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Building an economy simulator from scratch

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Re: Building an economy simulator from scratch

#191

Post by teo_zero »

Ruddle wrote: post #165
teo_zero wrote: post #140

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 qualit…

Author here, In case all resources are equally owned, the QoL is bound to all of them (as opposed to none). It does take multiple purchases to increase the QoL, but it is the only way. Otherwise people would starve due to aboulomania. The average QoL is sampled each end of day, step 73-75 depending on the random seed. At step 72 you are seeing the zeroth day average QoL ,with nearly all the intraday mutations of the…

Thanks for the explanation. It makes perfectly sense.

Re: Building an economy simulator from scratch

#192

Post by jwiz »

bavell wrote: post #118
motohagiography wrote: post #110

The game "Captain of Industry" might be a more complete simulation: https://store.steampowered.com/app/1594320/Captain_of_Indust... Big thread on it from last year here: https://news.ycombinator.com/item?id=31586833

I bought it after seeing that post at the time, great game of you're a fan of games like Factorio. Very well designed and tons of fun!

Any time I try to play not-Factorio, I become frustrated with how unpolished their interfaces are in comparison.

Re: Building an economy simulator from scratch

#193

Post by dkga »

denton-scratch wrote: post #148

In the late 80s, I typed in a BASIC economy simulator I found in some computer magazine. It ran to two or three closely-typed pages (sides). As Chancellor of the Exchequer, you set the tax-rate, interest rate, level of public spending and so on; then you ran a cycle. I can't remember whether a cycle was a month or a year. After about three years, the workers would be on strike and there would be rioting in the street…

Economist here. Why Modern Monetary Theory in particular? Just curious :)

Re: Building an economy simulator from scratch

#194

Post by jschveibinz »

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.

This is largely correct. Commercial banks are permitted to leverage deposits (Tier 1 capital) by a large ratio.

If a bank lends $10 for every $1 of capital reserves, it will have a capital leverage ratio of 1/10 = 10%.

According to the Basel III standards, this ratio must be at least 3%, though country-wise regulations may vary.

https://www.wallstreetmojo.com/leverage-ratios-for-banks/

But money is also created in other ways. Here is a short article on how money creation, value creation and wealth creation are related:

https://nickrogers.tech/money-creation-wealth-creation-value...

Cheers!

Re: Building an economy simulator from scratch

#196

Post by [deleted] »

jeezfrk wrote: post #75
smitty1e wrote: post #65

Earlier quoted context omitted.

The "good" news is that gravity hates the Tower of Babel that every society inevitably produces.

No. Gravity and a flat surface doesn't exist in money-power. It is buoyancy. It lifts few people up very high as they push down more that go down under the waves.

[deleted]

Re: Building an economy simulator from scratch

#197

Post by logicallee »

Ruddle wrote: post #85
logicallee wrote: post #77

Great set of simulations! Can someone explain why in Simulation 16, 4 producing workers can support 3 non-producing workers consuming just as much as them with just 10% taxation and yet they have similar QOL? It doesn't make sense to me intuitively. If we ignore money and just look at goods this implies 3 people can do "nothing" (the government workers don't buy from anyone in this simulation) and yet consume as much…

Author here, simulation 16 shows that money printing, and tax have common effects. The state can replace one with another. Here the 65% tax is replaced with 10% tax plus inflation, i.e., giving new money to public servants. The new money creation decreases the value of money owned by producing workers. We could even remove the tax entirely, and still support the 3 public servants. To be convinced you can look at each…

Interesting, thank you so much!

I didn’t realize that inflation (where money is created and given to government to spend) is exactly the same as taxation.

Re: Building an economy simulator from scratch

#198

Post by dpig_ »

bwanab wrote: post #187
denton-scratch wrote: post #148

In the late 80s, I typed in a BASIC economy simulator I found in some computer magazine. It ran to two or three closely-typed pages (sides). As Chancellor of the Exchequer, you set the tax-rate, interest rate, level of public spending and so on; then you ran a cycle. I can't remember whether a cycle was a month or a year. After about three years, the workers would be on strike and there would be rioting in the street…

I think anybody who's ever tried to model MMT feels the same way. I suspect the underlying theory doesn't have enough substance to actually model.

Jump, meet conclusion.
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