Bonds and Interest Rates

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Roland040
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Joined: Aug 15 2008

Bonds and Interest Rates

Post by Roland040 »

Hello im just curious reading elsewhere about interest rates in the real world why is interest rates tied to the number of bonds produced in a country in this game? I would have thought that interest rates would be a separate slider to control inflation. I admit im no economist but its a thought that crossed my mind. Anybody that understands this sort of thing i would appreciate their explanation thanks.
GIJoe597
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Re: Bonds and Interest Rates

Post by GIJoe597 »

I really do not pay any attention to bonds, other than to pay them off, but I think your assesment is wrong. Interest rates are not tied to the number of bonds you have, but rather the amount of money you have borrowed.
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Eldin
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Re: Bonds and Interest Rates

Post by Eldin »

Hello. You are correct that the interest rate increases as you procure more bonds. I think this might be to represent your national credit rating, where if you borrow a lot of money the higher the risks are for those who borrow you the money thus a higher interest rate. I am no economy expert but it is my understanding that this is pretty close to how it functions in real life. The interest rate from bonds are not to be confused with your key rate.
Roland040
Colonel
Posts: 298
Joined: Aug 15 2008

Re: Bonds and Interest Rates

Post by Roland040 »

Hello thanks for your replies. I realise now i was getting confused with the interest on these bonds and the interest one has for the country to deal with inflation and mortgages etc, which i guess isnt included in this game. Thanks anyway for your help.
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