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Show HN: A central bank simulator game with a realistic economic model

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Re: Show HN: A central bank simulator game with a realistic economic model

#231

Post by eru »

imtringued wrote: post #202
runeks wrote: post #178

Earlier quoted context omitted.

Why does the supply of money matter when it isn’t consumed? I understand why the supply of, say, steel is important: because we consume x tonnes of steel to create a building, so a limited supply of steel limits our ability to build new buildings. However, when we use money we don’t consume it. It simply changes owner. Sort of moving through the economy unchanged in form. > If you suck up all the money supply the eco…

The gold standard (and by extension fiat because it is still very similar to a gold standard because of the existence of cash) causes artificial wealth transfers from the poor to the rich. Let's say you own 1% of the gold of the economy. Notice that you also end up owning 1% of the savings in the economy. If an enterprising individual increases productivity and his company produces more, the value of gold will go up,…

Even under a gold standard, savings don't have to be in gold.

We don't all carry our savings in fiat cash (or central bank reserves) today, either.

You can save in bank deposits (denominated in gold, or fiat money, or whatever your bank offers), you can save by buying stocks, you can save by buying a house, etc.

Re: Show HN: A central bank simulator game with a realistic economic model

#232

Post by eru »

lottin wrote: post #172
user3939382 wrote: post #101

Earlier quoted context omitted.

My limited understanding, is (feel free to correct me): The problem with gold is that it's finite. It might be stable, but it's stable for a very small amount of money. The existing system allows us to create a huge supply of money that is used to drive the creation of these monster companies that end up doing things like inventing new microchip fabrication processes and iPhones. If you suck up all the money supply t…

Basically, you want to be able to control the quantity of money, because it's a key element of monetary policy. Monetary policy is a tool that governments use to counter boom and bust cycles, so economic cycles are smoother, and to maintain price stability. Under a metallic standard, monetary policy is much more limited. As far as I know, a central bank can still sterilise inflows of money that result from a trade su…

Monetary policy is still very much possible. Though it's perhaps best left to the private sector.

Re: Show HN: A central bank simulator game with a realistic economic model

#234

Post by uwuemu »

fartcannon wrote: post #146
reilly3000 wrote: post #137

After a rather dismal first couple of runs I read the blog post for some hints. The best I found was to try to raise rates during the good times so there is wiggle room during downturns. I was able to get 443,904 by raising to over 10% during the initial prosperity period and was able to cut rates in half as soon as there was a crash. Ultimately I stabilized at around 3.5%. As of the time of this post I think that is…

I set it to 0 for the entire run and got the same as you.

same here, set it to 0.25, around 440k...

Re: Show HN: A central bank simulator game with a realistic economic model

#235

Post by swfsql »

imtringued wrote: post #211
swfsql wrote: post #93

I recommend reading "Human Action" by von Mises. It explains a lot of economic concept including central banks and money. Eg. on why any amount of money is always sufficient for any society (assuming it has at least enough precision for the basic needs of the agents). This ofc is the opposite of what the game was based on. Another great article into central bank-caused recession is Rothbard's "Economic Depressions: T…

>Eg. on why any amount of money is always sufficient for any society (assuming it has at least enough precision for the basic needs of the agents). Until the interest rate on capital falls negative and people start wars. Austrian economists start world wars for sport.

Except that Austrian economists are not supportive of central banks and thus not supportive of negative interest rates?

On wars, it's quite the opposite: this is often supported or prolonged by a central bank monetary inflation, or governamental debt.

Re: Show HN: A central bank simulator game with a realistic economic model

#236

Post by cmmeur01 »

mrtksn wrote: post #217
reilly3000 wrote: post #137

After a rather dismal first couple of runs I read the blog post for some hints. The best I found was to try to raise rates during the good times so there is wiggle room during downturns. I was able to get 443,904 by raising to over 10% during the initial prosperity period and was able to cut rates in half as soon as there was a crash. Ultimately I stabilized at around 3.5%. As of the time of this post I think that is…

Maybe one can argue that this funded the internet revolution? Maybe thanks to the obscene amounts of cash flooding the society, people got to experiment much more freely without expectations of profits from products but give these products away at a loss and use their securities as gambling assets?

Free stuff and gambling, the cornerstone of any sound economy.

Re: Show HN: A central bank simulator game with a realistic economic model

#237

Post by jnordwick »

tapland wrote: post #129
user3939382 wrote: post #98

Earlier quoted context omitted.

Didn't Japan have negative interest rates?

A lot of places did in recent years

Nobody has had negative interest rates without policy prescriptions that may show up as a negative rate, but on balance sheets do have costs.

1. There have been negative yields for short periods of time, but a yield isn't the same thing. Yields can go negative for technical reasons related to trading, but the if you look at rates on fresh bond offerings, they'll still be slightly positive.

2. There can be government laws that require lending, penalties and reserve requirments, etc that all change the cost to carry. So while the interest rates shows up as negative, after adding in these other items the adjusted rate is still positive. For example, German mortgages went negative a few years back, but it a requirements for some banks to original home loans to increase ownerhsip and the penalties would have larger the the rate charge, so they loaned out at -0.5% instead of taking a 1% hit (can't remember the exact numbers).

I don't know anywhere that there has actually been negative interest rates without some other sort of interventions pushing towards them.

Re: Show HN: A central bank simulator game with a realistic economic model

#239

Post by mrtksn »

cmmeur01 wrote: post #236
mrtksn wrote: post #217

Earlier quoted context omitted.

Maybe one can argue that this funded the internet revolution? Maybe thanks to the obscene amounts of cash flooding the society, people got to experiment much more freely without expectations of profits from products but give these products away at a loss and use their securities as gambling assets?

Free stuff and gambling, the cornerstone of any sound economy.

Defiantly not sound or sustainable but it did spit out some interesting things.

Re: Show HN: A central bank simulator game with a realistic economic model

#240

Post by denton-scratch »

whimsicalism wrote: post #25

I found it impossible to lower unemployment from 10%? e: I see > One of the 10 orchards is always in its preparation phase which means it doesn't employ anyone so the natural unemployment rate is one out of ten or 10%

Yeah, I don't get that. There seems to be an assumption that the size of the workforce exactly matches the labour needs of the (maximum) number of orchards - 1. I can't see what that is modelling.

It seems to mean you can't have a labour crunch.

The fixed (maximum) number of orchards also doesn't seem to be modelling anything realistic; if apple prices go up and labour prices go down, I'd expect new businesses to enter the market.

Of course, labour crunches and new market entrants would make the game less stable, and economic collapse would be harder to avoid.

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