It is a game that gives people the chance to set monetary policy to steer the US economy. In the UK, “MyUK” allows people to put themselves in the Prime Minister’s hot-seat and invoke Article 50 on any day of the week. These are effectively single-person games, designed largely for educational purposes. But there is no reason a similar game could not be designed which was multi-person. This would allow interactions among the public, in their communications and choices, to take place. This is crucial for understanding the propagation of stories, and the contagion in choices, across the economy. Once those are captured, the game could offer important insights into public actions and reactions to central bank interventions, in an experimental setting. There are many existing games that are multi-player and interactive, many of them hugely successful. A small sample would include Second Life, Minecraft, EVE Online and World of Warcraft. A number of these games contain elements of the economy or financial system, albeit in a simplified form. Creating a game with a realistic economy, realistic psychology and realistic policy would not be a venture into the unknown. Robert Shiller has spoken of the role played by “narrative entrepreneurs” in catalysing and shaping the popular narratives that propagate across society. Central banks are narrative entrepreneurs, shaping views on the economy and on policy through their words, providing a hopefully benevolent “nudge” to expectations. In a world of new media, that narrative entrepreneurial role has probably never been more important.

It is a remarkable a story of individual imagination and collective action – the self-same ingredients that first enabled humans to break free from their biological chains. One response to the Great Fire was the introduction of new fire laws and regulations. The first-ever building regulations were after soon put in place, specifying the materials to be used when building houses and the minimum spacing between them. This may not sound transformational now, but at the time marked a significant rewriting of the social contract between government, businesses and households. A second response, this time from the private sector, was to create a market previously missing entirely. In response to the devastation, a market for insuring people’s homes was for the first time created. The first fire insurance company, the “Insurance Office for Houses”, was set up in 1681 at the back of Royal Exchange, close to my office. It was the inspiration of (of all things) an economist, Nicholas Barbon. The idea was simple enough. By pooling risks across a number of households, both the insurer and insured were provided with an extra degree of financial protection against fire risk. A problem shared was a problem halved. The newly-installed rules and regulations around house-building reduced this risk further, by protecting individually-insured households, and collectively-at-risk insurance companies, from correlated conflagrations. This risk-pooling idea caught on. The home insurance industry grew rapidly, first in London, then Edinburgh, then across the UK. In 17th century Britain, home insurance was very much a creative industry.