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Website opens doors to N011;Subject of the week;Economics and business

Chris Johnston finds a site based on the economic model of the Treasury

Number 11 Downing Street is the official residence of the Chancellor of the Exchequer, even though Gordon Brown actually dwells in a flat at the top of Number 10. Being a visual representation of that abstract concept called the economy, it is often used as a backdrop for television news reports about economic matters such as the Budget.

Appropriately enough, Number 11 is also being used as the basis of a new website called the Virtual Economy. As its name suggests, the site is an online model of the economy based on that used by the Treasury itself.

Launched last month, it is the result of a venture between Bized, an economics and business Internet gateway based at the University of Bristol, the Institute for Fiscal Studies and Warwick University's ESRC Macroeconomic Modelling Centre. It is aimed at A-level business and economics students, as well as those taking GNVQ and higher education courses.

What makes the site unique is the model, which allows users to make changes in economic policy and see the effects on both the macro and micro-economy. One form lets a large number of variables be altered, and another gives a more restricted selection.

Andy Beharrell, head of economics and business at Clifton College in Bristol, has been seconded to Bized as project manager of the Virtual Economy. He says the idea was to provide a way of illustrating not only how changing the variables affects the whole economy, but also the impact of these changes on families and individuals.

The model processes the data and produces an impressive array of graphs and tables, showing details ranging from changes in income for different types of families to gross domestic product growth. In addition, an explanation of the effect the changes have had on the economy is given. For example, users are warned that a policy package resulting in a negative rate of inflation would completely change the economy and could lead to a "massive downturn in economic activity".

The model is located on the fourth "floor" of Number 11, while the others hold a wide range of information about economics. On the ground level, the Chancellor's Office gives general advice about running the economy and economic targets, while an information bureau offers students' and teachers' guides to the site.

The three rooms on the first floor provide case studies about people, business and government and demonstrate the effects of various economic policies. Andrew Hammond, a business studies teacher at John Ruskin College in Croydon, south London, and part of the Virtual Economy advisory team, says his students have found the case studies particularly useful for illustrating the effect of Budget changes on business.

On the second floor there are explanations about policy tools such as income tax, VAT, government expenditure and interest rates, along with relevant theories and worksheets that can be printed off and used by teachers. "There's a mass of classroom-ready material for them to use," says Andy Beharrell.

The library on the third floor houses details about branches of economic theory and prominent economists as well as a glossary of the terms used on the site.

Andrew Hammond intends to use the Virtual Economy in his classes regularly, finding its ability to demonstrate the effect of economic changes on business particularly valuable. "It's nice to be able to illustrate the points you make in the classroom," he says.

The first four floors of the site - more than 300 pages of information - can be downloaded from the website and put on to a school's network, so that going on to the Internet is only necessary to run the model.

Although the site was created primarily for the education sector (the Nuffield Foundation provided funding), the model is so sophisticated, says Andy Beharrell, that businesses are also making use of it.

The Virtual Economy looks like a resource that teachers and students will want to use again and again, and is an excellent example of how information technology can enliven study.

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