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

Nicely done.

I'm looking forward to going through your code and design. It's a great addition to the set of games that help us get our head around these things.

Simple models have existed for a while that show the horizontal circuit can be stable.

Here's my correction of Steve Keen's initial horizontal circuit from 2010[0]

What you'll find is that the unemployment buffer stock that is disciplining inflation, not the interest rate. You can see this by setting the interest rate to zero permanently.

You don't need wonks in central banks - just very effective automatic stabilisers based around the labour buffer stock.

To that end if you hire the unemployed at a fixed wage paid by the central bank at an orchard that is slightly less productive at producing apples and sells its output at a fixed markup price you'll find that you get more overall output because the less productive buffer stock ends up being smaller than a completely unproductive buffer stock for the same price anchoring effect.

I explored that in my baseline economy model, a derivative of a mainstream model, which is still online.[1]. Code on Github [2].

What I also found is that when you introduce 'shops' rather than the mythical central auctioneer market, and people just go to the current cheapest shop near them things broke big time. [3]

Tap me up on Discord or Github if any of this is of interest.

[0]: https://www.debtdeflation.com/blogs/2012/01/11/guest-post-a-... [1]: https://new-wayland.com/blog/how-the-job-guarantee-fixes-mai... [2]: https://github.com/newwayland/baseline-economy [3]: https://new-wayland.com/blog/revealed-the-simple-change-that...

I barely made any changes and resulted in 430K

When there are fewer goods circulating because of a negative supply shock, prices rise and you get inflation. The natural response for a central bank might be to reduce spending levels, so less money circulates and then inflation subsides. But that's usually bad (or at least very unpopular), because it compounds scarcity with scarcity and makes everybody worse off.

Generally, non-monetary inflation/deflation is outside of a central bank's control and other policy levers should get pulled (e.g. Congress releasing stockpiles of material, for example).

I follow your argument but I would argue that incentives to hoard money aren't necessarily bad. I agree with you that hoarding money leads to a reduced money supply, but I don't think this is necessarily a bad thing.

For example: the GFC. Central banks bail out bad actors which perpetuates the incentives that caused these actors to make bad decisions in the first place ("bad" meaning not optimal globally, e.g. selling bonds you know are worthless). If a gold standard was in use, this would simply be impossible. The government would need to increase taxes to bail out the banks, which would be rejected by citizens who are busy hoarding gold and cursing the banks, which means the banks that replaced the bad actors would be incentivized to avoid the mistakes their predecessors made. Alternatively, the GFC may simply not have occurred, because under a gold-standard the banks cannot assume they would be bailed out and this knowledge would cause them to be more risk-averse. "Every Battle Is Won Before It Is Ever Fought"

The use of fiat currency provides control over the economy, but we shouldn't assume that that control is always used in the best interests of the many. The reason a gold standard is so popular among libertarians is that no institution can have arbitrary monetary control over individuals via printing money.

Does it have a Taylor Rule? And a Reverse Taylor Rule?