Central Bank Simulation
Central Bank Simulation
Define monetary policy. Adjust interest rates, control inflation, and maintain market confidence. Every decision has cascading effects.
β³ SoonMonetary Policy Dilemmas
Central banking = managing competing objectives simultaneously.
Rate Hike vs Growth
Raise rates and inflation falls, but growth slows and unemployment rises.
Inflation vs Unemployment
The Phillips curve: push inflation down and unemployment rises; push unemployment down and inflation rises.
Central Bank Independence vs Political Pressure
Government wants low rates. Stay independent for the right call, but political tension increases.
Exchange Rate vs Inflation
Raise rates to defend the currency but compress the domestic economy. Let it float and imported inflation follows.
Short-term Relief vs Long-term Stability
Print money to ease markets now, but inflation seeds are planted for the future.
Tracked Indicators
- Inflation
- Unemployment
- Growth
- Exchange Rate
- Market Confidence
- Interest Rate
- FX Reserves
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