inflation and 1.3

MaxRiga · Post by **MaxRiga** » Oct 14 2005

unfortunately, i can't play SR2010 so far, but tell me, have the inflation system been fixed ( gdp + 15% means infl + 15% ) and there is no chance to balance and return the inflation back to 0 ( or the standart 1-2% ) without decrising GDP?

thx

Post by **George Geczy** » Oct 23 2005

The inflation/GDP model has been fixed and expanded in Update 3, and I think it works pretty well. Growth in GDP does not necessarily mean growth in inflation, just like the real world, but inflation and GDP do have a connection - and as of Update 3, long-term games with GDP growth and/or inflation are properly simulated.

Inflation itself can be curbed, but a lot of the actions that will lower inflation do also have an effect on GDP and GDP growth - again, this is similar to the real world, where fiscal policy to control inflation often results (on purpose) in decreased economic growth.

The best strategies involve running an economy "hot but not too hot", ie keeping unemployment low but not below 3%, focussing more on profitable industries than break-even or unprofitable ones, etc.

-- George.

lordrune · Post by **lordrune** » Oct 23 2005

Yes, the new economy has a much better feel to it - I'm not sure what the negative consequences of inflation are now (aside from a boost to production costs - which has yet to concern me as my sale prices always rise in proportion) but if those consequences are represented somehow, then the model's pretty much perfect if you consider the displayed GDP/C / dollar figure as a inflation-fixed figure.

The AI does seem to struggle to handle the new economy - but then the AI always did. They go bankrupt paying for those hundreds of WM-provided units stacked up thick around the capital cities and bases :)Some AI economies can afford that anyway - but poorer countries generally can't. They just pour all their resources into supporting a bloated military while unable to import the agriculture and water demanded by their populace

(Which demands more as GDP/c has gone up due to full employment caused by too many people working in the military - hehehehe)

The_Blind_One · Post by **The_Blind_One** » Oct 25 2005

Well I noticed that making ur economy bigger actually means bigger costs due to inflation, but those are offset by the growth of the economy, but you'll truely reap ur benefits once u cooldown ur economy and let the inflation balance and u'll gain a nice positive cashflow but low economic growth.

George, I just wanted to say that I find it EXTREMELY hard to get unemployment below 3% and this is slightly made the economy to easy to grow substantially in little time.

I've seen growth with $150 added tot he gdp/c a day and that resulted in an unemployment of 3.3% and an inflation of roughly 6.6%, that meant my economy was growing with roughly 40% in a year yet unemployment didnt drop below 3% when doing so.

I think u might want to make growth more painfull on unemployment and inflation

, just a tad, I'd like to see regions going below the 3% unemployment.

Also another thing...I've been unable to create stagflation

I noticed that unemployment seems even more connected to inflation now than before

All in all, I love the new economic model

, u did a good job

lordrune · Post by **lordrune** » Oct 25 2005

Also another thing...I've been unable to create stagflation

Didn't you know? George is a Keynesian

Eric Larsen · Post by **Eric Larsen** » Dec 12 2005

The_Blind_One wrote:George, I just wanted to say that I find it EXTREMELY hard to get unemployment below 3% and this is slightly made the economy to easy to grow substantially in little time.

I've seen growth with $150 added tot he gdp/c a day and that resulted in an unemployment of 3.3% and an inflation of roughly 6.6%, that meant my economy was growing with roughly 40% in a year yet unemployment didnt drop below 3% when doing so.

I think u might want to make growth more painfull on unemployment and inflation , just a tad, I'd like to see regions going below the 3% unemployment.

Also another thing...I've been unable to create stagflation
I noticed that unemployment seems even more connected to inflation now than before

All in all, I love the new economic model , u did a good job

The_Blind_One,
I'm having trouble keeping unemployment below 7% after 3 or 4 months, much less getting below 3%; not to mention trying to keep inflation above 1%. How the heck do you stop the damn economic freefall and start getting the economy to grow? I've managed it about 6 months into a game, but only after cutting taxes and domestic markup to almost zero plus setting immigration to $49,999! Got whacked by the WM with a 9.5% bond renewal!

One trick I see the AI's doing is selling off excess inventory, including stuff they don't make an excess of. I'm still perplexed with the WM scoring as it almost seems like you have to export tons of stuff to make the WM happy and not lose WM scoring points. Looks like one has to engage in day trading in almost all commodities, hopefully buying low and selling high. I've found one neat trick is to buy up stuff on day 1, since the prices are cheap and then turn around and sell it at a profit a few days later.
Thanks,

Eric Larsen

inflation and 1.3

inflation and 1.3

How do you do it?