2006-08 Money 101 From Donboy Now that I know what I want to do and what my goals are it is time to go through the process of designing the logic for the softare that I will need to drive the economics of my model railroad. With my location in Middle Earth I need to come up with a money unit.  No problem, I will have crowns (a gold piece) and 1/10 of a crown would be a silver and a penny that would be 1/10 of a silver.  My decimal value will be 1.11 for 1 crown, 1 silver and 1 penny. The idea of the education value of economics quickly comes to the foreground when I start to consider management of the money supply in my simulation.  Do I go with deflationary money (number of things to buy goes up while money supply is fixed), slow inflation (money supply grows through some forms of income) or fast inflation (you can always borrow all you want at low interest rates)? I will have to control the value of money in the simulation because that is how you keep score and it is also very critical in how you spend the money. I think deflationary money while interesting would not be a good choice because it could lead to people holding their money and not running trains while they wait for the value of money to go up.  A group standing around looking at a computer that holds the money values does not seem very educational or very much fun. Slow inflation would make sure there was some action because you would not be able to “win” by holding money and not investing it.  The amount of money that could be borrowed would be limited because you would have to wait for someone to earn the money and put it in the bank before it could be borrowed.  In this case the game would take longer because good “investments” would have to wait until the money was available to invest.  Asset prices would rise but at a slow pace. Fast inflation would have everyone in a rush to get out of money and into investments and would be a lot like our current money environment which would increase the education value.  Assets would go up in value as their future income was guessed at and because the bank would loan everyone money who wanted it lack of money would never cause growth to slow or asset prices to go down.  Asset prices would only go down when someone finds out what they paid for the asset was not supported by income. I think the most entertainment would be created if the money would change from slow inflation to fast inflation during the simulation in a random way.  Looking at the items that would require money you have the score (your net worth), fuel costs, equipment costs, taxes, plant costs and income.  With inflation and demand adjusting the relationships the money environment would have a realistic flux to it where all things would be motion at the same time.  Looking at the program logic that would be needed to do this it seems like it would not be that bad.  In general fixed assets would go up along with variable costs (fuel and materials) and the trend of income would also be up but on any given day the relationships might change.  You might have to deal things like variable costs going up faster than income. I think adding player transactions is a requirement to add interest to the simulation.  Each player will have a computer bank account and during a session they can enter transfer transactions to move money from their account to an other players account or in other words write a check.  Title of fixed assets could also be transfered to other players. I added an Economics section to links for those who might want to learn more about money and economics.