I bet you’d like to understand the way banking works. I would also make a fair guess that you will love to learn the way central interest rates impact large-scale economies of the world. Given the financial roller coaster we have been through in the last few years, the general interest in learning about the inter-workings of our financial sectors has peaked among the public. To gain this knowledge you can read books and online materials or listen to financial podcasts or, if you are like me, play an online game. That’s right, a computer game that teaches you how the financial system works.
Found this little gem of a game online today. Although the game has been in existence for a while now I stumbled on to it through StumbleUpon (weak word play, I know!!) today. The EU (European Union) is in a bit of a mess now, and the central bank, in collaboration with top European universities, has developed a straight forward game with a simple goal – How good is the public when it comes to understanding and managing a country’s economy? . Before you dismiss the game as a cheap eye candy for slackers, know that economists around the world are playing it as we speak.
It’s a very simple game with few options for the user. You assume control of Europe’s central bank and as its head, you control the euro zone’s interest rate. You can increase it or decrease it and the outcome is shown through key indicators like inflation, growth and unemployment rate. As you keep changing the interest rate, these indicators reflect the impact of the change. As the central bank your objective is to maintain a relatively constant inflation rate at 2%. This is actually harder than it seems. Here is the free online game.
You get nice graphs that show how adjusting interest rates can have serious impacts on things like long-term growth and unemployment for a country. They also give definitions and brief explanations for key financial terms and principles so that we know what we are really doing. Once you get a hang of the game, some curve balls are thrown into the equation, like natural disasters sweeping through the continent or a market crash in Asia. Throughout these uncontrollable scenarios, you, as the central bank, must maintain the desired inflation rate.
Give it a try. I found it to be very informative. Also, it’s not often you get a chance to play with Europe’s future !
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