Using the IEM in Class: An Overview
The IEM is a real time and real money electronic futures market designed specifically as a teaching and research tool. Students use real money accounts to trade contracts with payoffs based upon real-world events such as political outcomes, stock price rates of return, movie box office receipts, and federal reserve policy decisions. The markets run continuously with new sets of contracts opening at least once a month.
Participating in the IEM provides students with real incentives to learn about markets and follow economic, financial and political news. Trading in the markets requires students to apply class concepts to real decisions. Thus, the markets reinforce ideas from class and enhance student understanding.
The IEM provides students with a broader learning experience. It allows them to participate directly in a market instead of simply reading and talking about markets. This experiential learning improves pedagogy, stimulating students to develop their own intuition for concepts developed in class.
The markets operate with user friendly, menu-driven technology and are easily accessed through the Internet. In addition, many of our market pages include links to other resources on the web.
Trading in the IEM helps students integrate concepts from economics, statistics, accounting and finance. It provides hands-on experience with markets, one of the key ways in which wealth is distributed and acquired.
The IEM is an interactive case study in which students' own behavior generates economic transactions. These transactions can be used as a forum for discussing the underlying economic events which instigated the trading, or used to prepare financial statements which:
- Investigate how to value assets: Historical cost vs. market value vs. expected return, and valuing individual assets purchased as a bundle
- Investigate how to measure earnings matching costs to assets: specific ID, LIFO, FIFO, weighted average
- Recognizing gains and losses: differentiate recognition from realization
Instructors must set up an IEM Class Description before their students can open their IEM trading accounts.