CONTACT: GEORGE MCCRORY
100 Old Public Library
Iowa City IA 52242
(319) 384-0012; fax (319) 384-0024
Release: July 25, 2000
National Science Foundation awards $459,798 grant to Iowa Electronic Markets
IOWA CITY, Iowa -- The University of Iowa's Iowa Electronic Markets (IEM)
is putting students to work. With the help of a $459,798 grant from the National
Science Foundation (NSF), students can move out of the traditional classroom
setting into a hands-on laboratory where they experience real market forces.
The two-year grant will allow 30 four-year colleges serving minority populations
and rural community colleges across the U.S to develop and share curriculum
intended to promote economic literacy among their students. The grant was
awarded to four professors in the University of Iowa Henry B. Tippie College
of Business: Joyce Berg in accounting, Robert Forsythe in economics, Tom Gruca
in marketing and Tom Rietz in finance.
The project is a collaboration between UI and more than 30 colleges, according
to Gruca. Teams of professors from the participating schools will develop
course work in conjunction with the UI professors. Much of the IEM curriculum
will be accessible for download on the IEM website.
"The goal of this grant is to help teachers incorporate new technology
like the IEM and the Internet into their courses to spur active learning and
develop technology skills. It's also a way to bridge the digital divide among
these schools that may not have had the technical resources in the past,"
Berg said the IEM takes an interdisciplinary approach, in areas such as
accounting, economics, finance and marketing, and the web-based markets serve
as the common theme. "More and more people are finding themselves in
markets such as eBay and E*Trade and are able to access huge amounts of information
on the web. The IEM teaches students to make smart and quick decisions in
these environments," she explained.
Founded in 1988 at the UI, the IEM is a real-money futures market where
students can trade shares based on future events, such as presidential elections,
a company's quarterly earnings, a corporation's stock price, or a movie's
box office receipts. The web site for the IEM is at http://www.biz.uiowa.edu/iem.
Students in courses supported by this grant will receive grant funds when
opening their accounts.
This grant demonstrates NSF's support for the "learning by doing approach"
to business education, says Robert Forsythe, senior associate dean of the
Tippie College of Business
"We believe that through this hands-on approach, students in business,
economics, political science and other majors at participating colleges will
receive a better understanding of how markets work, how trades are conducted,
and how social, economic and political issues affect the economy," he
said. "This grant will help more than 60 faculty across the U.S. incorporate
a valuable teaching tool into their lessons."
Students use the IEM as a laboratory exercise, learning in much the same
way as labs are used in teaching other sciences. A professor teaching a unit
on interest rates can use the IEM's market on the Federal Open Market Committee's
(FOMC) decision on interest rates, motivating students to study why interest
rates are important, the role of the FOMC and what information people use
to forecast FOMC actions.
Eric Rahimian professor of economics and chair of the department of economics,
finance and office systems management at Alabama A&M University has used
IEM in his "Money and Banking" classes twice.
"My students have greatly benefited from the hands-on experience that
IEM and particularly the Federal Funds Rate Market has provided for them,"
Rahimian said. "I consider IEM a step toward bringing the market trade
experience to the class environment. My students were paying more attention
to the lectures on economic and monetary policies because of the connection
to and trade on future markets created by IEM. The nice feature of IEM is
that it is a real future market with the necessary features including reward
for good decision making and using expectation and personal judgement to maximize
one's rates of returns on investments."
The grant comes from the National Science Foundation's Division of Undergraduate
Education. For the past three years, a pilot version of this project was funded
by the Fund for the Improvement of Postsecondary Education (FIPSE) of the
U.S. Department of Education.