Tim Rogmans introduces his macroeconomics simulation game and provides some advice on how to weave it into your pedagogy. An independent review follows this article.
Econland is a simulation game and learning platform designed to support student learning of Macroeconomics at A-Level, International Baccalaureate, AP and at introductory university level courses. In the game, students make monetary and fiscal policy decisions for a fictional country (“Econland”) for seven years in order to produce beneficial economic outcomes for the country’s population. This article contains an overview of Econland, its relevance for students taking A-Level Economics and provides a guide for how to use Econland in face-to-face or online classes.
In the simulation game, students manage the economy of a medium-sized, fictional country (“Econland”). Initially, the economic situation of Econland is healthy; GDP growth is strong and unemployment, inflation, the budget deficit and the total government debt are all under control. Each year, for a total of seven years, students get presented with information about fluctuating conditions in the world economy and the level of consumer confidence among the Econland population. Students take this information, as well as data on the country’s recent economic performance into account in order to make four monetary and fiscal policy decisions; the interest rate, corporate tax rate, income tax rate and the level of government spending.
Figure 1: Decisions screen
After students enter their decisions, Econland’s overall economic performance for the year is presented in a Dashboard. The four key results areas are GDP growth, the unemployment rate, inflation and the budget deficit as a percentage of GDP. Each year, for each results area, the player gets 0, 10 or 25 points, depending on their performance. The scores are shown by a sad, neutral or happy smiley face for each result. The sum of the scores of the four results represents the approval rating that the population gives to the government for the management of the economy. The aim of the game is to obtain the highest average approval rating for the seven years of the game. Students receive feedback on their decisions and results from a policy advisor that they can take into account when making decisions for the next year.
Figure 2: Dashboard
In Table 1 and 2 on the Reports screen, students have access to a range of economic indicators, including data on each of the components of GDP, the value of the currency, productivity growth and other data. In Table 3, students also have access to all their decisions in the game and all of their results obtained thus far. This information helps students to interpret their results and can be used as input in decision making for the next year.
Figure 3: Reports (Tables 1 and 2)
Teachers have the ability to tailor the game in several ways. First, the game can be played under three scenarios for the development of the world economy, with each scenario providing a different development of world economic conditions. Teachers are also able to change model parameters if they wish, including the size of the impact on the economy of changes in government expenditure or taxation.
Figure 4: Scenarios for development of the world economy
Alignment with A-Level curriculum
It is important to note that learning with Econland does not represent a new curriculum. Instead, the simulation is designed to make the learning of the existing A-Level and IB curricula more engaging and effective. Although teaching Macroeconomics typically takes a topic by topic approach, the simulation provides a way to integrate different topics in one exercise and to understand the linkages between them.
The A-level curriculum consists of two sections, one that focuses on firms and markets (Microeconomics) and one that deals with the national and international economy (Macroeconomics). Econland covers nearly all topics in the Macroeconomics part of the syllabus. Only a few A-level Macroeconomics topics do not appear in the simulation at all, such as the banking sector, free trade agreements or the difference between economic growth and development. In many cases, the simulation does not cover a topic in its entirety. Where the simulation simplifies a topic, the teacher can use the debrief to discuss the complete picture. For example, the only monetary policy decision that students make in the game is the interest rate. Teachers can discuss in class that there are other monetary policy instruments to control the money supply , such as the bank reserve ratio requirement.
The table on the next page outlines for each topic in the A-level Macroeconomics syllabus how it is covered in Econland and also mentions any important items that are not included in the game.
How to use Econland in class
It is clear from the table above that Econland does not replace the teacher or the textbook. Each concept first needs to be explained to students, before the game can be played in a meaningful way. Where the simulation helps is in the consolidation of student knowledge on all individual topics, as well as the relations and interactions between them. By playing the simulation, students learn how policy decisions impact economic outcomes, what trade-offs need to be made by policymakers and how global economic conditions impact a nation’s economy and hence its monetary and fiscal policy decisions. In this way, students move from memorizing the meaning of concepts to ‘thinking like an economist’.
Table: A-level curriculum and Econland
|Ref.||Topic||Coverage in Econland|
|220.127.116.11.||The objectives of government economic policy||Economic growth, price stability, unemployment, balance of payments on Dashboard and Reports pages.|
|18.104.22.168||Macroeconomic indicators||Real GDP, CPI, unemployment, productivity and balance of payments on Dashboard and Results page.|
|22.214.171.124||Use of index numbers||Consumer Price Index, Exchange Rate Index in Results. Consumer Confidence Index in Economic Forecast.|
|126.96.36.199||Use of national income data||GDP data included in Dashboard and Reports, but not PPP. Limitations of GDP in explainer video.|
|188.8.131.52||The circular flow of income||GDP and real GDP included in Dashboard and Reports, but no circular flow diagram|
|184.108.40.206||Aggregate demand and aggregate supply analysis||AD/AS explained in learning resources text. World economic conditions in Economic Forecast.
|220.127.116.11||Determinants of aggregate demand||All determinants of AD included in Reports.|
|18.104.22.168||Aggregate demand and the level of economic activity||Teachers can set own values for multiplier, for changes in income tax and government expenditure.|
|22.214.171.124||Determinants of short-run aggregate supply||Corporate taxation is a Decision and productivity index is in Reports.|
|126.96.36.199||Determinants of long-run aggregate supply||Corporate taxation is a Decision and productivity index is in Reports. Role of institutions not included.|
|188.8.131.52||Economic growth and the economic cycle||Economic cycles and their causes included in Economic Forecast. Production possibility curve and sustainability aspects not included.|
|184.108.40.206||Employment and unemployment||Cyclical and natural unemployment included in unemployment rate in Dashboard.|
|220.127.116.11||Inflation and deflation||Inflation (and deflation) included in Dashboard.|
|18.104.22.168||Possible conflicts between macroeconomic policy objectives||Trade-offs between inflation, unemployment and other policy objectives included.|
|22.214.171.124||The structure of financial markets and financial assets||Interest rates as a way to control the money supply in Decisions.|
|126.96.36.199||Commercial banks and investment banks||Not included.|
|188.8.131.52||Central banks and monetary policy||Interest rates as a monetary policy tool in Decisions. Monetary policy also covered in accompanying explainer video.|
|184.108.40.206||The regulation of the financial system||Not included.|
|220.127.116.11||Fiscal policy||Government spending, taxation decisions impact budget balance result. Topic is also covered in accompanying explainer video. Income tax and corporate tax in Decisions.|
|18.104.22.168||Supply-side policies||Corporate taxation is in Decisions and productivity growth is a result in the Reports section. Other supply-side policies not included.|
|22.214.171.124||Globalisation||Impact of developments in world economy in Economic Forecast.|
|126.96.36.199||The balance of payments||Balance of payments included in Reports. FDI not included.|
|188.8.131.52||Exchange rate systems||Value of floating exchange rate in Reports.|
|184.108.40.206||Economic growth and development||Not included.|
The additional learning resources, including the glossary of terms, explainer videos, a quiz and a weekly online newspaper, help students to link the game to their course curriculum and to the real world.
Econland can be used in both online and face-to-face classes. In both settings, the teacher usually begins by recapping the main points learned in lessons on aggregate demand and supply, and fiscal and monetary policy, followed by an explanation of the rules of the game. This can be done by showing the student video or by playing the game once in front of students, at least for the first year of decision making. Students then play the simulation, preferably individually, although the teacher can allow students to discuss their decisions and results with each other while they are playing. When students play the game, the teachers should remain in the background as much as possible and only intervene when necessary.
After students have played the game once, they can play again with the same scenario in order to improve their score by applying the lessons they learned, or under another scenario in order to experience how different world economic conditions can impact a country and its economic policies.
Once students have finished playing, the debrief discussion can be used to share results and to consolidate learning. Students can share what they learned from the exercise and discuss linkages between the game and the course, as well as with the real world. At this point, there can be an opportunity to criticize the economic model behind the game. Students can debate whether the game behaves in unexpected ways or if there are important elements missing that may make the game more complete, such as income distribution or environmental quality. This discussion can serve to cover topics that are in the curriculum but not in the simulation. It can also point towards the inherent imperfections of economic modelling, since every model only represents a simplification of reality. Such as discussion relates directly to the following point made in the A-level curriculum guide:
“Students should recognise that there are a number of models demonstrating how the macroeconomy works and should appreciate that different economic models provide insights into different aspects of the behaviour of the macroeconomy. When using these models students should be critically aware of the assumptions upon which they are based and their limitations when they are used to make sense of real world phenomena. Furthermore, they should be prepared to propose, analyse and evaluate possible solutions to macroeconomic problems.”
The full brief-play-debrief cycle of the simulation usually takes around two class periods. At the end of the debrief, students should be made aware of the additional resources that are available. A quiz with an extensive test bank of questions allows students to test their knowledge. A weekly online newsletter (Econland News) is available as a source of economics news items to be used in class discussions. A series of explainer videos can serve to explain or recap key concepts. Students can also play the simulation again outside class to recap their knowledge and continue to practice their economy policy making skills.
Tim Rogmans teaches business and economics at Zayed University, Dubai and developed Econland. An independent review of Econland follows this article.
Note: Econland High School is available on www.econland.com. Econland for universities is available through Harvard Business Publishing.