This paper studies the effects of monetary policy on asset trading and production in a laboratory economy. Participants play the role of household investors who make consumption, labor, and investment decisions. Introducing asset markets to the economy does not generate significant real effects....

Purpose – The purpose of this paper is to explore the ability of monetary policy to generate real effects in laboratory general equilibrium production economies. Design/methodology/approach – To understand why monetary policy is not consistently effective at stabilizing economic activity,...