Being Mario Draghi

THE life of a European central banker was far simpler in the early days of the euro zone than it is now. “€conomia”, an interactive game on the website of the European Central Bank (ECB), harks back to these gentler times. It is designed to explain, “in a simplified way, how monetary policy works”, and allows players to pretend that they are Mario Draghi, the ECB’s president.

The instructions have a clarity that induces nostalgia: “Keep the inflation rate just under 2% and stable. Raise the interest rate to push inflation down. Lower the interest rate to push inflation up.” Players are told the growth rate of real GDP, the inflation rate, the growth in the money supply and the level of joblessness. Extra guidance is provided by a ragtag group of advisers, including a hippy, a narcoleptic and a gambler—which may be how Bundesbank officials now view their euro-zone colleagues.

Players set policy every quarter and each game lasts for a total of eight (notional) years. The game assesses performance every two years, with “stars” awarded to those who can keep the average rate of inflation between about 1.7% and 2% with minimal volatility. When prices rise too quickly, or fall too rapidly, the game abruptly ends on a stern warning about social stability. Yet even when the game ends early due to “rapid” inflation (meaning 8% over a two-year period), unemployment stays oddly low, at only 2.5%.

€conomia badly needs an update if the ECB really wants to educate Europeans about its current job. Players need more data on sovereign-borrowing costs, cross-border deposit flows and Target 2 balances. They should also have many more tools at their disposal, such as unlimited loans for troubled banks and programmes to buy unlimited amounts of sovereign debt.

The objective of the game is ripe for change, too. Instead of stabilising the rate of euro-zone inflation, players should prevent any country from leaving the single currency. The crisis-hit countries will exit if they become trapped in recession but the northern-tier nations will quit if their domestic inflation rates exceed an annual average of, say, 3%. Anyone who succeeds should go on the shortlist to be the next ECB president.