Inflation

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Inego
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Inflation

Post by Inego »

Inflation is not mentioned in the manual at all. The finance minister, btw, can have priority "Fight Inflation".
My question is, what does inflation affect in the game? Why does it grow?
(And, please, no Adam Smith references this time).

If this information was available as a popup hint in the game...
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Joemurder
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Post by Joemurder »

As far as I understand inflation effects the price it costs to produce something domestically. Eventually, inflation can cause production of commodities to become cost prohibitive. If inflation is rising, unemployment is usually falling. This causes labor costs to go up along with production costs. (consumer, industry goods,etc.) It usually grows(inflation) because your GDP is growing (full production at facilities, construction, etc.) and your unemployment level is falling. Telling your minister to "fight inflation" usually has him/her reduce production levels and raise domestic prices in order to increase unemployment. It's a constant tight rope act of expanding and shrinking your economy. Go too far in one direction and long term problems can arise. Hope that helps.

P.S. Adam Smith 8O
Last edited by Joemurder on Nov 15 2008, edited 1 time in total.
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Mitchell
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Inflation and unemployment

Post by Mitchell »

Joemurder has it about right - when labor shortages arise (low unemployment) wages go up, fueling inflation and causing workers to demand even higher wages - becomes a vicious cycle. It can be a chicken-and-egg thing, though, trying to figure out what caused the problem in the first place.

One way to fight inflation and increase unemployment, at least in SR2010, was to deactivate industries while also INCREASING domestic markup. This worked because the lower production level can be matched by the decreased demand caused by the increased price - and the government (i.e., you) pockets the prifit you gouge from your adoring citizens :D . I'm not sure if this is still a valid technique in SR2020 but I expect to find out soon :-)
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Inego
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Post by Inego »

I repeat my question to the developers.
What does inflation affect in the game?
Whatever region you play, it has always $ as currency. And costs of building facilities is always fixed.
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Legend
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Post by Legend »

The best person to answer you on some of your more details questions is our Lead Programmer, George. Unfortunately you may, or may not, have to wait a bit as his schedule may not provide the best Internet Access for the next while.

To provide a more general answer to your questions... when you ask what does inflation affect in the game... what does it affect in the real world? It does roughly the same thing by using a variety of factors. For a more detailed answer you'll have to wait for George.
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BattleGoat
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Post by BattleGoat »

Sorry... I though Joemurder pegged it for you.

Let's see - Essentially as inflation rises, the cost of labor goes up and in the game this can get to the point where it is more expensive to produce products in your region than it is to buy them from outside your region. So... when you look at each product, if the "Production Cost" is higher than "Market Price", you might want to consider scaling back your production and instead importing that product.

Also, as GDP/c goes up, consumers will theoretically have more disposable income and their demand goes up for things (this is set up logarithmically in the game).

And... As part of the storyline, the UN adopts a New Dollar Standard. That's essentially so we're not dealing with 250 different currencies in the game and causing most people no end of confusion.

What else... Yes the same upgrade always reports a fixed cost to build, but each region "Operating Cost" for the same type of facility will vary depending upon the GDP/c of that region. Low GDP regions have lower labor costs and that will be reflected in ALL daily expenses.

Is that what you were looking for?
- David
Inego
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Post by Inego »

Yes, thank you very much.

Pity that this and other valuable information about the gameplay mechanics becomes spread between various threads in the forum.
Is there a place where it can be collected?
Is it the Supreme Wiki?
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BattleGoat
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Post by BattleGoat »

Yes... The wiki is an excellent source of many additional details.
- David
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Feltan
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Post by Feltan »

Inego wrote: Is there a place where it can be collected?
Yes, read The Wealth of Nations by Adam Smith. :lol:

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Feltan
ETA Five Minutes ......
Inego
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Post by Inego »

Feltan wrote:
Inego wrote: Is there a place where it can be collected?
Yes, read The Wealth of Nations by Adam Smith. :lol:
Ah, so the line "Gameplay mechanics ............. Adam Smith" can be included in Credits?

Damn, that guy lived and died in XVIII century. And the idea that his vision of economics can be applied to a XXI century game concerning XXI information century economics blows my top. :evil:
Inego
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Post by Inego »

Adam Smith... Visit his page on Wikipedia, look at his avatar.
Then look at SR2020.
No harmony.
Boston
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Post by Boston »

any suggestions on how to reduce inflation in the game?
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BattleGoat
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Post by BattleGoat »

Biggest one is reduce production of both goods and military. First look at each product and see what you are making more of than you need. Then look if the extra is REALLY PROFITABLE on the international markets or barely selling above cost. If the later, try taking some of its production facilities offline "Inactive". Don't scrap them till you're sure they're not needed. Rinse and Repeat for all eleven commodities.

Next... What's your military production capabilities? Do you have Naval Production? One or more? Do you really need to build ships for what you want to do? If no... consider deactivating that as well.

Those should get you started anyways...
- David
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Post by Boston »

i have managed to reduce it, but its hurting my GDP/c a lot
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Post by BattleGoat »

yup! they go hand-in-hand.
- David
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