, my results support the notion that early grain-futures exchanges benefited commercial interests and the grain trade more generally.

Going Against the Grain: Why Do Canada and the United States Market Wheat So Differently?

At the turn of the twentieth century, private grain exchanges settled the daily prices for North American wheat. By the end of the Second World War, the Canadian and US governments had intervened significantly in these markets. The Canadian government required farmers in its western provinces to deliver their product to the Canadian Wheat Board (CWB), a single-selling-desk agency that, by then, had supplanted private wheat marketing in western Canada. Meanwhile, the United States government subsidized farm incomes with domestic-use taxes and import tariffs, but otherwise preserved private wheat marketing. In this article, I demonstrate that these disparate agricultural policies were broadly defined by immutable economic realities imposed on each country by global wheat-trade patterns and triggered by unprecedentedly severe agricultural crises. That is, amidst the precipitous fall in wheat prices in the early 1930s, each government crafted farm-support policies that reflected its domestic-consumption share of wheat production and the importance of wheat to its overall economy.

Back to the futures: An assessment of market performance on the early Winnipeg Grain Exchange

In this paper, I offer a quantitatively rich, historical perspective with which to consider Western Canadas recent return to private grain marketing. I assess how futures markets on the Winnipeg Grain Exchange (WGE) performed before the Canadian Wheat Board, and I consider the extent to which this performance contributed to the Canadian governments decision to create the Board. I conclude, despite significant agrarian dissatisfaction with private grain marketing on the WGE, the Canadian government ultimately proscribed futures trading because it was incompatible with the CWB model, which the Canadian government needed in order to stabilize farm incomes, particularly in the aftermath of the Great Depression.

What's so Special about Inflation Targeting? A Comparative Analysis of Recent Canadian and US Monetary Policy Frameworks

In the early 1990s, Canada was one of several countries to adopt an inflation-targeting framework for monetary policy. A noted exception to this group was the United States, where the framework for monetary policy was, as it had been for some time, informed by a dual mandate to maintain both high employment and low and stable inflation. By the late 1990s, the United States seemed to settle, in effect, on an implicit inflation-targeting framework for monetary policy. Nevertheless, whether the preferences of each central bank actually shifted toward minimizing inflation variability, and whether the magnitudes, opportunity costs, and timing of any such shifts were the same for both economies are questions that remain largely unexplored. In this article, I estimate these preferences from 1970 to 2009. Taken together, my results indicate that the Bank of Canada was more inflation averse overall; and both central banks grew more inflation averse over time.