Dealing with inflation

[crunchtime89]

Hello everyone!

So, I have a problem. As Venezuela, my economy is growing very fast. I've installed many Oil factories/timber yards/coal mines and I'm pulling in about 14-28 million in trade alone. My problem is inflation. My inflation goes up 0.1% every day so you can only imagine what my GDP is at the end of each month LOL.

I know how to reduce inflation. I use this method to cut inflation down by .2% daily.

1] Raise domestic prices by 25-40%
2] Cut production of resources down to 10-30% output + demand. This creates unemployment.
3] Decrease spending drastically.
4] High taxes.

The problems I run into with this method is people emigrating away from my country, pissed off population, and my production takes a back seat which means my money in trade goes down. It takes time to recover from people moving away from your country, even if you're GDP is shooting up.

My question is what's the best formula to create STEADY GDP/inflation? I only know how to increase/decrease it drastically. And will this formula keep the people happy?

[crunchtime89]

Okay, so i have an update. I've finally figured out how to control inflation my self. Reduce your spending and raise your domestic prices that will hurt your GDP and bring inflation down.

But now I have a much bigger problem on my hands. My domestic approval rating continues to drop. The only way I can improve my domestic approval rating is if I increase my spending. That means my inflation will have to SKY ROCKET FAST in order to keep my citizens happy.

I currently have my inflation down at 7% and my GDP is top 20 in the world. However, my domestic approval rating is 19% and my population is dropping drastically every week...... :( :( :(

Someone please help. I believe I'm wanting to grow too fast in order to compete with the world powers.

[adamc6]

I also would like answer to this. Currently all you can do is try to find the right balance....which is what government is really about, right?

I spent much and taxed less to win an election, then with inflation at 10%, I cut spending and raised taxes and prices and reduced output from 100% to demand level.

It would be nice to understand more of the internal mechanics of how each measure you can take impacts emigration, or inflation -- like, how important is "cultural subsidy" to attracting immigrants....and what does tourism matter/impact?

Anyway.....consider all of this training for your eventual rise to political office!

[Rhaycen]

Ignore inflation, I ran my economy at 20% inflation from 1936 to well into the 1950's ... it didn't have much of a negative effect on my economy.

Once things balanced out a little, and my unemployment went back up to ~5% inflation went down.

Long term effect seemed minimal having high inflation.