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A lot of people think they’d do a better job managing a financial crisis than the world’s finance ministers and central bankers.
Well, you now have a small-scale chance of making your case.
Anthony J. Evans, an associate professor of economics at ESCP Europe Business School, published a paper that includes a role-playing game version of the 2008 financial crisis, using the example of the United Kingdom.
You can try it out here.
In the game, you have to replace the governor of the Bank of England, Mervyn King, because he’s been concussed while playing cricket. The decisions you make mean turning to different pages to see what the consequences are. A lot of the avenues you can take end in failure.
My first storyline came to a very speedy end because I accidentally circumvented EU law by encouraging a rapid sale of Northern Rock.
I went back and had another go, and managed this time to successfully abandon the Bank’s official inflation target and bring in nominal GDP targeting, which caused a minor spike in inflation and a fairly quick return to growth.
There are a handful of different ways to end the game, by pursuing a handful of different measures.
But Evans is also trying to make a serious point about policy-making.
Rather than conduct a historical study of what plausible alternatives faced the actual decision maker, I wanted to illustrate how alternative schools of thought might have approached those situations, and provide some scenarios about how they may have fared. It has extended existing scenario analysis but also makes the case for economists to take counterfactual reasoning more seriously. Perhaps if we did so, policy making would be improved.
Hopefully we’ll see RPGs on mainstream economics courses soon.