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SR2020 Gold, Shattered World, normal difficulty.

For the record, as I am a first time poster and no one knows me, (Hello) I have played the game a fair bit, and micromanage all aspects of the country I play, AI locked out.

The Theory:
I've been making some economic observations in my game here lately. I know some people ignore inflation and some watch it like a hawk, and I think it really depends on your situation and the country your playing as whether it should be a concern or not. As a major exporter type, at least from my experience, it seems to be beneficial to keep inflation in check (low), as to keep your production costs down. This allows you to stay competitive with market prices and maximize profit. This also means you gotta watch how far you push that production slider.

As an importer, or self sufficient type, inflations effect don't seem as pronounced. What ever you produce or import, you markup by a given percentage, so either way you make money. As long as your people can afford the higher markups (vs GDP growth), all theoretically should be well, if my logic is correct. In any country I've played, (usually poorer states), Low inflation with modest unemployment, and gradual GDP growth has always netted me the better results. Each to his own though.

The Case:
When I watch the AI however, the opposite seems to be happening, which makes me wonder if my logic is somehow flawed? Take for example the former Russian states in my game; Moscow imports allot of things as it must being resource poor in many areas. Versus say its northern neighbour, the Western Urals whom is resource rich in everything. GDPs are similar, Moscow has twice the population compared to the WUs. In the past 5 games, the same course seems to take place....

Moscow maintains its GDP, practically keeping it frozen, leading me to believe its managing its inflation, keeping it low. The WU's on the other hand does the total opposite, basically running production at max exporting a gazillion tons of everything it has. The effect of this of course, his GDP rockets up like a ballistic missile. Given his DAR continues to improve, along with his treasury, its safe to assume he also maintains high social spending. I expect hyperinflation is taking place, extreme high double digit to say the least.

Now how I'm fairly certain my logic is not incorrect, is the fact that when these two states go to war many years later, two things happen. While both maintain Defcon 1, Moscows treasury remains balanced, plus or minus a bit, the WU's treasury falls like a SUV dropped from an altitude of 10,000 ft.

I'm missing the boat here, can someone explain this?

(btw: I love this crazy game!)