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Run the economy: a macroeconomics simulator

Most macroeconomics is learned from static graphs. The simulator lets you pull the levers instead. You run the central bank and the treasury at once, and the economy answers back.

What you control

• The interest rate, the central bank's lever. What matters is the real rate: the nominal rate minus expected inflation.
• Government spending, the treasury's lever. More spending pushes demand up; less pulls it back.

You then watch GDP growth, inflation, unemployment and public approval, while news events hit the economy and force you to react.

What it teaches

• Real rates, not nominal ones. A positive real rate acts as a brake on spending. A negative real rate is a party, and then a hangover.
• Expectations matter. Once high inflation is entrenched in people's expectations, beating it can take interest rates that look extreme. That's the Volcker lesson.
• Monetary and fiscal policy interact. Loosening both at once overheats the economy; tightening both risks a slump.
• The short-run trade-off between inflation and unemployment, and why policymakers rarely get both low at the same time.
• Lags. Policy doesn't work instantly, so reacting to today's numbers can overshoot.

How to play well

Start by watching with your hands off. Change one lever at a time so you can see what it did. Keep an eye on expected inflation, not just current inflation, and remember that approval ratings fall when the economy hurts, even if the medicine is correct.

A note on realism

It is a simplified short-run model. Real economies add lags, debt, politics and paperwork, so treat it as a flight simulator rather than a forecast. The point is to build intuition for how the pieces move together.

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