Economy Game Anyone?

Today, I was given a chance to manage the Australian economy. Well, not really but it is for real. Haha. OK, let me explain, in my economics tutorial today we have to play this simulation of the Australian economy. To start with, we (My partner, Martha and I) are given data on the 1987 Australian economy. And in this simulation, we only have the power to manage four variables namely, government spending, income tax, sales tax and money supply. We were given 10 years to manage the economy. It turns out that managing an economy is a LOT harder in practical because my knowledge in theory is not helpful at all. OK, in macroeconomics, we always have to aim for a couple of goals which are low unemployment and inflation, favourable balance of payment, positive economic growth and favourable exchange rates. But, in this simulation we have to aim for low unemployment, inflation and interest rate.

In 1987, the unemployment level was 6.3%, rate of inflation was 8.0% and interest rate was at 8.5%. Although we have to play for 10 years, due to time constraint and my inadequate skills, we only managed to play it for 6 years. We did face a very hard time in managing the economy and made a lot of mistakes throughout the 6 years. But at the end, we managed to lower the unemployment level to 5.7% and rate of inflation to 8.1%. But the rate of interest was pushed up to 11.5%. I admit, we did not do a great job, but hey, it is a good start!

Although our job was not that impressive, we did maintain a balanced budget for three consecutive years. Haha. And THAT is impressive enough! So, to all Malaysians, in 30 years’ time, if you see Adam Abdullah put his name forward as Prime Minister, please DON’T vote for him. Haha. Unless you like the Malaysian economy to go into a deep recession, then vote for him anyway. Ciao.

P.S. I held no responsibility on any inaccuracy of the 1987 Australian economy data. If it is wrong, blame the person who made the simulation. Not me.