Simulating economic activity

Years back Snowdrift nudged me to start thinking about economics more seriously. I now know next to nothing, rather than just nothing. Does anyone have suggestions for simulating economic activity on various scales? Like you can adjust inflation, set universal basic income and see what happens, or have little economic actors in a simulation and see if the system fails. Or a crowdmatching system…

Ideally FLO, but proprietary stuff is worth considering. Programming is an option, but ideally not from scratch!

Incidentally, Planet Money just did a focus on Bill Philips who made a water-based physical thing like you’re describing in the 1940s and ended up convincing the whole field of economics about a bunch of patterns, only to more recently have people realize they still didn’t really get it… How the Phillips Curve shaped macroeconomics : Planet Money : NPR

I’m curious if anyone else brings up some simulations, but we need to be very skeptical of them. Economic modeling is pathetic compared to stuff like climate modeling. Economic measures are not even very good. The whole field of economics is just not up to the standards of many other fields. Anecdote: a friend of mine (who is also supportive of Snowdrift incidentally) got all the way to getting a MS in economics before concluding that the whole field is so misguided, he feels like most of what he learned was a waste of time. He ended up thinking that Modern Monetary Theory (MMT) was closer to accurate (though it is often unfairly misrepresented). I asked him for insights and about what I was missing, but he mostly just said he today agrees with what I thought about economics all along… Overall, economics on a large scale just has not been very skilled at predicting things accurately. It tends to be more ideology wrapped in mathy equations (maybe that’s why ideas from Marx tend to be segregated and ignored rather than included and adapted — leaving economists to be Marxist or not; contrast with biology where there’s no real issue of some biologists being Darwinist vs non-Darwinist or whatever nonsense). Note this is all my snarky kinda attitude mood type of reply, not representing others per se and not the carefully tactful approach I might take in another context…

Now that is smaller and easier to simulate… I’m not now finding the link, but we had such a thing when we were discussing the updated crowdmatching approach… @Salt ? Or someone else? Where do we find that thing @tannerd made?

2 Appreciations

I appreciate the candor :laughing: This is mostly me finding graphs boring, but still curious about how someone pulling the inflation lever (for example) has real impact on our everyday lives. I’m trying to balance skepticism with the fact that these ideas are influential. That NPR episode is exactly the kind of thing I’m interested in, thanks!

A simulation “game” called Ğeconomicus (originally called « jeu de la corbeille ») was created a few years back. It has been played times and times again to compare different ways to exchange: barter, mutual credit, debt money and libre currency (money created solely via a Universal Dividend). The way it’s played most of the times is 3h of debt money and 3h of libre currency. The main goal of the game is to compare the way most of people create money (via debt) with the way a few people create money (via a universal dividend). The results can be computed via a spreadsheet editor, or via an ad-hoc software called Ğeconomicus helper. The conclusions are more-or-less always the same: when using a libre currency, more value is created and the difference in how much value each player gets is lesser, when compared to using debt money.

One can also use a game of Monopoly to see what differences the way money is created makes for players. See « Monopoly Relativiste » (auto-translation to English closed captions seems to work kinda OK ; there are some misinterpretations where was is subtitled is the contrary to what is said).

Someone I now (who happens to be involved in the libre currency) has also created a fork of Nicky Case’s Loopy dedicated to simulating economy, but I can’t say much more because I have not dived in too deep.

You might also want to have a look at the “economics” section of Nicky Case’s Explorable Explainations.

And, yeah, economics is far from being a science. Just like it’s hard to imagine doing physics with anything else than International System of Units, it’s hard to imagine anyone come to any form of valid hypothesis regarding economy when measuring things with a unit that has no invariant such as the dollar or the Euro. “Economists” can keep on blattering some more centuries with real versus nominal value, and they will keep failing to predict accurately the next crisis.

2 Appreciations