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

  • 815 points
  • 19 days ago

  • @BenoitEssiambre
  • Created a post

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


@howmayiannoyyou 19 days

Replying to @BenoitEssiambre 🎙

Global economy. It's not one village.

The US Fed has to ensure liquidity for all global USD users, to include USD derivatives, USD denominated loans and USD denominated trade instruments; and it has to do that at the same time trillions can sit nearly idle (not contributing to transactional velocity) on balance sheets worldwide.

Impressive, no doubt and good on you though!

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@MrYellowP 19 days

What this game misses is the fact that deflation is fine as long as there's innovation. Making a better apple allows for asking for a higher price.

Inflation, on the other hand, forces to make cheaper apples people can still afford.

Your game is only half done.

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@jsjohnst 19 days

442,329 by controlling interest to keep inflation as close to 1.5% as I could (which isn’t always easy).

442,306 by just immediately setting interest at -0.5% and leaving it there entire time. Inflation varied widely, but seemed to correct itself around 12% and -4% and spent a lot of time near 0%.

Can anyone explain an economic theory why that happened, or is the game not reflective of reality?

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@hndamien 18 days

This completely neglects the supply side of money and only views the demand side. There are two levers in a central bank, in reality there should be 0.

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@nazka 18 days

For people looking for an in depth simulation game you should try Capitalism Lab [1]. Just to warn you the graphics looks super old (and personally I like it) but like all games like that the best is not in the graphics but what’s behind the scene. And oh boy what a simulation! You have everything you can imagine a real economic simulation needs. From interest rates to wages to import and export to limited natural ressources and their implications to limited money supply and interest rates depending how your companies performs, to banking with the DLC and the list goes on…

The goal is to create a company and go as big as you can if it’s what you want. Almost all major industries are there. You can be selling beds to being the next Apple. There is even a DLC for software company (that is also a must have because it brings the talents feature). You can do vertical market dominance if you wish or go horizontal. And learn their own challenges and their ins and outs. And you can even do trading and do some M&A!

If you ever buy it get all the DLC they are all worth it. They add even more realism and tools to the game. And if you really don’t like it I think they have a money back guarantee.

As a tip to truly learn stuff play it in “hard mode”. Even if you fail at first it’s fine because you will learn from a realistic perspective and gain a lot of insight and knowledge each time. In the game options turn everything to realistic, with average in import, good quality for import, max out the total number of cities and companies. You should end up at 340-380% in difficulty. And then build whatever you want! You don’t have to know it all or learn it all. But since it’s that realistic you can go with your gut instinct and it will probably be right. From the impact of inflation on your business, to how marketing or real estate work. Just dive in and have fun!

I’m a huge fan of this game. I learned so many things with it. From real estate to supply chain that I was not that familiar with. It’s so good.

Oh did I mention it’s still in active development? :)

[1] https://www.capitalismlab.com

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@andytratt 19 days

is there a leaderboard? 441684

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@swfsql 19 days

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: Their Cause and Cure". It had explanation for phenomenas such as why the food sector is not as impacted, during the bust, as some other highly technological, heavy industry sector.

For a more visual concepts, I find Mike Maloney's Hidden Secrets of Money pretty good, although it's not as rigorous as the previous sources.

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@fiatjaf 18 days

Why can't we just quit, leave the quantity of money static and and let the market decide the rates?

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@im3w1l 19 days

I didnt like how some trees were barren so I tried first lowering interest rates to zero and that didnt work so then I raised to 10 causing all business to close. It took them like a decade to even start recovering.

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@Aeolun 19 days

I feel like any interest rate higher than -0.5% will automatically lose you all your farms at some point in time.

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@dzink 18 days

The model is missing the external factors if currency price and foreign import prices of goods and demand for your own currency. CB decisions have been greatly cushioned by the fact that the US currency is reserve currency of the world at this time and instability elsewhere makes it remain such. If apple prices go up, demand can go abroad and that changes the dynamic for when you change interest rates (can farms support themselves when the price of applies is pushed down by imports and your inflation escapes). Thus recovery would look different in an open border world vs closed economy. Then it also compounds for countries such as the EU members where you have some with high exports and others with high debt that share the same currency and pushing one direction always hurts someone.

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Seems to me like unemployment is stuck at 10%.

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@sushiburps 19 days

No idea what a good score is, got 431160 on my first go. My only rule was attempting to keep inflation at 1%, if it went over I raised, if it went under I lowered.

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@neilwilson 18 days

Nicely done.

I'm looking forward to going through your code and design. It's a great addition to the set of games that help us get our head around these things.

Simple models have existed for a while that show the horizontal circuit can be stable.

Here's my correction of Steve Keen's initial horizontal circuit from 2010[0]

What you'll find is that the unemployment buffer stock that is disciplining inflation, not the interest rate. You can see this by setting the interest rate to zero permanently.

You don't need wonks in central banks - just very effective automatic stabilisers based around the labour buffer stock.

To that end if you hire the unemployed at a fixed wage paid by the central bank at an orchard that is slightly less productive at producing apples and sells its output at a fixed markup price you'll find that you get more overall output because the less productive buffer stock ends up being smaller than a completely unproductive buffer stock for the same price anchoring effect.

I explored that in my baseline economy model, a derivative of a mainstream model, which is still online.[1]. Code on Github [2].

What I also found is that when you introduce 'shops' rather than the mythical central auctioneer market, and people just go to the current cheapest shop near them things broke big time. [3]

Tap me up on Discord or Github if any of this is of interest.

[0]: https://www.debtdeflation.com/blogs/2012/01/11/guest-post-a-... [1]: https://new-wayland.com/blog/how-the-job-guarantee-fixes-mai... [2]: https://github.com/newwayland/baseline-economy [3]: https://new-wayland.com/blog/revealed-the-simple-change-that...

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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

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@roomey 19 days

What is a good score tho, to get some idea of if you did OK or not? A few people mentioned 400-450k, is that average?

Where's the dam leader board ;)

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@mc32 19 days

Kind of tangential but what we came of Yanis Varoufakis’s study of game world economics?

There was a lot of excitement about it being real and not just a model and real and not being statistical.

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@lotrjohn 19 days

That site has an awesome text/font. Reminds me of a CRT screen with scan lines! Mind sharing?

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@Bost 18 days

Must be written in COBOL otherwise it's not realistic :)

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@3np 18 days

Cool concept!

Feedback:

The log should have scrollback and/or be expandable. When a lot of things happen in succession it's impossible to keep up.

Pausing, and maybe stepping months, would be nice as well.

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@ThalesX 19 days

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:

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@TedShiller 18 days

How can I print infinite money to fund pointless social programs with this app?

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@Giorgi 18 days

Played with 0.00% some orchids went bankrupt (why is that a bad thing?) still collected 400000+

Central Bank is pretty much useless.

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@praestigiare 18 days

The problem with this is that economic models are (to be kind) incomplete, so playing a game like this is essentially "how to make an economy work if economies worked how we think they work."

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@SubiculumCode 19 days

Cool stuff. It would be interesting to have a simulation with three levers: interest rate, taxes, fiscal spending.

But in the end, the problems with most such models is that the outcome ends up being determined by the assumptions built into the model.

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@formerkrogemp 19 days

Very cool! I work in a banking adjacent industry, and this is mildly entertaining. Do you have any plans to create an accounting firm simulator for more entertaining games?

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@tikiman163 18 days

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.

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@01100011 19 days

Where's the button that lets me buy stocks with insider information before I adjust the rate?

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@kvathupo 18 days

On the financial end of the spectrum, there's "american dream" [1] by Stephen Lavelle [2], an enigmatic fellow who releases almost all his games as open-source. Putting you in the shoes of a trader, the game is a strong contender in the argument for treating video games as art with its subtle cultural commentary (even if I don't agree with some of it ;p).

[1] - https://www.increpare.com/game/american-dream.html

[2] - https://www.theguardian.com/technology/2015/apr/02/increpare...

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@chimney 18 days

I fought inflation in SimCB and my economy produced 446243

The best way I can conceptualize it is running counter-cyclical monetary policy, essentially tweaking supply via cost of capital for orchards.

Rates fluctuated between 4-7%. I tried to keep inflation and menu prices between 1-2% consistently.

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@joshxyz 19 days

May I ask how this differs from Chair The Fed?

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@gs17 18 days

I pretty much tracked my rate to "Menu costs" (within a certain range) halfway through and got 443279. Didn't know what they were, but it seemed to go well.

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@mhh__ 18 days

> A lot of real economic models involve advanced math and differential equations. The goal here was to keep this type of mumbo jumbo to a minimum to make it more easily understandable for those who like to right click view source (and more importantly to make it less work for me to build).

> mumbo jumbo

It's very efficient mumbo-jumbo, though. I've spent years learning maths, but not economics, so just show me the equations!

In fact I'm going to have a heated Lamport Moment and say that Math >>>>>> Code in matters such as this.

I have a very short attention span and this page just looks like a blur to me. Evidence: It took me 2 skim-throughs to even spot the phrase I quote. Maybe I'm dyslexic.

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@sfblah 18 days

It would be funny if, in the simulation, you could cause a guy to start sending people to Mars by putting rates at close to 0% for 10 years.

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@jyu 19 days

FYI the Fed used to have an educational game called "Chair the Fed". They took it down in 2021. I'll leave the meaning of that action as an exercise for the reader.

https://www.frbsf.org/education/teacher-resources/chair-fede...

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@FredPret 18 days

Current economics is a primitive form of the future psychohistory. Can't wait!

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@mrcomplicated 18 days

So I've put interest rate to 0.0% all the way until the end and GDP was 442599

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@yyy888sss 19 days

In reality of course central plannners 'pulling levers' and setting prices never works. The interest rate is one of the most important prices of them all, which is why having the government meddle with it has proven so destructive.

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@akudha 18 days

I wonder if it is possible to teach the average Joe about the functions of the government, world economy etc through games. With real data. This might also be a good way to learn the policy positions of various politicians, think tanks etc.

For example - let’s say the player is the chief of UNICEF. Or World Bank. Or U.N. Would be fun to play such a game, with real policies and real data.

I know I am not alone in finding economic topics dry and boring. But I might play games, than read a book on dry topics.

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@zhte415 18 days

Does it have a Taylor Rule? And a Reverse Taylor Rule?

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@Komodai 19 days

Pretty cool and interesting, good work :)

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@yreg 19 days

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?

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@roansh 18 days

Benoit, thank you for this!

"What has government done to our money" is a nice read to understand money, inflation, central banks, exchange rates between currencies, etc.

https://mises.org/library/what-has-government-done-our-money

It opens with describing what money is from the first principles.

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@tmhrtly 18 days

I have approx. 0 understanding of how interest rates, inflation rates, etc. all intersect. My economics knowledge is 0. Is there a good fun accessible book to get started?

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@emehex 19 days

Unemployment never budged from 10% for me throughout the entire simulation?

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@Zenst 18 days

I managed to make everybody unemployed in 120 weeks, which may explain why most goverments globally are elected for 5 year terms at a go.

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I fought inflation in SimCB and my economy produced 258789

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@Androider 19 days

In my first game, I carefully managed the interest rate to keep inflation around 2%: Your economy produced 431540 apples.

Next game, I set the interest rate to -0.50% right away and left it there: Your economy produced 442411 apples. Inflation was 1.5% in the end.

Doesn't seem to matter too much what you do. Maybe in real life too.

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> When the central bank lends money at positive interest rates, the interest profits or “seigniorage” are distributed to everyone like dividends (they would in the real world go to the government which would spend or distribute them). If seigniorage was not distributed, at the end of each loan, the money supply would shrink a little bit as the central bank would be gradually absorbing money from the economy as interest. Seigniorage serves to neutralize this.

Could you elaborate on this? Is this really what happens in the real world - interest on central bank loans going to the government? I was very much under the impression that this interest goes to the central bank (and is thus destroyed), and the fact that this would appear to contract the money supply seemed like it just increased the need for the central bank to increase the money supply in other ways. To be honest, I am still not clear on how the money supply is increased permanently by a central bank - all textbook examples of money supply changes appear to only do so temporarily.

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@hitovst 19 days

If you can own the bank in the freest/richest society, you can inflate away enough wealth to bribe it into enabling government schools, criminal legal tender "laws", becoming the world reserve fiat global enslavement system, and then inflate away 99.9999% of all the wealth of humanity in perpetuity... that is if you're willing to play as anti-human.

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@mmastrac 19 days

This game needs a "gold standard" mode to see what happens to the toy economy with no central bank!

EDIT: It would also be nice if the game paused around major events to give you more time to think & adjust. I found that the economy went off the rails if you don't react right away.

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@fallingfrog 19 days

Hmm, it would be interesting to add capital investment and rate of profit on capital.

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@leononame 18 days

I think, as of writing, I have a new high score: 444823.

I achieved this by trying to keep interest rates as high as possible. I started out with 5% which gradually increased to 7%. During the prosperity, I was mostly fixed at 13% and then lowered to 6% just before the drought. I kept the interest rate wiggling between 6% and 8% for the rest of the game (though I probably could've gone much higher until the people spend 10% less).

Keeping the interest high is key, since it's (afaik) the only way to generate new money. Additionally, income from interest will be spread out between the population, so going for high wages is not absolutely necessary, since the investment income from the orchard will also reflect in the population's income.

edit: Just going to piggy-back on this comment. Are there any interesting, recent economic simulation games out there? Especially macroeconomics are fascinating and would make for a challenging game.

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I had interest rates at 3%, and then suddenly orchards bankrupted and I had deflation of ~90%.

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@Scotrix 18 days

441k and trying to keep interest rate at the same level amount as inflation seemed to do the trick for me. Did run it 3 times and basically got the same results.

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   *** GAME END ***
   Your economy produced: 439918 apples. 
Deflation is easily combated by raising interest above the next expected deflation level so that saving money becomes more lucrative than spending it. Inflation is combated by lowering interest as soon as it rises above the interest level. I never went below 0.50% interest, never above 5.50%. This is easy, maybe I should apply for the job of central banker.

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@del_operator 18 days

441877

Mostly left it at 0% except for two inflation events where it went over 7%.

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@ginko 18 days

Would be interesting to see what would happen if you set the interest rate below -0.5%.

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@jbay808 19 days

Very nice. This reminds me of the game Chair the Fed, published by the Federal Reserve Bank of San Francisco:

https://www.frbsf.org/education/teacher-resources/chair-fede...

Unfortunately, they took it down about a year ago.

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@6510 18 days

It needs a top 100 and fancy charts so that one can review how players did it.

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@enviclash 18 days

This is a very nice toy model, perhaps the only surprise came while reading "profits are distributed equally as dividends to everyone". I was wondering if this turns the simulation into a combination of capitalism and communism? Not sure how to find a simple alternative, any ideas anyone? Thanks!

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@MrYellowP 19 days

I do literally nothing and the amount of produced apples increases all by itself. There is no need to do anything at all.

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@whimsicalism 19 days

I found it impossible to lower unemployment from 10%?

e: I see

> One of the 10 orchards is always in its preparation phase which means it doesn't employ anyone so the natural unemployment rate is one out of ten or 10%

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@forgotmypw17 19 days

One minor suggestion: Make the Up and Down div "buttons" return false when clicked, so that their text is not highlighted when they're clicked.

Also, if you make them <button> elements instead of <div>, your page will be more accessible to users who depend on their user-agent to know what type of controls they are.

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@reilly3000 18 days

After a rather dismal first couple of runs I read the blog post for some hints. The best I found was to try to raise rates during the good times so there is wiggle room during downturns. I was able to get 443,904 by raising to over 10% during the initial prosperity period and was able to cut rates in half as soon as there was a crash. Ultimately I stabilized at around 3.5%. As of the time of this post I think that is the highest or close to highest score, only slightly higher than those that did a constant -0.5%.

I’ve always been apprehensive of how low interest rates dropped around 9/11 and nobody had the political courage to raise them after that, leaving little room for leverage. What I have learned from racing games is that in order to win, it’s not all about holding down the gas pedal the hardest. Its about keeping on the track first, which requires lower speeds to navigate complexity, and only using max speed in straightaways.

Or to quote the eminent Charlie Sheen, right after his infamous ’banging 7 gram rocks’ he said, “I only have one speed, I only have one gear: GO.” History tells how well that worked out.

That may work on a straightaway, but in this world, there’s people and there’s pandemics and wars and politics. Had rates been at a higher level they could have been slashed at the start of the pandemic, but there was no room to drop at that point.

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@koshergweilo 19 days

Cool game, but when shit hits the fan and production falls, everything seems to explode instantly, within a few turns. It would be nice to add some time controls so I can actually think about what to do.

Edit: while I'm asking for new features, two buttons with a step of .5 isn't enough to handle these deflationary spirals. Perhaps turn it into a slider with the step buttons.

Also some historical charts to show at the end of the game would be cool

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@retube 18 days

This is really interesting. but the roles of commercial banks and central banks are very different (intermediating credit and can go bust vs controlling money supply and can't go bust[1]), and to exclude the former from your model means you are missing a key component of any economy.

[1] Caveats apply!

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@pwillia7 18 days

443018

Tried to stay around 3.5% inflation but furiously fought deflation and used the sliders a lot to pendulum around especially in crises

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@no_mushrooms 18 days

And to think that the central bank of central banks is a private company... makes us think right? https://www.bis.org

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@mrighele 18 days

I tried a number of different approaches, like

* Target 2% inflation

* Target 4% inflation

* Target positive but little real interest rates

* Keep interests at -0.5% the whole time.

The result didn't change much (more or less between 430k and 440k) with the best being the latter one: it seems that QE is not as bad as they paint it :-P

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