In depth analysis of economy?

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raxo2222
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In depth analysis of economy?

Post by raxo2222 »

I just post screenshots of them:
Image
Image

I know moving all social spending too much overheats economy, and taxes can slow down it.
What happens if I set domestic prices at 200% aside of crashing demand?
Last edited by raxo2222 on Aug 22 2017, edited 1 time in total.
GIJoe597
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Re: What each tax and state service actually do?

Post by GIJoe597 »

Your Domestic Approval rating will start dropping. Your industry will slow, but you will have more to export. It can increase treasury over a short term if a commodity is in great demand. I will sometimes set resources/commodities at 200% in situations where I simply cannot produce enough to satisfy my needs. Electricity is a common one in the current version of SRGW. As the USA there is no way to meet the demands for power. I will set it to 200% usually right off the bat and watch the DAR closely.
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raxo2222
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Re: What each tax and state service actually do?

Post by raxo2222 »

Ah so just approval and demand will fall if I set price to 200%.

Why for example Mongolia does just fine with 0 social spending and 2.5% rating of all state services, while having 13$ GDP/c and USA will fold itself when zeroing it?
Would USA reach steady state at 13$ after long term?
Does this mean, that certian state service level means certian GDP/c level with unchanged taxes?
GIJoe597
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Re: What each tax and state service actually do?

Post by GIJoe597 »

There is a little more to it than just DAR and demand. Obviously you are idling workers when you shutter factories, which means less employed people to pay taxes. But if your Unemployment is very low they should move to other jobs. there is also some income lost from the Unemployment Tax when people are not employed. It is a delicate dance to weave with the factors BG has coded in.

There is a "coded" influence on populations within the game to make them "used" to something. In your example of Mongolia and the USA as it pertains to Social Spending, the USA population is "used" to getting the services, they have a certain lifestyle which is heavy impacted if the services are removed/reduced. While Mongolians are used to a tougher lifestyle, they never had the "kushy" support many in the USA enjoy. A real world analogy I often use when discussing this with friends about real politics is this;

I have been to 28 or so countries, I have seen poverty, what most in the USA consider poverty is not. In the USA even our very poor have cars, cell phones, cable or satellite tv. In other countries the "poor" have no idea where their next meal is coming from. A huge difference in perspective.

GROSS DOMESTIC PRODUCT PER CAPITA (GDP/C)
Your GDP/c provides a measure of the contribution in the value of goods and services to your economy by the average citizen of your region. This is a good way of measuring how your region compares to other regions. The trend of whether your GDP/c is increasing or decreasing also indicates whether your economy is growing or shrinking.

As GDP/c increases, it indicates the average income of your population is growing, and the cost of labor is also increasing. If your GDP/c grows significantly, it may become cheaper to purchase certain goods from world markets rather than producing them yourself, though that course of action also could have long-term economic consequences.
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raxo2222
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Re: What each tax and state service actually do?

Post by raxo2222 »

Is there time before inflation, unemployment, domestic approval and GDP/c get used to new level of taxes/services?

Why last 3 taxes in screenshot above give so few cash?
What each tax and social service individually affect?

What influences cost/profit of each service/tax?
GIJoe597
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Re: In depth analysis of economy?

Post by GIJoe597 »

Keep in mind it is 1914, the economy as a whole is no where as good as modern times. Most people did not have a "corporate" job. There were very little "pensions" to tax. They grew their own food, worked on their own machines/appliances and generally struggled to survive. Since most people where minding their own business there is no large tax income in general. Very few people paid taxes, much less reported an income as it was all self reliant.

I would encourage you to read the manual, all this is in there. I will copy paste.


Taxation - Outside of Domestic Sales or Diplomatic Exchanges, your region’s major source of funding is from tax revenue. You can choose to control only the master rate, or you can choose to play with each of eight specific tax rates: Low Income / High Income / Corporate / Small Business / Sales Tax / Unemployment / Property / Pension Fund. Although all taxes obviously affect the overall revenue of your region, they also have subtle effects on various aspects of your economy. One such example: lowering corporate tax rates will stimulate additional corporate growth, and encourage the possible development of business sectors.

Social Spending - On this Action Panel you control your region’s spending on social programs (including Healthcare, Education, Infrastructure, The Environment, Family Subsidies, Law Enforcement, Cultural Subsidies, and Social Assistance). Although there is a master spending slider that you can use if you do not care about the details of social services, some areas can have a far more significant impact to your region than others. It is therefore important to understand the implications of any funding changes you make! If your Ministers are not locked out of this area, they will adjust spending in line with the priorities you've set and the overall financial position of your region.

Causes and Effects
Here are some notable effects of spending on domestic policies:

Healthcare - If healthcare is under-funded, there can be many significant results.
a) Life expectancy will decline.
b) Birthrate will drop and death rate will increase.
c) Immigration will decline, and emigration will increase.
d) Susceptibility to disease will increase.
e) Other economic fallout will occur.
As a result of these factors, it is likely that both your domestic approval rating and your military approval rating will fall.

Education - An under-funded educational system will lead to a drop in research efficiency, and eventually a drop in the literacy rate of your region. This can further cascade; impacting your economy and leading to declines in GDP, tax revenue, and more. Of course, anything that has a negative effect on your economy can also lead to a drastic decline in your Domestic Approval Rating.

Infrastructure - This represents your region’s spending on transportation and city maintenance. Although you may think it a prime candidate for budget cuts in tight times, it is very important to realize the effect this would have on the supply model in the game. The effectiveness with which your cities, bases, and other supply sources are able to provide supplies (fuel and ammunition) to military units is directly affected by the efficiency of your supply structure. Under-funding your infrastructure spending will drastically shorten the range of effective supply, and may lead to stranded units (which, in times of war, may be easy pickings for your enemies). Furthermore, underfunded Infrastructure will result in industrial facilities not producing as much as they might.

Environment - Spending on the environment is not always viewed with the importance of other items. However, investment here helps keep pollution factors reduced in your region, and will earn you some extra approval from both your own population and other nations.

Family Subsidies - This provides families with subsidies towards childcare. As such, it encourages the birthrate, increases the average number of children per family, can reduce unemployment, and in general provides a long-term boost to your economy
and your domestic and international approval ratings. Although this generally has little overall effect, taking it away from regions that have a history of receiving it can badly hurt your domestic approval.

Law Enforcement - Although some of the effects of law enforcement spending are obvious (crime rates, tourism ratings, domestic approval), there is also a deeper consequences to insufficiently funding this department. Without sufficient law enforcement, a region is more vulnerable to Espionage activities. Also, when in possession of territory from an enemy region, dead or alive, the risk of Partisan and Guerilla activities can be reduced by maintaining a high law enforcement rating.

Cultural Subsidies - This is an investment in the cultural Identity of your nation. Spending here makes your people feel more unique, and benefits your domestic and international approval ratings. If your region has a history of spending in this area, reducing the subsidies will have negative effects. Also, if your nation has control over one or more colonies, this can help keep them happy.

Social Assistance - This represents employment services, welfare, and regional pension plans. Reducing or eliminating the spending on these items can save your region billions per year, but may have dire impact on your domestic approval rating. As well, it will greatly reduce the quality of life for the individuals affected by any cuts, and can sometimes have unforeseen economic consequences. This can also be another key element towards keeping a colony under control.
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raxo2222
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Re: In depth analysis of economy?

Post by raxo2222 »

Well I know these basics, but i'm interested in depth working of these.
For example if I lower/raise single tax/service all way, will be other services/taxes affected?
Last edited by raxo2222 on Aug 23 2017, edited 1 time in total.
dax1
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Re: In depth analysis of economy?

Post by dax1 »

raxo2222 wrote: Why some taxes give much less money than others?
|O |O Because the taxable is lower
this is math!!!
20% of 100 =20
20% of 200= 40
Con forza ed ardimento
way2co0l
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Re: In depth analysis of economy?

Post by way2co0l »

lol. Be nice. The game can be a bit overwhelming when you're first starting to pick it up. Even things that seem obvious can be complicated sometimes.

But to answer your question Raxo, the way the devs themselves have often answered this very topic. It's all connected in multiple different ways and it's really impossible to list them all out. Zeroing one of them out will ultimately effect many different things in your economy and really it just comes down to trial and error to get comfortable with the way the economy responds to your changes. It can feel complicated at first but after awhile it all starts to make sense and you can begin to predict what the results will be from your actions in other areas. Feel free to ask for more specific examples if you'd like, but it would just be too much to answer all the ways they're all connected so I'll simply leave it with the fact that it's all connected and any tax or social service you change will have an effect on many other different areas of your economy.
raxo2222
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Re: In depth analysis of economy?

Post by raxo2222 »

How slowly I should ramp up social spending, so inflation wouldn't go above 5%?
way2co0l
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Re: In depth analysis of economy?

Post by way2co0l »

That's a really difficult task and would require severe cutbacks to pretty much everything in order to accomplish. In the game's current state, I feel like unemployment gets too low too easily and I've raised the issue with the devs to look at. Ideally what you're asking shouldn't be a big deal, but in the current game, you'd actually have to cut your social spending, military spending, research spending, and resource production in order to have a chance to keep it that low. Inflation at 10% is perfectly reasonable with the game at this point. 20% inflation is the red line I personally try to stay far away from with 15% inflation being my personal extreme limit. I do everything I can to stay under that limit, which can be difficult sometimes when unemployment starts dropping below 3%. But once you get over 15% inflation you'll begin to notice your GDP growing at a very very fast pace and you'll notice demand for many goods creeping up as you do. That can become a problem if you're unable to meet these new demand levels.
raxo2222
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Re: In depth analysis of economy?

Post by raxo2222 »

Ah so up to 10% inflation is save zone.
But GDP/c has to grow faster than inflation - that is if inflation is 10% per year, then GDP/c should gain more than 10% per year.
way2co0l
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Re: In depth analysis of economy?

Post by way2co0l »

Well, I'd personally prefer under 10% inflation but I find it very difficult to accomplish in the game currently so I've learned to accept it.

GDP growth is a mixed bag. It's good in many ways. It attracts immigrants, gives you more tax income, and generally makes your economy stronger but at the same time your population begins to expect more and more goods. This can quickly outstrip your ability to produce the goods you need forcing you to import them. Considering your cost to produce goods will go up might mean it's cheaper to import goods anyway. But the big issue is that the rest of the world is growing just as rapidly as you so their demand is increasing as well. So the idea of simply importing everything you want might not be as easy when everyone else is having to do the same thing. So keeping your GDP low can actually be a good thing because it leaves your resource demand low and world market prices high so you can sell it for pretty large profits.

Basically, I like to control my growth at the very least to ensure that I'm able to meet the demands of my people. Too fast and it becomes difficult. But too slow means your economy as a whole is weaker than others, and also isn't as enjoyable to everyone else because it means you can't grow quickly and build what you want as rapidly. Not everyone enjoys slower play like I do, so most people will grow a lot faster than me.
raxo2222
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Re: In depth analysis of economy?

Post by raxo2222 »

If I set agriculture price to lets say -50% or -75% price, will death rate drop and birth rate climb?

What happens if I make all goods for civilians very discounted that is -25% and below?
I know demand and approval will rise, as well production if its tied to demand.
way2co0l
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Re: In depth analysis of economy?

Post by way2co0l »

That's a good question. Don't hold me to this, because I'm not 100% positive, but yes, I think subsidizing agriculture does have some direct effect on birth rates. Even if it doesn't have a direct effect on it, I can confirm that it does have an indirect one at the very least by improving GDP and DAR, you make your country more attractive to immigration and GDP does have an effect on natural population growth as well. But I think all of that is specifically greater when it comes to subsidizing agriculture resulting in an even larger population growth boost so it's a good option if that's what you're specifically looking for. :)
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