The feedback method of teaching macroeconomics: is it effective?

The conventional method of teaching macroeconomics to undergraduates relies on static graphs, an approach with documented pedagogical problems. In contrast, the feedback method uses causal loop diagrams and interactive computer simulation models. This paper describes the feedback method and four experiments that tested its effectiveness. Two experiments examined student preferences for methods of learning macroeconomics (e.g., using static graphs or a causal loop diagram), and a significant majority preferred the feedback method. 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 causal loop diagrams displayed more understanding of business cycle dynamics than those with access to a conventional aggregate supply-and-demand graph. Searching for feedback structure in the economy and using computer simulation to connect structure with behavior appears to be a promising method for learning macroeconomics.