The Swiss National Bank has discovered a novel way of explaining how it works. One of its economic advisers has come up with a computer game that lets players take over the reins of the economy.This content was published on May 4, 2001 - 11:38
Mopos is a game in which users can assume the role of a central bank and simulate monetary policy in a simple virtual economy.
The programme is the brainchild of National Bank economic adviser, Yvan Lengwiler, who spent the best part of a year developing it.
His idea was to create a tool to explain the workings of the National Bank to his friends and neighbours who had no real idea of the Bank's function.
The aim of the game is to maintain the stability of the economy. There are numerous possibilities to use the programme since model specifications can be changed and set any way the user wishes.
"What you have to try to do is avoid large fluctuations and you do that by moving around an interest rate. You can observe the effects that this has on the economy, which are sometimes surprising," Lengwiler told swissinfo.
"The economy is always hit by different shocks which you cannot see and it's your objective to react to them in the best possible way," he added.
There are plenty of pitfalls in a game in which there is no real finish. You can end up in high inflation or just the opposite, a strong deflation.
"You have to be cautious but being too cautious can be dangerous," Lengwiler warns budding central bank governors. "You need to find the right balance between cautious behaviour and bold moves."
Players are also allowed to pass control of monetary policy to an "autopilot"- a small built-in expert who will set interest rates according to the prevailing economic situation.
"By using this automatic mechanism, you can observe the evolution of the most important macroeconomic variables without having to make any decisions," says Lengwiler.
The Swiss National Bank emphasises that Mopos is a game and that the model economy at its heart is not based on any particular country.
"For that reason it should also be clear that the Swiss National Bank does not use this model in its monetary policy decision-making or in its inflation forecasting," the Bank warns in the instructions.
The game can be played in two different modes - standard and advance mode. In the more advanced environment, players can view facts and figures on the macroeconomic situation in more detail, adjust parameter values and set the characteristics of the shocks.
The software can be downloaded from the Internet site of the Swiss National Bank free of charge.
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