Alerts
What the game points out to the player about their own economy, and when. Alerts read thresholds on the country's figures, without changing anything in the simulation.
In plain words
On the 1st of each month, the game reads the figures of the player's country and warns the player in five cases. It flags a recession as soon as it begins, that is, when output falls for a second quarter in a row, as well as inflation that exceeds the central bank's target by more than one and a half points. Unemployment also triggers an alert if it has risen by more than one point in a year, the risk of a default within the year if it exceeds 5%, and the credibility of the central bank if it falls below 0.6. An alert is given at the moment the threshold is crossed, not every month it stays crossed. It comes back only after six months in a row on the right side of the threshold.
In the game
An alert stops the clock and is shown like the world news, with the figure that crossed the threshold and the threshold itself, and it then stays in the news log. In the first month of the game, any alert whose threshold is already crossed is given straight away, so the player learns from the outset what is going wrong in the country they inherit. Non-player countries have no alerts.
The basics
The game computes every day, but a player cannot watch all their figures at once. Alerts tell the player when they have a reason to act.
As statistical offices define it, a recession is two quarters in a row in which output falls. The game therefore computes the average output of each calendar quarter and checks, in the third month of each quarter, whether it has fallen twice in a row.
The other thresholds apply to figures explained elsewhere. Inflation is the one the dashboard publishes (E5), compared with the target of the country's central bank, and the default risk is the one the markets estimate (E16). Credibility measures, from 0 to 1, the confidence that the central bank inspires (E17).
The thresholds
In plain words
Each alert has its threshold, the same in every country. The studio has kept this common threshold knowing that inflation one and a half points above the target then triggers an alert in Buenos Aires, where such inflation is the norm, just as it does in Paris. Once given, the alert is disarmed until the figure has spent six months in a row on the right side of its threshold. The studio set this delay because, without it, inflation that hovers around its threshold would give an alert every month.
The central bank aims for 2% inflation, which puts the alert threshold at 3.5%. Inflation rises to 4.5% for three months, then falls back to 2.5%, and the game gives an alert only in the first of these three months. If inflation rises again four months later, the game says nothing. If it rises again eight months later, the game gives a new alert.
In the rule:
| Symbol | What it is | Value |
|---|---|---|
| \(m\) | the gap from the target beyond which inflation triggers an alert | 1.5 points |
| \(u\) | the rise in unemployment over one year beyond which it triggers an alert | 1 point |
| \(r\) | the risk of default within the year beyond which it triggers an alert | 5% |
| \(c\) | the credibility below which it triggers an alert | 0.6 |
| \(n\) | the months in a row on the right side of the threshold before an alert can come back | 6 months |
Show the full rule and its sourcesThe thresholds, each parameter and where it comes from, and what the rule leaves out.
What the game points out to the player about their own economy: the reasons to act, when they arise. None of this changes the simulation. These are thresholds read from its figures, once a month, and crossing one becomes a news item for the player, which stops the clock and is shown like the others. Non-player countries have none.
The thresholds
On the 1st of each month, on the day's figures for the player's country:
| Alert | It is given when | What it says |
|---|---|---|
| recession | real output, as a quarterly average, falls for a second quarter in a row; it is read in the third month of each calendar quarter | the change over the last quarter, % |
| inflation | inflation over one year exceeds the central bank's target by more than m points | inflation and the bound, % |
| unemployment | unemployment exceeds that of the same month of the previous year by more than u points | the rise and the threshold, points |
| default risk | the probability of a default within the year (E16) exceeds r | the probability and the bound, % |
| credibility | the central bank's credibility (E17) falls below c | credibility and the bound |
An alert is given when the threshold is crossed, not every month it stays crossed. It comes back only after n months in a row on the right side of the threshold. In the first month of a game, an alert whose threshold is already crossed is given straight away, so the player learns the state of the country they inherit.
| Parameter | Value | Status | Source |
|---|---|---|---|
alert_inflation_margin m | 1.5 points | the threshold set in advance to count the player's reasons to act | |
alert_unemployment_rise u | 1 point over one year | same | |
alert_default_risk r | 5% per year | same | |
alert_credibility c | 0.6 | same | |
alert_rearm_months n | 6 months | without a delay, inflation that hovers around its bound would give an alert every month; a game design choice |
Why. The player must have something to react to at least once a year. In France, 58% of years bring a reason to act outside elections. Without the alerts, only 23% brought a new one. The thresholds are the ones used to count these reasons to act.
What it simplifies. The thresholds are the same for all countries. Inflation one and a half points above the target triggers an alert in Paris as in Buenos Aires, where it is the rule. The recession is that of statistical offices, two quarters of decline, not the dating of the NBER. No alert announces an improvement.