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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

#311

Earlier quoted context omitted.

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.

There's a very clear and obvious relationship between prevailing interest rates and levels of debt

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

#312
post #93

I recommend reading "Human Action" by von Mises. It explains a lot of economic concept including central banks and money. Eg. on why any amount of money is always sufficient for any society (assuming it has at least enough precision for the basic needs of the agents). This ofc is the opposite of what the game was based on. Another great article into central bank-caused recession is Rothbard's "Economic Depressions: T…

I would recommend against Human Action. It's "Austrian" school economics, which is considered heterodox, and it's something that's understandable by a layman but generally not be considered good economics. I fell into the trap when I was in high school of reading Mises and Rothbard et al, I wish I had not.

^ For the theory, absolutely zero arguments were given whatsoever.

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

#313

Earlier quoted context omitted.

When you’re making an analogy, you get to choose which aspects of the metaphor are relevant. For example, are you aware that when launching a rocket, you want to avoid wasting fuel by going to full throttle in the thick, lower part of the atmosphere, where you’ll waste a lot of the energy you gain to air resistance? There’s a reason one of the checkpoints in a space shuttle launch sequence was “go for throttle up”. S…

But why is any of it relevant? When you create if you’re supposed to explain why the analogy/metaphor is apt first. You use them to drive a point home, not to make the point in the first place. > are you aware that when launching a rocket, you want to avoid wasting fuel by going to full throttle in the thick, lower part of the atmosphere, where you’ll waste a lot of the energy you gain to air resistance? Yes, you’re…

The point is that the parts of the analogy that are relevant are the parts the person using it for explanatory effect chooses.

They’re not proposing an isomorphism, they are making a comparison to motivate you to modify your thinking.

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

#314
post #312

Earlier quoted context omitted.

I would recommend against Human Action. It's "Austrian" school economics, which is considered heterodox, and it's something that's understandable by a layman but generally not be considered good economics. I fell into the trap when I was in high school of reading Mises and Rothbard et al, I wish I had not.

^ For the theory, absolutely zero arguments were given whatsoever.

Fair - I did not give any arguments, just my personal experience as someone that was really deep into that subculture. I'm also not an economist, so I would defer to the professional consensus, which I think we'd both agree is that modern Austrian economics is not considered a serious thing. I think we should be wary of debating a highly technical topic as a layman - it's very easy to be wrong, and it's hard to get feedback from people more versed in these topics. For context - I wanted to be an Austrian economist when I started college, I was majoring in math (real analysis, etc) and econ with the intention of starting an econ phd. I fell in love with computer science instead. I look back on my libertarian / austrian phase as just me having too much time on my hands as a high schooler, being a pretty smart student, and there being a wealth of info online about it. It feels even better as a smart person to think that you know something others don't, including professional economists. I just want people online to be aware of the Austrian rabbit hole, because the von Mises institute is just a think tank in Alabama that's very good at creating an online presence that feels legitimate and scholarly, but it's not really. That's not to say there's not interesting arguments, I'll always be attracted to some libertarian ideas, e.g. some of Walter Block's Defending the Undefendable. But I think most people can relate to having strong convictions about something, growing older, losing the conviction, and then being wary of taking extreme positions in topics that they know little about.

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

#315
post #40

I tried to keep inflation between 1.5-2% for the first 50 months and then decided to find out what happens if I YOLO permanently fix the interest rate to -0.5%. After the 240 months I somehow ended with GDP 442999 and 1.53% inflation. How come? Shouldn't I have a runaway inflation?

Ha, I did the exact same thing. I guess the fed has it all wrong! Edit: I guess it's not as fair to the player, but maybe there should be more randomness in there, or perhaps some kind of forcing function that makes things a bit less stable.

Macroeconomics aside, I surely am glad to see other primates in here, have been going bananas for a while on my own.

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

#316
post #173

Earlier quoted context omitted.

The model they use in the simulation is a bit weird. In reality, keeping a steady nominal GDP is a good idea. In fact, adopting a nominal GDP level target will make the market help you keep things steady. (By anticipating your central bank actions.)

I did include a graph of production in "coins worth per month" for those who would like to try to stabilize NGDP.

Thanks!

The game moved way too fast for me, perhaps I did something wrong. Is there a way to make it turn-based and only advance when you tell it to?

Btw, the 'magic' of a nominal gdp level target isn't just in the stable gdp itself, but in announcing a target, so that economic actors can profit by anticipating the actions of the central bank. And that anticipation itself stabilises the economy already.

See https://en.wikipedia.org/wiki/Rational_expectations

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

#317
post #312

Earlier quoted context omitted.

^ For the theory, absolutely zero arguments were given whatsoever.

Fair - I did not give any arguments, just my personal experience as someone that was really deep into that subculture. I'm also not an economist, so I would defer to the professional consensus, which I think we'd both agree is that modern Austrian economics is not considered a serious thing. I think we should be wary of debating a highly technical topic as a layman - it's very easy to be wrong, and it's hard to get f…

Interesting, can you please share anything, besides that "professional consensus" is different, on what is the problem with the Austrian view of central banks? You realize that by saying "Professional consensus" in a field of study, not practice, is worthless by definition?

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

#318

Earlier quoted context omitted.

Has anyone gotten less than 400K? Heck, less than 440K?

Looks like if interest rates get high enough everything will shut down.

Okay, so I tried running the entire game at -0.5, and everything was hunky-dory until the yields shrank. Then things went a bit crazy.

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

#319

Earlier quoted context omitted.

Fair - I did not give any arguments, just my personal experience as someone that was really deep into that subculture. I'm also not an economist, so I would defer to the professional consensus, which I think we'd both agree is that modern Austrian economics is not considered a serious thing. I think we should be wary of debating a highly technical topic as a layman - it's very easy to be wrong, and it's hard to get f…

Interesting, can you please share anything, besides that "professional consensus" is different, on what is the problem with the Austrian view of central banks? You realize that by saying "Professional consensus" in a field of study, not practice, is worthless by definition?

Not really, no. You're both correct that I offer no substantive arguments against austrian economics, ABC theory, or their critique of central banks.

I'm not a professional economist. I honestly know very little about the subject (apart from taking intermediate micro / macro and having had an interest in the subject since childhood). I don't think I could argue against the view that "climate change is a hoax" either, because I don't really understand the science. There are many things in my life that I believe despite not being a PhD in the field - and yes, a lot of it relies on appeals to authority and my impression of the world, which we could disagree on. I'm just advocating that we all share a bit of humility when it comes to highly technical topics, and in doing so we should probably defer more to academic consensus. Otherwise, it's essentially like debating religions - fun perhaps, but no one really knows what they're talking about.

I think we can both agree with the statement that academic economists by and large dismiss Austrian economics. If not, let me know, and I'd be happy to debate that point. Of course, "Austrian" economists have made many meaningful contributions to the field, e.g. Menger's marginal revolution, Bohm-Bawerk's work, Schumpeter's creative destruction, etc. Hayek was a well regarded political and economic thinker.

However, modern day austrian economics is essentially a think tank that espouses a very hardcore version of libertarianism - claiming that modern economics is a farce, empirical methods are useless, and that inflation is the devil and we need to return to the gold standard. I remember reading Rothbard's The Case Against the Fed and parroting many of the points, having been impassioned by Ron Paul's 2008 presidential campaign. I remember railing against the Fed and its loose monetary policy, absolutely sure that inflation was coming post 2008 (it did not).

I can't really provide a detailed takedown of Austrian economics, again, because I'm not an economist. All I have is my life experiences of having believed in it ardently, and then not, and then asking myself why I was ever convinced in the first place. Bryan Kaplan, another extremely libertarian / ancap economist, has a critique here that some might find influential: https://econfaculty.gmu.edu/bcaplan/whyaust.htm. But most serious economists don't even address it, presumably because it's not a part of academic discourse at all. More pop economists from across the spectrum, like Krugman and Friedman, both disparaged it of course.

The thing to be wary about is that Austrian economics is essentially ignored by mainstream economists, but Austrian believers are extremely passionate and have built up a huge online presence - led by a handful of non-economist political bloggers. So if you google austrian economics, you'll find pages and pages of Mises Institute, Lew Rockwell, etc. It's very easy to fall down the rabbit hole. Meanwhile, academic economists are doing research, not creating pages and pages of "austrian economics is pseudoscience" articles. Listen, if you want to be a libertarian, that's fine by me - but upholding austrian economics to help justify your political beliefs seems a bit unnecessary to me.

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

#320
post #316

Earlier quoted context omitted.

I did include a graph of production in "coins worth per month" for those who would like to try to stabilize NGDP.

Thanks! The game moved way too fast for me, perhaps I did something wrong. Is there a way to make it turn-based and only advance when you tell it to? Btw, the 'magic' of a nominal gdp level target isn't just in the stable gdp itself, but in announcing a target, so that economic actors can profit by anticipating the actions of the central bank. And that anticipation itself stabilises the economy already. See https://e…

Yeah expectations are definitely a tricky part of economics and so not knowing how to model them very finely, I had to keep things simple. I tried to integrate a kind of extrapolative expectations with regards to inflation using a linear regression over a rather long period to simulate the expectations being "anchored" and "smoothed".

It might be interesting to allow the expected trend to be changed by announcements and such as you suggested.

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