Globally Unified Statistics and Trade Organization

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The Globally Unified Statistics and Trade Organization or GUSTO is a Civil Department within the Organization of Sovereign Nations, providing an economic statistics system for its participants, including the First Sovereign Bank, the Meritocratic Central Bank, the The Aperin Central Economic Planning Board Central Bank. In December 2004 the Bank of European Currencies joined and a month later so did the Pacific Security Reserve. GUSTO is an advanced economic calculator and is currently in its testing and development phase.

The founder and Director of GUSTO is Jack McDonald from Jasque.

Purpose

The purpose of GUSTO is to expand on the information provided by NationStates in order to generate statistics that give nations a more complete picture of their economic situation. Participant nations are generally assumed to be interconnected through trade, currency exchange, and foreign investment, as well as other forces. Because of this assumption equilibrium on a global basis is a fundamental goal of GUSTO. Economic statistics therefore reflect not only the result of national statistics coming from the NationStates server (Economy, population, income tax, etc.), but also the economy as it interacts with all other nations in the GUSTO system. GUSTO is therefore a holistic system designed for a community of interconnected nations.

The ultimate goal of GUSTO is to serve as a system that expands upon NationStates, but that is able to stand on its own in many respects. Participant nations will have options that allow them to develop a more complete economic policy than is currently allowed in the game. Participants will be able to make policy decisions that affect many areas, including:

  • Trade: Exports and Imports
  • Monetary Policy
  • Currency Exchange Rates
  • Interest Rates
  • Savings and Investment Decisions
  • Fiscal Policy
  • Productivity of Workers
  • Aggregate Output, or GDP
  • Employment
  • Distribution of Income

A few of these decisions are made through the central banks. (See below for more information.)

GUSTO is also involved in statistics involving the military of member nations. This is an offshoot of the economic statistics generated and is not as developed as the rest of the system.

Central Banks in GUSTO

Central banks play an essential role in GUSTO. A central bank is in charge of all monetary policy regarding a specific currency. This means that it is the decisions of central banks that have the most dramatic affect on phenomena such as exchange rates, inflation, and interest rates.

A central bank will serve several nations and will possess the sole authority to make monetary decisions for those nations. It is the responsibility of the economic leaders of member nations to converge and set a policy that benefits all nations served by the bank.

There has been criticism of the role of central banks in GUSTO because nations are required to change their national currency to that of the bank. For instance, if a nation had the “dollar” as its currency and wished to join the First Sovereign Bank, the nation would be required to stop using dollars and instead use “Sovereigns.” This change would be made in the nation’s settings page through the NationStates website. Without making this change a nation cannot enjoy the full benefits of GUSTO. Therefore the decision is essentially forced upon a nation and is criticized as violating national sovereignty.

The designers of the system defend the role of central banks on the grounds that setting monetary policy is complicated and time consuming. They believe that many members of GUSTO will not be interested in devoting the time required to learn monetary policy, and that by spreading the responsibility to many members only those who are interested in the banks have to learn how to operate the banks. They state that this policy allows for the most realistic economic model, but does not force every member to learn the complicated economics behind GUSTO.

Militaries in GUSTO

GUSTO has goals to create statistics involving members’ militaries, and has taken several small steps toward doing so. The premise is that the economy of a nation is a good indicator of the nation’s military strength. This strength is then considered along with the nation’s funding for the military (as determined by a nation’s XML feed). Therefore a strong economy will lead to a technologically advanced military, and a large amount of funding will allow for many weapons and troops.

The eventual role of militaries within GUSTO is as yet undetermined, but it was originally suggested that nations be allowed to produce and sell equipment. Such production and purchasing decisions would be dependent upon the other statistics generated by the GUSTO economic system.

Methodology

Many components of GUSTO’s methodology have not been revealed, but the basic nature of the system is known.

GUSTO is a linear system that moves forward from one process to another. While it may use the results of a previous action, it may never go backwards to change those results. It is also a mathematical system that acts upon numbers using basic mathematical formulas.

GUSTO is updated each day, and the first action it takes is to compile the XML feed of all member nations. This XML feed is stored, and it is used as the basis of all other information generated. From the XML feed a complex series of tables is used to transform qualitative data (ex: Frightening, Very Good) into meaningful quantitative data (ex: 5, 230). Several variables are created in this manner, the most important of which is a nation’s productivity value. Using this information the system generates basic output statistics using the Solow Growth Model (see external links for more information on the Solow Growth Model). From this model a nation’s “steady state” is determined, and it is assumed thereafter that a nation will tend towards this steady state unless other forces act against it. The steady state will then serve as a reference point for future variables such as GDP, Savings, and Investment.

During this phase the nation’s production function is also determined using the equation:


Y = A(K,N)

Where
Y = total output;
A = productivity;
K = the capital stock;
N = population


Once the steady state is known for every nation, they are all connected to the world asset market. During this phase every nation’s savings and investment decisions are considered by the system, and world equilibrium is reached. In equilibrium the total value of all savings for all nations equals the total value of all investment by all nations. This is given by the equation, I=S. The result of this phase of the program gives nations their final value for savings and investment. From these statistics the value for Net Trade can be determined by the equation:

NT = S - I

Where
NT = Net Exports;
S = Total Savings;
I = Total Investment

Using this information the value for GDP can be determined, given:


GDP = SSY + NT

Where SSY is the steady state output level.


Many additional statistics are generated, but most of the formulas are kept secret by the developers.

For information on the methodology involving central banks, see the Central Bank Walkthrough

Calculator

A calculator based on the GUSTO formulas was released on December 25, 2004 to members of the Organization of Sovereign Nations. The calculator was incomplete and was meant to be finished shortly after its release, but no further development took place. However, it is still functional and can provide GUSTO based statistics for nations.

The calculator can be found at http://gusto.jactivism.com/steadystate.htm

External links

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