Dude, IÂ´m getting really confused with the Inflation and have read several posts here "teaching" how to deal with it. None are the same and none has worked until now and again my Inflation is growing, GDP growing, Treasury diving, UNEPL. diving, precisely when IÂ´m getting closer to self-sufficiency. ItÂ´s frustrating, because IÂ´m felling powerless to deal with it.
The reason you may be seeing multiple ways of dealing with it, is because there are multiple ways of dealing with it. Inflation in its simplest form is when the price of your products start rising. Your people get less for their money.
As you build facilities you have to spend more money from your treasury, this prompts your minister to raise prices to help offset costs. Bam, inflation starts rising. Your best bet, until you have a handle on dealing with it is to start small, only build a few facilities at a time. SR really takes a very long time to play due to the length it takes to build almost anything in game. You need to take a 1 year approach, e.i. where do I want to be in one year. You cannot just build like mad starting out, as you are finding out itâ€™s a killer on the treasury.
I'm just curious about the economic model in SR2020. It is true that part of the inflation is the rise of goods over a period of time, the main factor is the increase of the money supply disproportionately to the economic growth. I was wondering if this was in any way modelled in the game? For example, by taking excessive bonds?
I'm assuming you can only take external debts? For example, you couldn't borrow from your own bank? (A bit like what Japan can/does do)
A bit off course of SR2020, but I really hate that inflation is first explained as the increase of goods, when most economist agree that the money creation from private banks is one of the main causes of inflation. If you push that a bit further, the concept of interest is also a cause of inflation, for interest creates a demand for money that does not exists.
Anyways, just curious how inflation modelled in the game. And if the only basis for inflation is local price of goods.