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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

#301

Post by spurgu »

denton-scratch wrote: post #219
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. Many, many years ago I typed a BASIC program listing for a macro-economics simulation from a computer magazine into a computer. As with your game, the only lever was the bank interest rate. The outcome (for me) was always economic catastrophe. I'd love to play an economic sim that also has a taxrate input; I realise that's normally not set by the central bank; but then again, it's often not the central ban…

> Although an instrument of the US Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or by anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms."

I.e. the US central bank doesn't answer to anyone.

Source: https://en.wikipedia.org/wiki/Federal_Reserve

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

#302

Post by capableweb »

forgotmypw17 wrote: post #289
capableweb wrote: post #213

Earlier quoted context omitted.

Considering that the values constantly change (and the graphs being canvas elements), how would someone go about to play this game without being able to see/hear the values clearly (and therefore being able to see that the buttons are buttons, even if they are `div`s) as they change?

In my particular case, it is not a case of not being able to see the values, but being able to press the buttons without using a pointing device. In accessibility, the scenarios you can think of are only the tip of the iceberg which represents all the possible scenarios.

That makes sense. Thanks for sharing deeper details about the issue.

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

#303

Post by notahacker »

barry-cotter wrote: post #300
notahacker wrote: post #267

Earlier quoted context omitted.

Yes. This is why they no longer operate on a gold standard, which de facto contracts the money supply (people want to hold "safe" gold rather than circulate money) in the middle of a recession

The Fed did a lot worse than a Gold Standard would have. You can’t blame the gold standard for a decision to contract the money supply.

They were literally on a gold standard at the time. You absolutely can blame the gold standard for the Fed decision to raise interest rates to protect gold reserves.

The only decision the Fed could (and eventually did) take to allow the money supply to expand was removing the US from the gold standard.

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

#304

Post by evandale »

pes23 wrote: post #135
WanderPanda wrote: post #122

Earlier quoted context omitted.

While we are at it: I need this for climate change as well

There's The Climate Game¹ 1: https://ig.ft.com/climate-game/ 2: https://news.ycombinator.com/item?id=31106819

This game was ok until it asked about energy generation and didn't allow you to increase nuclear production.

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

#305

Post by roflyear »

adam_arthur wrote: post #278
roflyear wrote: post #274

Earlier quoted context omitted.

Wrong! In reality low rates does not mean more people are qualified for loans. So what happens is more people don't get loans. Or at least many more. Now if you change laws to make it attractive for people with higher risk to get loans. Or give them loans from the government. Etc... That's different.

More people are qualified. Refinance a mortgage from 10% to 2%, and what does that do to your cash flow and ability to borrow more? Businesses carry a lot of debt too, and can refinance lower and borrow more. Compare private sector debt levels today vs the 80s

It doesn't change the risk profile enough to mean that many more people are getting loans, at least historically.

Just because businesses can afford more debt, doesn't mean banks are going to give it to them. This is flawed logic.

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

#306

Post by SkyMarshal »

jxf wrote: post #145
SkyMarshal wrote: post #84

Earlier quoted context omitted.

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)?

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 outsi…

Yeah that’s what I’m getting at - supply shocks probably need a different solution than scarcity^2.

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

#307

Post by BenoitEssiambre »

ThalesX wrote: post #4

I have no idea if this was a bug or a failure model but it seemed I was doing decent until everything started failing all at once. Orchards running out of business etc. LE: I tried another round. Put the interest rate at -0.5 and just left it there. > I fought inflation in SimCB and my economy produced 442486 :apples:

Since this was happening to a lot of people, I added a few paragraphs to the blog post to help explain it:

"One common experience for new players is they start the game, prices creep down, one orchard goes bankrupt, then the other ones quickly fall like dominoes and unemployment goes to 100%. This dynamic is exaggerated in SimCB. What happens is that when an orchard goes bankrupt, that's ten percent of the economy going offline. Not only that but if that business had loans, those loans get reversed by a negative dividend imposed on people. In a real economy this would happen through banks or other lenders who would be forced to take the hit (since you can't default on the central bank). In any case this results in an instant shrinking of the money supply. The negative dividend acts like a one time tax, people have less money in their bank accounts, spend less on apples, prices drop quickly which makes the other businesses less profitable and go bankrupt.

In a real economy, usually not 10% of businesses would go down in one go and the central bank would have more time to react. Governments might also take on debt, implement bailouts etc. to help smooth out the situation. I could have implemented some kind of automatic government stabilizer. Or I could have made an economy with a hundred businesses instead of ten, so that these effects were more gradual. Some things to maybe try in future versions. "

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

#308

Post by yywwbbn »

Aunche wrote: post #90
anm89 wrote: post #24

Earlier quoted context omitted.

While there were panics and issues before the era of active central banks, most fo the time, things were calm. The idea that the world would burst into flames if central banks weren't there to micro tinker is not historically supported. It is far from a fringe viewpoint in the finance world that central banks have contributed more to volatility than to stability over the last 20 years.

The world didn't burst into flames because most people were agrarian and largely self sufficient. Part of the reason the Great Depression was so devastating was because the economy was more interdependent than ever before.

That wasn’t true in the 19th century. There weren’t that many self sufficient farmers left back then and the economy was heavily interlinked, especially after the rise of railroads.

The economy was in a permanent boom and bust cycle e.g. the Long Depression (or the first Great Depression) lasted close to a quarter of a century.

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

#309

Post by yywwbbn »

BirAdam wrote: post #46
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.

If that were true then the Victorian era should not have happened.

If you looked at the chart in https://www.in2013dollars.com/uk/inflation/1800?endYear=1914...

The value of currency fluctuated much more during most of the 19th century than it did between 1990 and 2020. It’s just that the periods of inflation were followed by years of deflation. I think for most people and businesses stable and predictable inflation os generally preferable to a permanent boom and bust cycle.

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

#310

Post by yywwbbn »

silentsea90 wrote: post #154
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.

I really dislike this Keynesian line of thinking. It helps Governments print away to glory and have no accountability. You'd only save to an extent, because you have to fulfill your hierarchy of needs. Prices ultimately will reflect supply and demand, and your paycheck will too, not necessarily leaving a huge buffer to invest and save in gold. That's similar to how wages today aren't anywhere close to long term subsi…

> worked for 1000s

Well you would be right if upu only averaged out yearly inflation over large periods of time. However this stability you’re talking about is just an illusion.

Year to year it was much worse e.g. during the 19th century yearly inflation in excess of 10% was much more common than after WW2 however it was usually followed by similarly high deflation when the current bubble burst.

https://www.in2013dollars.com/uk/inflation/1800?endYear=1914...

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