Deflation

[Gotthard]

I'm not sure the economic model is "crap"...

I think the point is that if it were real life, it wouldn't be a game.

I mean now we can kind of influnce economic policy (although I'll be damned if I can get it to go right...) and while you might disagree with it, the fact is that if people agreed on economic concepts, I doubt we'd keep having all the flucuations and depressions, ect. That we do.

But if it was ultra realistic, I wouldn't be playing it.

Can you imagine it?

"Sorry president, while you might want more oil, you can't lower the demand by raising the price. Yes, you don't want to import food from Russia cause you're about to nuke them, but too bad we can't raise production through subsidies."

Or something along those lines.

One game I would reccommend people check out is victoria:Empire in the sun, by paradox. Similiar to this game, takes place in the 1800's though.

[Gotthard]

"How does this model of fiscal policy deal with the trade-offs of the crowding out, cronyism, productivity, and most important an auction system of pricing?"

I thought crowding out happened when someone produced something at a lower cost than you. I guess you can choose NOT to get crowded out, but you'd take a fiscal loss... seems kinda dumb. Besides, you can do that in real life anyway.

I suppose cronyism isn't in the game. I could make other remarks on it, like you being the supreme ruler and being able to kick them out, but I suppose it is moot.

Productivity is something like price per one unit, or how many hours of labor for one unit, yes? I mean that's right in the game. I believe the efficiency part of the system is HORRIFICALLY broken, don't get me wrong, but it's still there.

And auctioning is there too. Usually in the small scenarios you don't see it because the demand for goods is so much larger than any supply the particular region you are in. I believe on larger maps, especially the WORLD map, you'd see more of it. But let me assure you if you try to sell goods for more than someone else, their goods go first.

I'm confused on subsidies. I'm not saying we HAVE to have them, but it's an economic tool, period. After WWII in germany, there wasn't much left. They got American subsidies to get their economy going. Economically, subsidies are supposed to be temporary solutions, buying time if you will, until the economy can support itself. But this is also a military game, and frankly from what I can tell, all military spending is subsidies. It's not like those tanks are turning us a profit, from what I can tell.

Finally, I don't claim to have a phd in economics or anything, for the record. Just using some common sense, feel free to correct me.

[ridge]

"How does this model of fiscal policy deal with the trade-offs of the crowding out, cronyism, productivity, and most important an auction system of pricing?"

I thought crowding out happened when someone produced something at a lower cost than you. I guess you can choose NOT to get crowded out, but you'd take a fiscal loss... seems kinda dumb. Besides, you can do that in real life anyway.

I suppose cronyism isn't in the game. I could make other remarks on it, like you being the supreme ruler and being able to kick them out, but I suppose it is moot.

Productivity is something like price per one unit, or how many hours of labor for one unit, yes? I mean that's right in the game. I believe the efficiency part of the system is HORRIFICALLY broken, don't get me wrong, but it's still there.

And auctioning is there too. Usually in the small scenarios you don't see it because the demand for goods is so much larger than any supply the particular region you are in. I believe on larger maps, especially the WORLD map, you'd see more of it. But let me assure you if you try to sell goods for more than someone else, their goods go first.

I'm confused on subsidies. I'm not saying we HAVE to have them, but it's an economic tool, period. After WWII in germany, there wasn't much left. They got American subsidies to get their economy going. Economically, subsidies are supposed to be temporary solutions, buying time if you will, until the economy can support itself. But this is also a military game, and frankly from what I can tell, all military spending is subsidies. It's not like those tanks are turning us a profit, from what I can tell.

Finally, I don't claim to have a phd in economics or anything, for the record. Just using some common sense, feel free to correct me.

Thank you Gotthard. Crap was a strong word for a conversation. I agree. My point is that three tools are part of fundamental economic models. Fiscal, monetary and exchange rate (balance of payment) policy. Each creates certain problems and tradeoffs that the others help to temper. These are well established tradeoffs. If the game can include one policy tool with a high level of abstraction, why not the others?

Other policy tools temper each of the problems that fiscal policy generates. Crowding out is a problem in China. It implies an impact on investment (money availability) as well as over-saturation of an industry. Cronyism is a problem in Malaysia. Productivity is a problem in Europe. The auction system for me is free markets--a problem in China--tempered with zones of "pragmatism" and foreign direct investment.

As for subsidy, I would make the distinction between transfers and government spending or purchase (G). The transfer part is welfare and price support. Intuitively, I would say transfers are not as powerful as government spending in the long term. Military spending creates a job, impacts private sector technology, and creates a sustainable income multiplier. Investment in infrastructure like in Singapore creates a long term impact. I can't say the same for Venezuela where money is handed out for a vote.

I like South America. My game as Columbia was fun. The game starts with disinflation and high unemployment. I had to slog through a year of recession with only fiscal tools. Build Engineers. One industrial complex. Military bases. One hydro. Then move to reach the high value exports. My problem is the speed and constraints of this approach.

I can't build out infrastructure very fast without foreign investment or incentives for private industry. Having government own this infrastructure brings up another point about the efficiency sliders. I can't afford to provide a few billions on improving those. Privatizing that industry would solve that and create competition.

So I reach the export economy with relative self-sufficiency. How do I combat the ticking of inflation? Raise prices? This is a new one to me. How is the domestic approval rating tied to all this? I can cut government spending at least right.

[Gotthard]

Hmm... I'm not sure I can comment on some of this, I don't know a whole lot about economics. I'm not sure if currency exchangeis sort of done by the GDC/c system in the game... I'm smart enough to know I wouldn't play the currency market (although it would be interesting to have in thegame...) because I don't understand it... but my people are poorer, and I can buy less because of it, yet because they are poorer I can make goods for poorer and sell them for more profit (although I can buy less...)

Privitizing industry would be a nice touch, although I like to think the money you provide is sort of like contracts to those companies that do it.

From what I understand about inflation, it is having too much money in the economy. Take some out. Tax more, raise prices, ect. I prefer to raise prices myself, as usually in rich economies you can sell your goods for far more than what you get on the WM. In poorer countries, tax more and then sell the rest they can't afford on the WM for more money.

I'll admit I didn't understand a lot of your first 2 paragraphs... can you explain these fiscal policies in greater detail, as well as crowding out, ect? I might be able to provide more conversation with more knowledge. Thanks.