Paul Krugman would have been a good game designer
Back in the 1990s, I enjoyed programming some games for myself and friends to play. Once the game existed, and we’d played it a few times, we’d start asking, “How would the game change if we changed X?”
Via Brad Delong, I stumble upon this oddly simple economic model from Paul Krugman:
But if the money supply is constant, M’ = M; also, C = L. Given the utility function, consumers will spend a share 1-s of their initial wealth on goods, s on money. So we can represent equilibrium either by the condition that demand for goods equal supply,
L = (1-s)(L + M/P)
or by the condition that demand for money equal supply,
M/P = s(L + M/P).
Both ways of looking at it imply the price-level equation
P = [(1-s)/s)](M/L)
so the price level is proportional to the money supply.
If he’d flunked out of economics school, he could have done a lot to improve SimCity.