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

This game has some rather obvious flaws in terms of an economics simulator. Because the is only one product that means any changes to the price of apples is the inflation rate. Additionally, the demand for apples is basically fixed and 0% unemployment will guarantee a supply surplus causing the price to drop (immediately causing deflation). When deflation happens the only way they don't shut down orchards is if the interest rate is below 0%. If inflation hits more than about 5% all of the orchards shut down causing 100% unemployment. This model clearly assumes that if an orchard won't hit a predetermined ROI that it shuts down and won't re-open until it will get that profitability rate, but wages are largely unaffected by deflation, so the price of apples has to constantly out strip the operating costs of the orchard which are entirely variable.

The econimc model here couldn't be more supply side if it tried. It's a perfect analogy for how Republicans think economics work. Either you subsidize businesses to guarantee high profits, or the rich people will instantly take their ball and go home, and everyone will starve. Businesses don't instantly shut down if they think they won't post a profit for a quarter. Seriously, Amazon literally posted a loss every quarter for its first 10 years and they stayed open through investment so people would receive dividends after they finished establishing the scale they needed.

Whoever made this didn't put enough effort into thinking about the difference between a single product economy and real life. One market having a hicup doesn't cause 100% unemployment and a complete shutdown of all production in that market. This game fails to simulate a real economy for many of the same reasons the stock market rarely remains stable.

I am not a historian, but to tie world wars to gold standard is very very questionable. Weimar Germany failed due to a variety of reasons (reparations etc) but also because they printed away ie QE to "save the economy". Hitler rose on the promise of a radically better future.

The fall of empires in history can quite literally be traced in the % of gold in their coinage Eg. Byzantine, Rome. The problem with history is that one can claim fiat led to the Iphone and that users of gold in the 1500s had bubonic plague, but these links are very tenuous. Humans continue to make progress in science and tech. Revolutions were a result of crumbling economies that lost accountability to their own people. The 2 world wars were fought on debt and broke the gold standard[1]. All wars since have been debt wars [2]. Comparing gold to fiat is in my opinion similar to capitalism vs communism. Do people live on communism - yes. Does the system free up the market to chase efficiency - no. Similarly, making the Govt accountable and free market-y (ie not allowing them to dilute everybody's money via printing which is a hidden tax) will in my opinion bring about a step change in human progress

I am glad you bring up the interest rate price control part. I agree. That's one piece of the free market that is missing. The other is the gold standard making the Govt responsible in its spending instead of passing relief acts that package a ton of $ to unrelated expenditures under the name of helping families with children.

1: https://www.britannica.com/topic/money/The-decline-of-gold 2: https://bitcoinmagazine.com/culture/how-the-fed-hides-costs-...

The stock market going down and a decent potential of recession doesn't meet the definition of "financial crisis" that is used by people in finance.

I guess you can make up your own definition.

One other big thing this game is missing is that a big part of what a central bank does is maintain confidence in the system and steer sentiment. Central banks move markets just by talking about what they MIGHT do in the future. They don’t even always need to move interest rates, just talking about maybe moving interest rates can change things.

This is similar to strategic reserves. There is a really great planet money story about the rice shortage about a decade ago, which was completely artificial. There was plenty of rice, but a panic lead people to hoard rice which caused an actual shortage. The way they eventually stopped the panic was to announce they were going to sell rice from this huge strategic reserve… and just by announcing that, it caused the price to return to normal. They didn’t have to actually sell anything, just announce it.

Markets are not purely rational

https://www.npr.org/transcripts/169708534