The Institute for Fiscal Studies (IFS) and Biz/Ed have been awarded a £40,000 grant from the Nuffield Foundation to develop Virtual Economy (VE): a new teaching resource based on IFS's Be Your Own Chancellor (BYOC) Web-based simulation game.
VE will combine existing BYOC code, material from the ESRC Macroeconomic Modelling Bureau at Warwick, and worksheets and other teaching materials developed by Biz/Ed. Like BYOC, the new service will be internet based: it will run on server machines at the IFS, and users will interact with it via a Web browser (or, perhaps at a later stage, a Java Applet). VE will feature a some technical innovations which will allow users to create a username and password on the server and then save and restore their work to it. VE is scheduled to go live in January 1999, in time for school spring term and well ahead of the next budget.
Four people will work on the project:
Now in its third year, Be Your Own Chancellor allows users to play at being Chancellor, raising and lowering tax and benefit rates and seeing how this affects a small sample of families. A sister program, Budget 98 allows users to explore the effect of the current Budget on their own finances. During the 1998 budget these models were integrated with BBC News Online's budget coverage, giving them a much higher profile than before. BYOC uses the IFS Tax and Benefit Model (Taxben) to perform the calculations. Taxben is an extremely powerful simulation tool, developed over fifteen years, but previously only available to in-house IFS researchers.
Biz/ed is a rich collection of teaching and learning resourcesincluding key facts on companies, an extensive range of data, a catalogue of internet resources, teaching worksheets and a variety of materials for students (see http://www.bized.ac.uk/). Biz/ed is being actively developed: it has recently reached 1,000 catalogue entries, and a notable recent addition to its teaching resources is the Cameron Balloons Virtual Factory (http://www.bized.ac.uk/virtual/cb/).
Not actually online, but in a similar spirit, is Ready Reckoner, a macroeconomic simulation from the Warwick ESRC Macromodelling Bureau. This is based on the models of the Treasury, London Business School, and National Institute for Social and Economic Research (though probably only the Treasury model will be used for VE). With this, users can change policy parameters such as tax rates, the money supply, and so on, and see how this might affect the aggregate behaviour of the economy, such as unemployment, inflation and the balance of trade. This model is freely available for educational users but at present only on disk for IBM PCs (see http://www.warwick.ac.uk/fac/soc/Economics/MMB/rr.html).
The new project will combine the best of these resources into a single service, targeted in the first instance at A-level and GNVQ business and economics students. This will give them the unique opportunity to test the theory they have learnt in the classroom in a simulation very closely resembling the real world. It will give students a far greater appreciation of the policy constraints faced by governments and help prepare them much better for being active participants in economic life.
The IFS will contribute an updated version of Be Your Own Chancellor, as well as "back end" Web server technology which will allow users to save their policy simulations and return to them at a later date. Adding the Warwick Ready Reckoner will then allow our users to explore the effects of fiscal changes all the way down the line: not just the direct effect on families that Be Your Own Chancellor predicts, but also the effect on, for example, unemployment, interest rates and growth.
Biz/ed will supply it's detailed first-hand knowledge of the A-level curriculum and schemes of work, allowing the creation of a full set of teaching and learning materials based on these models. These materials will take the form of explanatory hypertext, interactive pupil worksheets (one such worksheet for Be Your Own Chancellor already exists on Biz/ed), advice on how to incorporate them into an A-level teaching programme and suggestions for further research - including internet links to relevant materials from each of the partners in the project.
At this early stage we would very much welcome comments and suggestions on what we should include. We would especially like to hear from students, teachers and lecturers with an interest in this area.