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

benoitessiambre.com

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

#161

Post by Nition »

doubleunplussed wrote: post #44
BenoitEssiambre wrote: post #2

I made this game in order to try to wrap my head around central banks, inflation and macroeconomics, in order to get a better understanding of the aftermath of the global financial crisis and the current period of high inflation. Here is a blog post that goes into further details: https://benoitessiambre.com/simcb.html

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…

This is exactly why MONIAC[0][1] was created in 1949. Not a real computer exactly - it simulates the entire system with water flow.

[0] https://en.wikipedia.org/wiki/MONIAC

[1] https://www.youtube.com/watch?v=rAZavOcEnLg

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

#163

Post by Aunche »

brutusborn wrote: post #147
Aunche wrote: post #96

Earlier quoted context omitted.

Yes. People will always demand consumer goods. The problem with deflation is that it incentivizes you to hoard money rather than invest in businesses give out loans. During periods of economic growth with a gold-backed currency, we don't actually see much deflation because the money supply expands when banks naturally give out more loans and people invest a greater percentage of their wealth into equity. The problem…

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. sellin…

Hoarding money isn't a bad thing if that's your normal state, but it's a bad thing to go stop lending and investing during a recession when that is what is needed the most.

Mortgage backed securities caused the GFC, but only a small part of the bank dealt with mortgage backed securities. It doesn't make sense to let that drag the rest of the bank and the economy down along with it, which is why the bailouts were necessary. It's not the job of central banks to punish bad actors. Their job is to prevent the next Great Depression. You don't blame the ER doctor who delivers a frightening dose of blood thinners to a heart attack patient. You blame the patient's bad habit of eating barrels of pork, which in this case would be Congress. If Congress did not force the treasury to issue so much debt, the Federal Reserve wouldn't have to buy so much of the debt back in order to lower interest rates.

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

#164

Post by quickthrower2 »

dpatru wrote: post #49
jcfrei wrote: post #28

Earlier quoted context omitted.

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.

For decades computers and related technology have been dropping in price. Yet people still buy and the industry is one of the most prosperous in the economy.

Computers produce a dividend (their usefulness to produce other income, and/or as entertainment)

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

#165

Post by quickthrower2 »

jagged-chisel wrote: post #55
dpatru wrote: post #49

Earlier quoted context omitted.

For decades computers and related technology have been dropping in price. Yet people still buy and the industry is one of the most prosperous in the economy.

It is difficult to compare because we don’t have apples that have become smaller with higher nutritional value by approximately a factor of two every 18 months.

Nor do we have a way to make our bodies less energy efficient by the same factor :-)

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

#166

Post by leononame »

I think, as of writing, I have a new high score: 444823.

I achieved this by trying to keep interest rates as high as possible. I started out with 5% which gradually increased to 7%. During the prosperity, I was mostly fixed at 13% and then lowered to 6% just before the drought. I kept the interest rate wiggling between 6% and 8% for the rest of the game (though I probably could've gone much higher until the people spend 10% less).

Keeping the interest high is key, since it's (afaik) the only way to generate new money. Additionally, income from interest will be spread out between the population, so going for high wages is not absolutely necessary, since the investment income from the orchard will also reflect in the population's income.

edit: Just going to piggy-back on this comment. Are there any interesting, recent economic simulation games out there? Especially macroeconomics are fascinating and would make for a challenging game.

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

#167

Post by hgomersall »

brutusborn wrote: post #150
neilwilson wrote: post #141

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…

Do you know of any examples of countries that had a well functioning job guarantee policy?

Here's a bit of a discussion: https://www.nakedcapitalism.com/2012/04/randy-wray-the-job-g...

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

#168

Post by lottin »

TheSpiceIsLife wrote: post #159
vanjajaja1 wrote: post #86

Earlier quoted context omitted.

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.

But, aren't finical systems a sociological science, rather than a mathematical model? 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 ?

Mathematical models are that, models—a simplified version of a particular phenomenon. Economic models are no different, in particular they presuppose, among other things, that economic agents behave rationally [1].

[1] https://en.wikipedia.org/wiki/Homo_economicus

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

#170

Post by retube »

This is really interesting. but the roles of commercial banks and central banks are very different (intermediating credit and can go bust vs controlling money supply and can't go bust[1]), and to exclude the former from your model means you are missing a key component of any economy.

[1] Caveats apply!

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