Real flows endowment y, consumption c, sales to gov't sg
y (endowment) c (consumption) sg (sales to gov't)
Private wealth V begin-of-period tax credits held
How the simulator works
This game is a playable translation of “Optimization in a Neochartalist Model of the Determination of the Price Level” (Levey, 2026). You run the fiscal authority of a newly-formed currency area. Your tools are the prices the government pays, the taxes it levies, a limit on its purchases, and the interest rate on its debt.
The core mechanism
Taxes create currency demand. The representative household must obtain government money to pay its tax T. The only place that money can come from, net, is the government.
The government sets the price level. If households must sell to the government to pay taxes, they must accept pg. Arbitrage then pulls private prices pf toward pg.
Symmetric leaks break the anchor. If household wealth already exceeds future taxes, prices drift upward. If a tight spending limit gl blocks sales to the government, prices can drift downward.
What to watch
When pf = pg the monetary anchor is holding.
When pf > pg there is a wealth overhang or a binding resource limit — tax more or raise pg to re-anchor.
When pf < pg the spending limit is choking off tax-payment channels — raise gl or lower T.
Winning
Each scenario has objectives. In general: finish with private prices anchored to government prices, enough public works procured to meet the district's mission, and no fiscal collapse along the way.
Simplifying assumptions mirror the paper: one consumption good, representative agent, perfect foresight, nominal lump-sum tax, fiat money only.