Glossary

The words of the game, explained without jargon, and where to find them.

Growth and output

Potential GDP: What the country can produce without overheating, a level that grows every day at the fixed pace of the country's potential growth. See E2
Output gap output_gap: By how much the economy produces above its potential, when it overheats, or below it, as a percentage of that potential. Almost everything else in the game depends on it, starting with inflation and unemployment. See E1
Real GDP: What the economy really produces, that is, potential GDP raised or lowered by the output gap. Its growth over twelve months is the growth the dashboard publishes. See Variables
Fiscal impulse: The change in the budget compared with the budget of the past year. It is this change, and not the level of spending, that drives activity, and its effect dies out after a few years even if the measure stays in place. See E1
Fiscal multiplier: What one point of GDP of extra spending, or of lower taxes, adds on average to output in the first year. In an advanced country, it is 0.75 for spending but only 0.25 for taxes. See E1
Shock: Each of the two random draws made every day in every country, one on demand and the other on prices. Because part of the demand shock is the same for all countries, economies move a little together. See E13
World event: A big blow that no country causes, such as a pandemic, an El Niño episode, a food price spike or a natural disaster. Drawn at random as often as it happens in reality, it hits activity, prices and sometimes potential GDP. See E18
Exposure: A country's share in the draw of a local disaster. For earthquakes, cyclones and droughts, it is estimated from the share of the country's land that these hazards have reached in the past, whereas for floods and epidemics, all countries are equally exposed. See E18
Game settings: The choices made when a game is created to switch an optional mechanism on or off or to scale it, such as the shocks, the events, the elections, the parties, the defaults or the departures of non-player governments. None of them, however, changes a value of the economy. See Introduction

Inflation and the central bank

Published inflation inflation: The rise in prices over the last twelve months, that is, the figure that statistics offices publish and the one the player sees. See E5
Inflation expectations: The inflation people expect, a blend of the central bank's target and the inflation they have lived through. See E3
Inflation target: The inflation the central bank aims for, specific to each country. See Calibration
Phillips curve: The relationship that pushes inflation up when the economy runs above its potential, and holds it back below. It is steeper when inflation is already high, so that the same overheating then pushes prices up faster. See E4
Policy rate policy_rate: The central bank's rate, which the player sets themselves in their own country and which elsewhere follows the Taylor rule. See E7
Real rate: What a loan really costs once inflation is taken out, that is, the policy rate minus expected inflation. See E1
Neutral rate: The real rate that neither slows nor pushes activity. In the game, it equals the country's potential growth minus 0.92 points. See E7
Taylor rule: The rule followed by the central banks of non-player countries. When inflation rises by one point, they raise their rate by one and a half points, and therefore faster than inflation, so that the real cost of borrowing rises and cools the economy. See E7
Credibility credibility: The trust placed in the central bank, from 0 to 1, which is won by keeping inflation close to the target and lost by letting it slip. The higher it is, the more expectations rest on the target. See E17

Unemployment

Unemployment unemployment: The share of the labour force without a job. See E6
Equilibrium unemployment: The unemployment a country has when its economy runs at its potential. See E6
Okun's law: The relationship that lowers unemployment when the economy produces more than its potential and raises it when the economy produces less, to an extent set by the Okun coefficient. See E6

Budget and debt

Budget line: One of the fifteen lines of the budget, counted in points of GDP. The player sets the eight spending lines, such as pensions or health, by their share of the budget, while the seven revenue lines, such as VAT or income tax, follow from the taxes whose rate the player sets. See E26
Share of the budget: What a spending line weighs in primary spending, in %. When the player asks for a share for one line, the other lines keep their amount, and that line receives what it needs to weigh that share of the new total. See E26
Statutory rate: The rate that the law writes, such as the standard VAT rate, and through which the player sets their fifteen taxes. Four of them have no single rate, and the player then sets the level of their schedule, 100% at the start. See E35
Tax base: What a tax applies to, such as purchases for VAT or profits for corporate tax. It shrinks when the rate rises, so a higher rate raises less than in proportion. See E35
Government revenue gov_revenue: What the government collects, as a percentage of GDP, that is, the sum of the seven revenue lines and of other revenue, such as oil rents or foreign aid. See E26
Primary spending primary_spending: What the government spends, as a percentage of GDP, not counting interest on the debt. It is the eight spending lines added together. See E26
Primary balance: Revenue minus primary spending. It is called a surplus when it is positive and a deficit when it is negative. See E8
Automatic stabilisers: What worsens the balance in a recession and improves it in an expansion without anyone deciding anything, because taxes follow activity while the spending already voted stays the same in euros. See E8
Public debt gov_debt: What the government owes, as a percentage of GDP. Every day, interest pushes it up and the primary balance brings it down, or pushes it up further when that balance is in deficit. See E11
Effective rate effective_rate: What the debt costs on average, that is, the interest paid divided by the debt. Because each loan keeps the rate at which it was taken out, the effective rate only catches up with the market rate at the pace at which the debt is rolled over. See E10
Risk premium: What lenders ask for on top of the risk-free rate, an amount that rises with the debt, with the deficit and with the probability of default. See E10
Debt limit: The debt beyond which the markets stop lending, which stands at 159.7% of GDP for France. See E16
Default: The day the markets stop lending, either because the debt has reached the limit or earlier, through bad luck. Default wipes out 37% of the debt, which is called the haircut, and shuts the country out of the markets for 5.1 years. It also costs the country growth and brings down its government one time in two, whereas a separately elected president does not fall with it. See E16

Opinion and elections

Popularity popularity: Support for the government, from 0 to 100%, which starts at 50% for every new government. See E12
Cost of ruling: What governing costs in popularity whatever the economy does, that is, 0.6 points per year in power. See E12
Purchasing power income_growth: The growth over twelve months of households' real disposable income, that is, what they earn, minus what the government takes, plus what it pays back in benefits. See E14
Time-for-change penalty: The 4.3 points of the vote that a camp loses when it has governed for two terms or more, at the election that decides who governs. See E15
Campaign: The 90 days before an election that judges the player's camp, during which the player debates and makes promises. See Campaign
Two rounds: An election where, if nobody has a majority in the first round, the top two face each other in the runoff fourteen days later, as in the French presidential election. See E30
Debate: A face-to-face, seven days before each round, where the player chooses to defend their record, to attack or to promise. It brings in only a few votes, and that gain is partly down to chance. See E31
Promise: A campaign pledge on a budget line, part of which voters grant the player in advance. Once elected, the player must keep it within two years, or else pays for it in popularity. See E32
Credibility of promises: The voters' trust in the player's promises, from 0 to 1, which rises when the player keeps their word and falls by half when they break it. See E32
Alert: A message the game gives the player when their economy crosses a threshold, such as the start of a recession or inflation that is too high. It changes nothing in the simulation. See Alerts

Parties and governments

Slider: One of the twelve questions on which each party has a position, such as the role of the state in the economy or immigration. This position runs from 0 to 100, and 50 is the middle. See E19
Distance between parties: The gap between the positions of two parties on the twelve sliders, where large gaps count for more. Votes, coalitions and runoff transfers go first to nearby parties. See E20
Family: The name of the region of the sliders where a party sits, such as “liberal right”. It is used only to present the party, because no calculation reads it. See E19
Incumbent camp: The parties of the government, one of which leads it while the others are its partners. When the camp loses votes, the partners lose more than the party that leads. See E20
Electoral system: The formula that turns votes into seats. Under proportional representation, seats follow votes, whereas under a majoritarian system the largest party receives much more than its votes. In a two-round system, the voters of small parties transfer to whichever of the two finalists is closer to them. See E21
Coalition: A government of several parties. The party that forms it takes in the closest parties one by one, until it gathers more than half of the seats, and if it finds nobody, the government is a minority government. See E22
Electoral autocracy: A regime that holds elections without making them free. The government loses only one election in five there, whatever the voters think, whereas a closed autocracy holds no elections at all. See E23
Populist leader: A head of government whose party is at 75 or more on the populism slider. In a non-player country, its central bank responds less to inflation, its tariff rises and its rule of law wears away. See E24
Pure rationality: A game setting that, once switched on, makes non-player governments follow their rules alone, without the departures that the game gives them. See E24
Separately elected president: A president whom voters elect separately from the assembly the government comes from, as in France, so the president's camp is judged at both elections. See E22
Cohabitation: The situation of a president whose party does not lead the government, after a lost assembly election. When that president is the player, they go through it without losing the game. See E22
Dissolution: The president's decision to send the assembly back to the voters. The new assembly is elected 40 days later and cannot be dissolved again for a year. See E22

Decisions and votes

Tabling: A decision that parliament must vote on is not taken on the spot but tabled, then voted on 30 days later in a democracy, or 15 in an electoral autocracy. See E25
Ideal level: The level a party would like for a line. It starts from the country's starting level, and moves further away from it the further the party is from the middle of the line's slider. See E25
Stake: What a measure is worth to a party, that is, by how much it brings the line closer to the party's ideal level, minus a cost that grows fast with the size of the change and minus the fear of the deficit when the measure widens it. The stake turns negative when the measure goes against the party's ideas. See E25
Abstaining: A party that votes neither for nor against, because the measure matters too little to it, or because the measure costs a government partner more than the partner accepts, without reaching double that amount. Its seats then weigh on neither side. See E25
Reform: Several measures that the player brings together and puts to a single vote. Everything then passes or nothing does, and each party votes on the sum of its stakes. See E25

Population and incomes

Quintile: A fifth of the population, once it is ranked from the lowest income to the highest. The first quintile thus gathers the 20% who are least well-off. See Population and incomes
Population group: A part of the inhabitants that the game follows separately, with its own income and its own opinion of the government, such as retirees, the unemployed or low-income households. See E27, E28
Disposable income: What a household has left to live on, that is, what it earns on the market, plus what the government pays it, minus what it pays in taxes. See E27
Gini coefficient: A measure of income inequality, from 0 when everyone has as much as everyone else to 100 when a single person has everything. See Population and incomes
Progressivity: The fact that a tax takes a larger share of the income of the better-off. The player sets it through the income tax schedule, and non-player governments through a lever. See E29
Means test: What restricts aid to low-income households. Part of those who are entitled to it do not claim it, which is called non-take-up. See E29
VAT by family of goods: The VAT rates specific to food, to household energy and water, and to medicines, alongside the standard rate. Lowering them mostly eases the burden on the least well-off, who spend a larger share of their budget on these goods, and costs the state what they raised. See E35
Minimum pension: A share of pensions paid in equal amounts to the retirees of the two least well-off quintiles, on a means-tested basis. See E29

Protest movements and events

Protest movement: A population group that takes to the streets because the government has made it lose part of its income. See E33
Anger: The intensity of a movement, from 0 to 100. Beyond 60, the protests turn into riots, which cost output. See E33
Habituation: What a group has come to accept of the loss it lives with. It feels half as much of it after six months, and only the part it still feels calls for anger. See E33
Demand: The budget line that a group calls for, such as pensions for retirees or less income tax for the middle class. See E33
Concede, receive them, firm hand: The government's responses to a movement. Conceding withdraws the contested measure or grants the demand. Receiving the movement calms its anger only a little, and only once, whereas the firm hand calms it a lot, but only for a while and at a cost in popularity. See The responses
Announced measure: A decision of the player that is waiting for the 1^st of the month or for the vote in parliament, and that the groups already judge as if it applied. See The responses
Response to an event: What the player decides when an event hits their country, such as emergency aid or a lockdown, and whose effect works through the budget, output or popularity. See E34

The words of the model

Non-player countries: All the countries the player does not run. They follow the rules that the studies have estimated, the Taylor rule for the central bank and a fiscal rule that keeps the debt in check, but depart from them in four ways that the studies have also measured, such as a more generous budget before an election. Depending on their side, they also change who pays and who receives. See E9, E24
Country groups: Advanced, emerging and low-income countries, that is, high, middle and low income as the World Bank defines them. When a study does not give the value for a country, the country takes the value of its group. See Calibration
Bound: A value that a simulation must not cross, although it is not a cap applied to the calculation. If a simulation crosses it, there is an error. See Variables
Unknown: A term that an equation needs but that the game does not compute yet, such as the exchange rate or debt in foreign currency, and that is held at a neutral value in the meantime. See What comes next
Seed: The number that sets the randomness of a game, so that two games started with the same seed are identical. See E13
Study, range, derived, choice: The four statuses of a parameter. A “study” value is published as it stands, a “range” value is taken within a published range, a “derived” value is derived from the published figures, and a “choice” is a decision by the studio, with its reasons given. See Introduction