A study of how well people understand the goals of monetary policy and how it works

Last registered on April 03, 2025

View Trial History

Pre-Trial

Trial Information

General Information

Title

A study of how well people understand the goals of monetary policy and how it works

RCT ID

AEARCTR-0015677

Initial registration date

March 31, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

April 03, 2025, 1:08 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

United States of America

Region

Primary Investigator

Name

Jeffrey Livingston

Affiliation

Bentley University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Ezgi Kurt

PI Affiliation

Bentley University

Contact Investigator

PI Name

Gonzalo Basante-Pereira

PI Affiliation

University of New Hampshire

Contact Investigator

Additional Trial Information

Status

In development

Start date

2025-03-31

End date

2025-06-30

Keywords

Lab, Other

Additional Keywords

monetary policy, fiscal policy

JEL code(s)

E52, E62, E70

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

This study considers the following questions:
Do people have a weaker understanding of the goals of monetary policy and how it works than they do of the goals of fiscal policy and how it works?

Does understanding of the goals of monetary policy and how it works after viewing a video produced by the Federal Reserve Bank of St. Louis?

Does viewing this video help close the gap between people’s understanding of monetary policy and their understanding of fiscal policy?

To answer these questions, we conduct a lab experiment where subjects first take a 16-question baseline test, with 8 questions on monetary policy and 8 questions on fiscal policy. The subjects are then randomized into a treatment group and control group. The treatment group then watches a 10-minute video that was produced by the Federal Reserve Bank of St. Louis that explains the goals of monetary policy and how it works. The control group then watches a 9-minute placebo video about international trade, also produced by the Federal Reserve Bank of St. Louis.

After viewing the video, the subjects take another 16-question evaluation test made up of 8 questions on monetary policy and 8 questions on fiscal policy.

External Link(s)

Registration Citation

Citation

Basante-Pereira, Gonzalo, Ezgi Kurt and Jeffrey Livingston. 2025. "A study of how well people understand the goals of monetary policy and how it works." AEA RCT Registry. April 03. https://doi.org/10.1257/rct.15677-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Subjects take a 16-question baseline test on monetary policy (8 questions) and fiscal policy (8 questions). They are then randomized into a treatment group and a control group, balancing the randomization on these baseline scores.

Treatment group: watches a 10-minute video about the goals of monetary policy and how it works
Control group: watches a 9-minute placebo video about international trade.

They then take a second 16-question test.

All subjects are paid $0.50 for each correct answer to encourage them to exert full effort on the test.

Please see attached pre-analysis plan for more details.

Intervention (Hidden)

Intervention Start Date

2025-03-31

Intervention End Date

2025-06-30

Primary Outcomes

Primary Outcomes (end points)

1. gap in scores on monetary policy and fiscal policy sections at baseline.
2. the change in this gap post-treatment, by treatment condition.

Please see attached pre-analysis plan for more details.

Primary Outcomes (explanation)

All outcomes are constructed from scores on the two tests. Please see attached pre-analysis plan for more details.

Secondary Outcomes

Secondary Outcomes (end points)

none

Secondary Outcomes (explanation)

none

Experimental Design

Experimental Design Details

Randomization Method

The experiment is run in classes at Bentley University. Each class is randomized separately, so the randomization is stratified by class.

After the subjects complete the baseline test, to assure balance of baseline test scores, we rerandomize until tests of the differences across treatment and control of the mean monetary policy section score and fiscal policy section score both have p-values of over 0.5.

Randomization Unit

individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

200

Sample size: planned number of observations

200

Sample size (or number of clusters) by treatment arms

100 per treatment condition

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

The MDE of the gap in MP and FP scores at baseline with 80% power is between 0.6 and 0.65 correct answers. The MDE of the change in the gap in MP and FP scores by treatment condition, as measured by with 80% power is between 0.85 and 0.9 correct answers.

Supporting Documents and Materials

IRB