Economic analysis

Are you smarter than a central banker?

An ECB-created iPhone app lets users try their hand at managing the money supply

At first glance Economia, a video game created by the European Central Bank, looks like an ingenious device to help laymen grasp the basics of monetary policy. The iPhone app (which you can also play on your computer) is sleek, and the game–which NPR dubbed “angry bonds”–is actually fun.

The goal is to keep inflation just below two per cent, and the only way to do so is raising or lowering the exchange rate. As a learning tool, it’s very effective: After a couple of tries, you’ll never forget that hiking up rates brings down inflation, and cutting them does the opposite–a concept that goes a long way to helping people understand headlines featuring the likes of ECB Chief Mario Draghi, Bank of Canada Governor Mark Carney or Fed Chairman Ben Bernanke. After a while it gets so easy it’s boring, but then the game starts throwing all kinds of unpredictables at you–like a housing crisis, a stock market meltdown, rising oil prices… It doesn’t get quite as real as the current sovereign debt crisis–and you don’t get to behave as a lender of last resort–but you’ll have your hands full. If there’s even a little bit of nerd in you, you’ll like it.

Still, I can’t help to think that Economia is ultimately a subtle joke the ECB is playing on the rest of us. The game seems designed to reproduce what must be a central banker’s daily frustrations: from money supply forecasts that are reliably unreliable, through clueless advisors volunteering all kinds of contradictory and nonsensical recommendations, to the slimy bureaucrat trying to cozy up to the boss by playing yeoman. I’m starting to sympathize with Draghi.

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