how do you lower inflation?

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mikeownage
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how do you lower inflation?

Post by mikeownage »

The topic title says it all, as china I am at 21% inflation and that seems bad. How do i lower it?
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Re: how do you lower inflation?

Post by dax1 »

maybe I wrong, but usually I tax, tax and tax!
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mikeownage
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Re: how do you lower inflation?

Post by mikeownage »

what's a good percent to keep inflation at?
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Re: how do you lower inflation?

Post by Niko465 »

mikeownage wrote:what's a good percent to keep inflation at?
Under 10%
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Re: how do you lower inflation?

Post by Fistalis »

We poked them about inflation until they re added the effects.. now ppl dont know how to deal with it. :lol:

On topic:
Your domestic mark ups can help to, just dont remember if its raising or lowering them. :oops:
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Re: how do you lower inflation?

Post by goulash »

Basic as I understand is to keep below 10% as stated, play with domestic markups and try not to let unemployment go below 4% thus in some cases you have to delibretaly make people go unemployed for a while (obviously trying to keep a healthy DAR at the same time.

Taxations is also another way that can help.

I would love to see someone whom is very savvy do an extra good and indepth tutorial on youtube on the whole economics side of the game throwing in things such as effects on DAR, production etc.

I myself love the game and try to manage my country but some things are very complex which makes me struggle at times. I am sure there are many players like me whom love the whole global aspect of the game (especially military build up and conquer side of it) but would love to be able to fully understand how to manipulate the markets, production, economcy etc with having to run a country to bust every time we play.

I am sure if one very good tutorial is done (and stickied) to explain better how to manage a economy while secretly being a blood thirsty tyrant, many other players will start to enjoy their games better and appreciate more that they cant wait two months and declare war on half the world and expect to still be in power.
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Re: how do you lower inflation?

Post by Madman »

What is the effect of inflation?
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Re: how do you lower inflation?

Post by Fistalis »

The major thing is the cost to produce goods goes up. :wink:
Prob effects the costs of other things such as unit and building maintenance as well.. hard to say since I have yet to check it all.
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Re: how do you lower inflation?

Post by Madman »

Fistalis wrote:The major thing is the cost to produce goods goes up. :wink:
Prob effects the costs of other things such as unit and building maintenance as well.. hard to say since I have yet to check it all.
Thank you for answer :) I am new player so i need some help sometimes :)
mikeownage
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Re: how do you lower inflation?

Post by mikeownage »

Well, even at 20% inflation with like 2.2% unemployment I still produce everything but military goods cheaper. Miltary goods cost me about 4x more to produce then what they sell for on the market.
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Re: how do you lower inflation?

Post by Fistalis »

mikeownage wrote:Well, even at 20% inflation with like 2.2% unemployment I still produce everything but military goods cheaper. Miltary goods cost me about 4x more to produce then what they sell for on the market.
Ya but as world inflation increases over time it will be much harder to make a profit with high inflation. Costs at the beginning of the game are pretty low and prices determined more by supply/demand so it is possible to still make a profit with high inflation.
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Re: how do you lower inflation?

Post by Anthropoid »

Certainly not an economist, and I barely know the game. However, I've noted that these guys really seem to try to represent realworld dynamics as best as they can and given how they are understood; not to mention that, I do not yet own SRCW but only SR2020, so any comments I make could be a bit 'off' as a result of differences in the two game engines. With that in mind, and making a quick visit to wiki to brush up on what inflation is

http://en.wikipedia.org/wiki/Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account within the economy.
I would guess that, for everything that the player's national account must pay for in the game, there is a background math going on, that modifies that base cost up or down at any given time as the game progresses. Positive inflation would increase that base cost, negative would decrease it. So if your inflation is at 25% for a few years a militia batatlion might cost you $3M to build instead of $2M (which is what they are saying they cost for me right now in April 2022 after I've gradually lowered my Egyptian regional inflation from about 20% to 13%) and annual maintenance might cost you $6M instead of $5M. Maintenance on a militia says $4.63M right now, so maybe I'm even getting some benefit from the relatively low inflation I've promoted: I've got all my domestic markups at 11% right now (except Electricity which is still at 33%) and have kept progressively lowering them from the original levels at game start which I think I had at about 33%.

Not to say that a militia unit is somehow _the_ marker for cost. It is just one example, and since it is relatively small in cost, any changes are likely to show up as more noticeable absolute amounts. I would think that such modifications to base prices to build and maintain would apply to EVERYTHING that you pay for as a result of inflation, though obviously other factors such as efficiency, etc. would also figure in and might mitigate the effects of even high inflation.

As far as what economist think drives inflation:
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[6] Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.[7][8]
Clicking on the money supply page we get
In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time.[1] There are several ways to define "money," but standard measures usually include currency in circulation and demand deposits (depositors' easily accessed assets on the books of financial institutions).[2][3]
So the amount of currency in circulation is one major thing; obviously in the game this is not in anyway represented so I suspect that that realworld factor is simply not represented in game except by the "domestic markup" control. "Demand deposits" I would think represent things like checking and savings account balances, or easily accessed CDs and maybe even stocks or similarly 'easily accessed' non-physical assets? That really surpises me because I would not have thought that the amount of 'stored up' money in an economy would have a postive effect on inflation; that seems to me to be like saying 'the more wealth people have the more inflation will go up,' but I think that cannot be a correct interpretation . . .

Going to our Economy Minister, and looking at the "Inflation Control" prorities and concerns, it says:

Lower Domestic Markups.

ADDIT: I think this is either just wrong or it is a typo or something, because in another thread I was just reading from about six months ago, George was saying that RAISING Domestic Markups was the way to lower inflation. That actually seems to make more sense as it would decrease demand.

It seems pretty obvious that that is intended to be the main way to keep inflation from increasing -> set domestic markups HIGHER.

Just as an aside, the U.S. has become _very_ good at this process. As far as I know, inflation in the U.S. has been well fixed at what they think is the optimally low rate for many years; I want to say ~4% but not sure.

ADDIT: Found this page that shows U.S. historical inflation data over the past 12 years. As you can see it has hovered in the 2.5 to 3.5% range, but has frequently dipped even lower. Presently at 1.8% I think.

http://inflationdata.com/inflation/Infl ... lation.asp

Neat page comparing lots of economic indicators across 'regions' at present. As you can see, a lot of the developed economies have low inflation, but a few societies are afflicted with high inflation (25% and 30+%).

http://www.tradingeconomics.com/

Many other economies around the world are not so lucky, and some nations have in recent decades experienced insane rates of inflation because of basically incompetent economic policy by the national leaders, and/or because of crises caused by military, social or economic upheavals. Zimbabwe for example had crazy high inflation for many years (maybe still does?) and as a consequence it takes millions and billions of their dollars to buy common commodities like food.

Referring to one line from the wiki page: "Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities" I suspect they might have cleverly figured into the maths: scarcity versus plentifulness of commodities that your citizens consume (food, water, timber, petro, electricity, consumer goods).

Scarcity of these commodities in your region would I think tend to promote inflation, so always insuring that you have a nice stockpile would tend to reduce inflation.
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Anthropoid
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Re: how do you lower inflation?

Post by Anthropoid »

I cannot now find the thread, but a day or two ago I encountered an older thread in which George (the lead programmer) and other BG guys were saying that, among the methods for reducing inflation were:

RAISE Domestic prices (Water, Food, Timber, Petro, Electric, Consumer Goods).

I am still playing SR2020; though I bought SRCW, I have only just started it up to see it works.

I am confused about what the "Domestic Markup" really means, and moreover, confused by what appears to be contradictory information in SR2020 in-game.

If you go to your Economic Minister and click on the Priority and Concern "Inflation Control" under the top box in the explanation popup for that priority ("Priority" which seems to indicate what the Minister will DO) it says "Lower Domestic Markups."

I understand that reducing demand, preventing scarcity, and taking money out of the hands of consumers is the way to reduce inflation, and I would TEND to think that RAISING the Domestic Markup would accomplish this. However, so far my experiments with trying Domestic Markups really high for a while didn't seem to reduce inflation (but maybe it wasn't for long enough) and my keeping domestic markups as low as possible seem to make little difference so I remain unsure. I also have infrastructure at like 120 and have taken as many facilities offline as possible%.

Can someone from BG please clarify? Is it Lowering or Raising Domestic prices in SR2020 (and presumably also in SRCW) that will reduce inflation?
Last edited by Anthropoid on Jan 07 2013, edited 1 time in total.
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Re: how do you lower inflation?

Post by number47 »

Personally, I just raise the unemployment and the inflation falls down. :D
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Re: how do you lower inflation?

Post by Balthagor »

I can't really clarify, it's not an area of the game that I focus on. George is the one who knows the economy.

I did however find an article on the SupremeWiki that discussed inflation though it is in reference to SR2020;

http://www.supremewiki.com/node/127
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