Students' Guide - General Introduction to the Virtual Economy

The Virtual Economy is an online model of the UK Economy based on the HM Treasury model. This means that you can use it to make policy changes and see the effects on the economy. The output page gives you the effect both on the macroeconomy (inflation, economic growth, unemployment and so on) and also on individual families earning different amounts.

The key to using the Virtual Economy is learning how to navigate around it. The model is based on Number 11 Downing Street (extremely loosely!) and is split into 5 floors. You can navigate between floors either by using the top navigation bar or by using the panel on the right. You can jump straight from one floor to another and don't have to go through them one-by-one.

Once you are on a floor, the floor plan will change to show the rooms that are available. To access the resources in that room simply click on it. There will be links below the floor plan to show what is available. There is a floor by floor contents on page 3 of this student's guide. Click on the page number at the foot of the page to access it. You may like to print it for reference.

Throughout the Virtual Economy any term that is in the glossary will have a small book icon beside it, and clicking on this icon will take you to the glossary for the definition.

Clicking on the fourth floor at any time will take you straight to the model itself. In some places (particularly worksheets) there will be a small icon to link to the model. Clicking on the icon takes you straight to the model. In the model there are two different input forms for making your changes. There is one that has just selected variables - income tax, VAT, government expenditure and interest rates. The other input form has all variables and means that you can change all the above and tax allowances, benefits, indirect taxes, tax thresholds and so on to see the effects. The model output page gives the impact of your changes on the macroeconomy and the microeconomy. At the top of the output page is a series of small icons showing the effects on each individual variable and family. Clicking on any one of these icons takes you to much more detail about that variable or family. Alternatively you can simply scroll up and down the page to see the overall impact.