Economic Policy Simulator

This Excel spreadsheet is designed to simulate the effects of various public policies (predictors) on various indicators (effects). The simulation is based primarily on OECD data, utilizing data from 30 top industrialized countries between 1990-2010. I analyzed this data using R (an open-source statistics program), specifically, plm, which which was designed for panel data analysis. I used a simple bivariate, brute force all-variable regression model for about 50 predictors and 50 effects, filtering out the variables that had the least statistical significance, retaining those that had the highest significance (p>0.05). While such analytical methods are not typically the best way to analyze data for scientific studies, my purpose was not to generate and support theoretical positions, but to generate equations to feed this simulation. The user is free to generate her own theories based on the results of experience with the simulation.

To use the Economic Policy Simulator, you will need to save the spreadsheet to your computer--I do not have this in a streaming or java format. There are no protections on the program, so you are free to look at the original regression results and the equations I used to create the simulation, as well as modify it as you find it beneficial. To use the simulator as is, stay on the first worksheet, titled "Economic Policy Simulator." You will see two tables to the left, and a variable-type list to the right. There is a lot of information on this worksheet, so if you use large font or have a small computer screen, you may have to scroll around to see it all. The top table is where you can enter changes to public policies--taxation, spending, interest rate policies, family assistance programs, and employment assistance programs. Enter these changes in the orange column. For example, if you want to increase corporate tax rates by 50%, then enter 50 into the orange cell to the right of "Corporate Tax." The variable-type list (to the right) explains the abbreviations in the left-hand column. For example, corporate tax is a "tax," so is labeled "T." Income taxes are a separate color, and while still taxes, are labeled "IT."

Changes to the economy and your society will appear on the bottom table, and you can see the results for 2-years, 5-years, and 8-years. (While many variables technically showed results at the 8-year level, I only retained a couple of variables at the 8-year level that seemed theoretically meaningful, like education spending, since funding changes for middle school education could take almost a decade to produce any economic benefits). The effects from your proposed changes will appear in the blue cells. You can see that increasing corporate taxes by 50% is related to several effects, like a decrease in Gross Domestic Product and disposable income, and an increase in unemployment. However, increasing inheritance tax is related to an increase in disposable income and GDP, a decrease in unemployment, and a decrease in crime. Both of the original changes were tax policies, however one seemed to be related to benefits to society while the other seemed related to harmful effects.

To the right in both tables are various data related to the variables (predictors and effects). These columns come from the original OECD data set, and help the user get a contextual feel for where we are at right now (both the all-OECD median, and just the United States), and where we have been, listed as the "range" from 1990-2010. The range is the extreme lows and highs from this period.

You should be careful to only enter changes into the orange column. Since none of the worksheets are "protected," you can technically change any cell you want, including the other worksheets that have the equations and data. Doing so will dramatically alter the results of the simulator, rendering it inaccurate, or will simply prevent the simulator from working at all. The other worksheets are the workhorses of the simulator. The worksheet "GC" is the game calculator. All of the equations that calculate the effect changes from your policy changes are entered on this worksheet, as well as the variable data that tells the equations how much to change. The "RR" worksheet contains the original bivariate regression results for each three listed years, along with significance (p: ***>0.001, **>0.01, *>.05, .>.1). The "VariableNames" worksheet have the OECD variable names matched with the abbreviation I gave them for the simulator.

Economic Policy Simulator Excel Spreadsheet download (rather than directly clicking on the link, you may need to right click to manually save)

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"Open your eyes. Don't let your mind tell the story here." Tonic, 1996

"Our lies have made us angry with the truth." Five O'Clock People, 1997

Regarding an assessment of the modern application of the Ten Commandments:
"Science supplies the means of killing, finance the methods of stealing, the newspapers have learned how to bear false witness artistically to a globeful of people daily, and covetousness is the moral basis of our civilization.." Rauschenbusch, 1917