151–160 of 323 posts
"What has government done to our money" is a nice read to understand money, inflation, central banks, exchange rates between currencies, etc.
https://mises.org/library/what-has-government-done-our-money
It opens with describing what money is from the first principles.
Earlier quoted context omitted.
Historically 90% of families will lose their wealth within 3 generations. How does that jive with "people will save too much" when it seems rather intuitive monetary policy has nothing to do with how a grandkid who has never worked a day in their life, spends money?
Because saving money is not consuming which is bad for the economy.
In my first game, I carefully managed the interest rate to keep inflation around 2%: Your economy produced 431540 apples. Next game, I set the interest rate to -0.50% right away and left it there: Your economy produced 442411 apples. Inflation was 1.5% in the end. Doesn't seem to matter too much what you do. Maybe in real life too.
100% unemployment, nothing produced.
Might be a lesson there.
This game needs a "gold standard" mode to see what happens to the toy economy with no central bank! EDIT: It would also be nice if the game paused around major events to give you more time to think & adjust. I found that the economy went off the rails if you don't react right away.
That would result in an economy with huge deflation: People consuming the bare minimum of apples needed for survival because their gold savings would appreciate each year in value.
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…
Earlier quoted context omitted.
That was an insightful game. There was a negative demand shock scenario and to play it properly, it requires first dropping interest rate to 0%, then followed by high interest rate to bring inflation back down over time, which is exactly what's happening in the real world. It's likely that's the reason why they took the game down.
Any idea how it would expect you to handle negative demand shock first, then inflation driven by a subsequent supply shock (instead of or in addition to increased money supply)?
And to think that the central bank of central banks is a private company... makes us think right? https://www.bis.org
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…
Earlier quoted context omitted.
Thank you so much! I've similarly been trying to wrap my head around monetary things recently, and as with learning anything in physics (my field), I believe you don't really understand a model unless you can code up a simulator. It's been maddening not being able to find a comprehensive model of how all the bits fit together, and I have many times wondered if the lack of existence of a game like yours meant that no…
I've been looking for something similar too, an explanation of the financial system written out in code so that I can try understand it.
In economies, people, politics, and their dispositions, their sentiments, dominate.
How do you model human responses to local, national, regional, and global events. How do you model human cascades?
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…
Since the income from the central bank's interest is paid out to the people (and vice versa, negative interest will be passed as debt), the challenge seems like finding the correct ratio to increase GDP: inflation and interest income. New money is only generated through loans, so if I understand this correctly, one should strive to have high interest rates?
edit: After tweaking my strategy a bit to try to keep interest rates as high as possible without closing any business, I got to 443647.
edit: up to 444823