43 Pages Posted: 28 Apr 2003
The paper presents a simulation game that sheds light on why banks exist, and why a central bank exists.
The role of banks as information specialists (Diamond's "Delegated Monitor" and Fama's specialist in "inside" information) is highlighted, as is the potential conflict inherent in banks in their roles as guardians of the money supply, and as profit making firms.
Three cases are presented; one in which no banks exist, one in which banks exist, and the third in which a central bank exists.
JEL Classification: A2, E4, E5, G2, N2
Suggested Citation: Suggested Citation
Woodburne, Paul, A Money and Banking Simulation Game for High School Upperclassmen and College Level Non-Majors. Available at SSRN: https://ssrn.com/abstract=390765