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Building an economy simulator from scratch

thomassimon.dev

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Re: Building an economy simulator from scratch

#131

Post by neilwilson »

" tax works by pooling a percent of sellers revenue."

What the public servant actually does is impose a tribute on the workers in a denomination the public servant determines. If you don't provide the denomination then the public servant confiscates your assets by force.

The population then offers their goods and services in return for the denomination the public servant issues. The public servant then determines the level of the tribute required by how much of its own denomination it gives in exchange for the tribute.

That's the source of money, and the source of the price level.

There is no 'universal exchange commodity'. Money is really just promises between people.

Fred would say to Jim: "here's a pig, owe me one". Fred now has Jim's IOU as an asset which he could give to Bob in exchange for something Bob made so Bob can claim a pig from Jim.

Re: Building an economy simulator from scratch

#132

Post by nvy »

neilwilson wrote: post #131

" tax works by pooling a percent of sellers revenue." What the public servant actually does is impose a tribute on the workers in a denomination the public servant determines . If you don't provide the denomination then the public servant confiscates your assets by force. The population then offers their goods and services in return for the denomination the public servant issues . The public servant then determines t…

>That's the source of money, and the source of the price level.

The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

Re: Building an economy simulator from scratch

#133

Post by mikhailfranco »

ch4s3 wrote: post #16
econperplexed wrote: post #9

OT: I see economists of various ideological tilts constantly arguing about how macroeconomic variables will respond to specific government policies. You know: "this new tax will increase inflation; no it will not, it will increase unemployment". What I don't get is why there are no readily available online macroeconomic simulators with real world data that make these sort of predictions. For a lot of countries, up-to…

> What I don't get is why there are no readily available online macroeconomic simulators with real world data that make these sort of predictions. You aren't the first person to have this thought. It just turns out to be incredibly difficult.

Sounds like we need wikiconomy crowd-sourced model building over two open-source platforms:

- mathematical macro-economic simulation run by differential dependencies (like Minsky)

- agent-based Monte-Carlo platform for behavioural experiments to find or validate the macro rules

There would be a core set of models, with parametrized instances running for each country, loosely coupled through trade flows, capital flows, FX markets and migration.

Re: Building an economy simulator from scratch

#134

Post by jmopp »

dclowd9901 wrote: post #121
WillPostForFood wrote: post #78

Earlier quoted context omitted.

I'd go the other way, behavioral economics ought to be shelved for good. Classic econ should come back, but with a stamp on its forehead that is is not science or a practice. https://www.thebehavioralscientist.com/articles/the-death-of...

So what, we have no ground truth about economics? Is it just a close cousin of psychology?

Economics sits at that intersection between the social sciences and the exact sciences: you can get some useful quantitative predictions out of it, but that is discounted by the fact that people are messy, and become even messier where money is concerned.

Re: Building an economy simulator from scratch

#135

Post by _the_inflator »

bagpuss wrote: post #37

The MONIAC built in the 1950s by Bill Phillips (of Phillips curve fame) attempted to model economic processes with coloured water (fluidic logic) https://en.m.wikipedia.org/wiki/MONIAC

Vividness has its advantages. You could call it a simulator as well as one of the world's first dashboards as well.

Re: Building an economy simulator from scratch

#136

Post by mordae »

nvy wrote: post #132
neilwilson wrote: post #131

" tax works by pooling a percent of sellers revenue." What the public servant actually does is impose a tribute on the workers in a denomination the public servant determines . If you don't provide the denomination then the public servant confiscates your assets by force. The population then offers their goods and services in return for the denomination the public servant issues . The public servant then determines t…

>That's the source of money, and the source of the price level. The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

They still have to borrow the money from the central bank. Fractional reserves mean that the credited account's bank must deposit a portion of the money bank at central bank.

So there is a limit to how much money can the bank create.

Re: Building an economy simulator from scratch

#137

Post by threatripper »

mordae wrote: post #136
nvy wrote: post #132

Earlier quoted context omitted.

>That's the source of money, and the source of the price level. The vast majority of money in the modern economy is created by banks, not by the tax agencies or even the mint. When the bank lends you $1000 they just create it out of thin air and credit your account by $1000.

They still have to borrow the money from the central bank. Fractional reserves mean that the credited account's bank must deposit a portion of the money bank at central bank. So there is a limit to how much money can the bank create.

They must only borrow the money (or get it from somebody else who got it from somebody who borrowed it from the central bank) that they need to pay you out in paper or digital cash and the money they have to keep in reserve. They do not have to borrow the whole credit value. The credit itself is created out of thin air but with some strings attached, so banks can't just create infinite amounts of credit and they cannot just pay out arbitrary sums of created credit. (Source: Some books I read a long time ago.)

Re: Building an economy simulator from scratch

#138

Post by dboreham »

dclowd9901 wrote: post #121
WillPostForFood wrote: post #78

Earlier quoted context omitted.

I'd go the other way, behavioral economics ought to be shelved for good. Classic econ should come back, but with a stamp on its forehead that is is not science or a practice. https://www.thebehavioralscientist.com/articles/the-death-of...

So what, we have no ground truth about economics? Is it just a close cousin of psychology?

Economics is bulk effect Psychology.

Re: Building an economy simulator from scratch

#139

Post by lottin »

neilwilson wrote: post #131

" tax works by pooling a percent of sellers revenue." What the public servant actually does is impose a tribute on the workers in a denomination the public servant determines . If you don't provide the denomination then the public servant confiscates your assets by force. The population then offers their goods and services in return for the denomination the public servant issues . The public servant then determines t…

> That's the source of money, and the source of the price level.

What do you mean?

Re: Building an economy simulator from scratch

#140

Post by teo_zero »

Am I the only one to find the simulation deviate from the description starting from Simulation 8?

For example, I see a farmer with 7 food, 7 water and 7 wood, buying water. According to the description, their QoL would be 7 both before and after the transaction, so they are not supposed to buy because there wouldn't be an increase of their QoL:

> People are potential buyers of the resources that increase their quality of life

Additionally the average QoL indicator seems wrong. This is what I see at step 72:

  Farmer 1: 50$ 6 6 5 => QoL 5
  Farmer 2: 90$ 4 4 5 => 4
  Farmer 3: 10$ 7 7 7 => 7
  Avg QoL 3.0
How can 3.0 be the average?
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