A unique way to model a national economy

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EMJ
Posts: 351
Joined: Sat Nov 20, 2010 6:37 pm

A unique way to model a national economy

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"New Zealand engineer Bill Phillips found a unique way to model a national economy in 1949: He used water. Working in his garage, he assembled a conglomeration of tanks, pipes, sluices, and valves into MONIAC, a 7-foot hydraulic computer that modeled the economy of the United Kingdom. Colored water, representing money, is pumped from a bottom reservoir to the top, where it’s distributed among taxes, consumer expenditure, and investment, then finds its way downward through the economy. The user can set “functions” that regulate the effect of national income on tax revenue, government spending on consumption, domestic spending on imports or exports, the interest rate on investment, and the exchange rate on exports and imports."

http://www.futilitycloset.com/2014/12/03/liquid-assets/

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