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I've been having loads of fun playing trial and error figuring out how the economics of SR2010 work. I've also been busy reading plenty of posts from some of the players who have claimed mastery of SR2010 economics and I've finally figured out that there is indeed a rather nasty bug as relates to hyperinflation.

I was really intrigued yesterday by one player's assertions that he prefers a research-based economy over a production-based economy. There were planty of snapshots from games showing players crowing about how great their economy was doing when they had taxes over 50% and hyperinflation of 23.9%.

Then last night it finally dawned on me what the problem is. Inflation is not being factored into the "price" of military units, facility construction, or research items over time. Since those prices are staying "static", in essence inflation free, players can take advantage of this cheat bug by jacking up their inflation so that their inflated dollars end up allowing research items to be researched faster or military units and facilities to be built faster.

Inflation must be factored into the price of stuff over time. The cost of an item should be set at a certain percentage of inflation, say 4%. Each item should have a fixed cost component which represents your buildings and equipment already in place, plus a variable cost component that reflects labor and consumable goods purchased as the research or construction is going on. The fixed cost component would not inflate or deflate over time at the same rate of inflation the player is experiencing but would be far smaller. The variable cost component should track by the region's inflation rate to represent increased/decreased costs of labor and consumables.

By doing this players will not be able to cheat at speeding up research or construction times merely by jacking up inflation. This way whether inflation increases or decreases the research and construction times will stay about the same which is what it should be. If you want faster research or construction you should have to push the slider over more to spend more money, not just jack up inflation to unrealistic levels that really would trash any economy.

Have people forgotten what happened to Argentina recently? Yeah hyperinflation nearly wrecked their economy. Remember Germany in 1945 where it would take a wheelbarrow full of marks to buy a loaf of bread? Hyperinflation definitely wrecked their economy as much as Allied bombs.

Please fix this dubious bug that allows players to cheat reality with hyperinflation. Hyperinflation ruins economies, it does not help them. Allow inflation to alter the price of unit and facility construction plus the research costs over time as the game progresses. Those who invite hyperinflation should pay the proper price of hyperinflated facilities and research items over time. Players who indulge in deflation will have cheaper costs over time but will have to pay the bills with deflated money. In both cases research and construction times will remain rather stable unless players invest more money in the proper places.
Thanks,

Eric Larsen

I'm nearly 100% sure that inflation is factored into prices, at least that of units. Facility construction, I've never really paid much attention to the prices anyway and research prices are just bogus anyway .

Can anyone back me up on this?

I can only assume the Original poster does NOT actually have the game yet.
As of the last update,hyperinflation was fairly well crushed.
The research driven economy is no longer the beast it once was.


Also, as your inflation goes up, you will generally also see your GDP/c go up.

This means the amount of money it costs to make the things that are required to make those units also goes up.

For instance.
Gdpc/ and inflation go up.
Cost of making industrial goods goes up.
Cost of making military goods goes up.
Cost of producing Oil goes up
Cost of producing ore goes up.
etc...

So the actual quoted cost of the item at the end doesnt have to go up, becuase the cost of the components goes up.
Hence though the qouted price to produce a unit doesnt go up, the actual price to produce that unit does ,as the cost to produce the components needed do go up.

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This post approved by Tkobo:Official Rabble Rouser of the United Yahoos
Chuckle TM

Ran a quick test just to make sure I wasn't blowing smoke. This is from a scenario I've had for a while in Montenegro. I raised taxes to 100% and dropped out all research funding to put the economy into a tailspin.

Date..........Inflation%......M-84A Unit Cost ($M)
Aug 24........47.2..............111.14
Sep 7..........43.3..............110.42
Sep 21........39.8..............109.54
Oct 5..........36.8..............108.53
Oct 19........39.1..............108.93

The last one was after I raised research spending back to the maximum and dropped taxes to 20%, just to make sure it was reversable.

EDIT: Sorry about the dots. The first time I posted it all the spaces I used to line it up got cut out, so I put the dots in instead.

Seydlitz,
Thanks for that quick test. It does look like military unit costs are tracking with inflation. But I don't think facilities or research items are. They seem to have fixed costs that don't change over time so I'll have to try some quick tests to see if over time they too change their prices but from my memory they do not. If they don't, hopefully BG will fix that so they work like military unit costs.

The problem is that if those research or facility costs stay fixed over time then high inflation becomes a cheat in order to falsely reduce research or construction time merely by using inflated money. It is good to know they have military unit costs tracking with inflation as that means BG has already solved the programming for one which means they can more easily replicate that very same programming solution for the other features to keep things fair.
Thanks,

Eric Larsen

tkobo,
You assume incorrectly that I do not have the game. I do indeed have the game, but for only about a month so I'm still learning the ropes so to say. I have been concentrating on figuring out how the economy works and if the underlying assumptions appear valid. So far I'm very impressed with how interconnected stuff is and how they are trying to minimize cheats by being able to max something out to gain some bogus advantage.

I tried eliminating investment in general tech level to keep research efficiency high and put as much manna into military unit research as possible to get them researched quicker. I kept wondering why my education infrastructure investment wasn't panning out as I had expected. So I tried changing my ratios to put a mere 10% into general tech level and was immediately rewarded with a point gain in my education. Investment in general tech seems to help improve the education infrastructure which then helps research efficiency. Interconnectivity is a wonderful thing and figuring our how the interconnections work is fun.

I didn't know that the military unit costs changed over time as I've eschewed making them in my voting victory scenario to concentrate on the economics. I have not seen the facility or research items change with inflation over time and this is the problem that needs solving. It appears that BG has done the trick once with the military units and now merely needs to replicate it for the other two items.
Thanks,

Eric Larsen

Seydlitz,
How the heck do you get those high inflation rates??? So far I'm an expert at making hyperunderinflation but I'm still struggling with making high inflation like you seem capable of. I hope you'll spill the beans and give this SR2010 learner a little helping hint. The manual says invest heavily in industry efficiency, up to recommended levels, yet I've never seen any recommended level marker on any of the industry panels for industry efficiency. It almost seems that the more I invest in efficiency the lower my inflation goes regardless of whether I jack up domestic markup or lower them.
Thanks,

Eric Larsen

You got this same conversation running in two posts.
So any replies I make will be in this one only.

You say youve got the game,have you updated it to the latest version ?

The research driven economy that once was possible in the game, that you say youve read about on the forums is no longer possible.

It was a design flaw in the game that ended in causing a bug.
The design flaw allowed inflation to get as high as 1000%+ and gdp/c could get well into the billions.Both these figures would bascially become runaways with no end in sight(til it caused the bug).
This could be caused by simply continually putting more and more money into research (and building more and more research facilities).
This meant that the economy under such a plan was based almost soley on research.
Hence the term i used to name it "research driven economy".


As some point during this, the huge numbers would cause a bug breaking the number scale.Which would than spread to every number shown even though they had no direct connection to the economic formulas.

The last update made this no longer possible ( as far as i can tell.Ive tried VERY hard to get it to happen since the update and had no success).

So, when you say a research driven economy and mention the old posts, understand that this is no longer possible in the game IF you have updated to the latest version.

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This post approved by Tkobo:Official Rabble Rouser of the United Yahoos
Chuckle TM

I watched research prices during my test last night. They do not change with inflation. Forgot about facilities though...

As for the high inflation, I just chose a poor, small country (Montenegro) and built as many research centers as possible and pushed the funding up to the max. Lowering taxes as low as you can without breaking the bank will increase the inflation effect, and raising domestic prices (but not too much, or else you'll reduce demand greatly) further fuels this. Even with such a high inflation rate, I was so poor in the beginning I'm still making nearly 100% profit on exports, even though my GDP/c has quintupled.

Overall, it just takes some playing around, and just letting it go. Don't bother trying to control inflation.

...I would tend to agree with Seydlitz' conclusion that you don't need to concern yourself with inflation overmuch with a few exceptions.

I have had regions operate just fine with inflation between 9 and 11% for long periods. If you've got everything else working - good DAR, good operating budget/revenues, you can somewhat disregard it. At some point the inefficency of this inflation will kick in.

Time seems to be more critical than cost in developing an offensive capability, and as long as you are generating the cash to develop your military assets at the desired rate - and pay salary and maintenance - it hardly matters what the amount is. Think in terms of percentages rather than absolute amounts.

As you [and most of us] have observed, economic cause and effect is less than linear or direct in this game, and it has only general relationship to real economics.

Don't worry - be happy.

_________________
Colorless green ideas sleep furiously [but otherwise, they do not worry and are happy].

Seydlitz,
I did the facilities check and here's the results:

Consumer Goods factory same hex
May 1 - inflation 4.0% cost $275.53
June 18 - inflation 1.9% cost 262.50
July 25 - inflation 1.2% cost 251.23

Sorry I didn't check the building after I finally got inflation rising slightly but I'd already built the factory. But it looks like facilities also track with inflation. I did check research and it doesn't track with inflation.

I can see where research is tougher when inflation is dropping as less money gets spent because the value of money drops. That means it takes longer to research an item under low inflation whereas high inflation actually decreases research time. Not really fair and hopefully research items will also track with inflation.

One thing I've seen is to wait and let inflation drop and then build military units and facilities just as inflaiton starts to rise again. You get the low, low prices and then as they're building they get the benefit of accelerated building due to more inflated money.
Thanks,

Eric Larsen

tkobo,
I'm getting rather annoyed with all this trash about I don't have the game or now you realize I do have the game but you think I'm too stupid to update it? Give me a break and a little credit and stop this stupid line of thought.

I may well have found some posts that described the game pre 1.3, but I did try to stay with topics only on page 1 and near the top and recent. While the game has been fixed to stop those 1000% inflations I still see that people are a bit too successful with economies running 20%+ inflation. That kind of inflation melts down economies, it does not build them up. That kind of inflation gets governments kicked out of office for fiscal mismanagement. In the game that kind of inflation really skews research times as they stay constant and with the vastly overinflated money research times drop unrealistically.
Thanks,

Eric Larsen

Sigh

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This post approved by Tkobo:Official Rabble Rouser of the United Yahoos
Chuckle TM

Eric...

In literary criticism we used to discuss the phenomenon of "willing suspension of disbelief."

Perhaps if you re-scale a bit you will be happier - some of these regions will run very nicely at inconceivably high inflation rates, with ridiculous tax rates, and at unemployment levels that are absolutely unreal.

The numbers you are looking should be taken as relative indicators. As suggested above, if you have the cash flow to make progress, don't look for any numerical consistency with reality.

Just as a test, I recently re-ran as Western Siberia, and in the first two years I managed to build all of the infrastructure I will need for two years into the future [very slowly, one at a time], get population up by about 1.5 million and rising, throttle consumer demand to match the infrastructure I could afford, and triple my armed services enlistment while building the equivalent of about 14 state of the art divsions or more, all with DAR holding steady above 42% for the second year, while advancing my research level a point [research was at max from day one, and never retreated, as was social spending, which is now holding at around 102% in all sectors], and acquiring all the techs I think I can use from allies and standoffs alike [it ain't cheap, but you can buy just about anything]. I am giving away oil to two dependent allies, because if I sell it all it depresses the market. Oh yeah, I have 30 trillion in the kitty for when I have to declare war on someone, and never once used any credit. My biggest problem is that I have drawn down the reserve pool so far that it can't keep up with my build rate - I am about 5th or 6th on the buildcap order [I destroyed about 9 points of initial buildcap, and later added 3 points]. My other problem is that nobody hates me enough to declare on me, and I have no belli against anyone except one remote region that I can't attack directly. So I will have to figure out how to provoke a war without losing WM favor. Inflation peaked at 11.8%, with unemp worst case at 3.1%. Inflation began working its way down in the second year and now stands at 8.8% [or so] with unemp around 3.8%. I'd be happy if Inflation just stood still, but it keeps going down, forcing me to rebalance commerce about every 6 weeks or so. It's possible to do this. Other players on this board could [if they were inclined] report even more astounding first two-year progress.

This is of course unrelated to anything in reality. I can't really believe I could do this either. Basically it's because I threw away everything I knew about economics [I am an options trader by avocation] and just played the game. Trust the force. Your DAR is a ver good indicator. When it turns negative, it's telling you to go re-optimize. Often this reoptimization means turning things off. I know that this sounds like a recession, but it it isn't.

Try this - keep an eye on just two numbers - production costs and domestic sales. I like to see domestic sales run about 120 to 145% of production costs. Use foreign sales to make up for tax revenue shortfalls once you achieve this cost/revenue balance. Good luck. Have fun. Be happy.

_________________
Colorless green ideas sleep furiously [but otherwise, they do not worry and are happy].

Seydlitz,
I have seen where building research centers is more efficacious at raising inflation. In my game as So CA in the US-CA scenario I start out as a big agrarian region, short on consumer goods, timber and water; and strong on food, petrol and military goods. I was able to halt the drop in inflation at 1.7% by building 2 research centers. I also built a consumer goods factory, about 6 good timber plants and 3 large water plants. I always look for the biggest plants AI can build to get the best effect from building production facilities. I also researched digital social services since that gives a 5% increase in education while dropping it's cost 5%. Seemed to actually do some good for my education and thusly my GDP/c.

I actually was able to halt the drop without going below about 21% domestic markup on food to about 38% markup on consumer goods and timber. I did increase research spending significantly from the beginning, but nowhere near maxed out. I managed this about 3 months into the game where I finally got my GDP/c rising at a good clip of about 15 points a turn.

The cost was a mere $65 billion annual deficit which was burning a hole in my treasury. I knew I had to back it off and actually managed to shed $40 billion of deficit in a month and still leave a reasonable 4.5 point increase in GDP/c per day. I finished the game after a year at 2.8% inflation and 5.7 unemployment, a real improvement over all of my other attempts. I even had a 110 credit rating and my last bond was reissued at 4.3%. I was able to add to my treasury each day, even running a $25 billion annual deficit, with my exports.

The manual says keep efficiency investment at recommended levels, which I take it to mean the middle of the bar. I even try to go over that and get efficiency in the low to mid 90's. It almost seems like that's counterproductive as that really kills profit margin by jacking up production costs. Does jacking up efficiency help add employment? To me it would seem that the more I jack up efficiency investment the more workers I'm adding to the mix but it almost doesn't seem to pan out. If that were the case then adding more production/resource facilities should also help jack up employment but it sure doesn't seem like it to me. It almost seems like it's better to pare down production/resource facilities and jack up efficiency to keep the profits from domestic sales up so that that extra profit creates more jobs who knows where.

So do you also eschew researching units and just splitting between research efficiency and general tech level at the beginning? Does that also help jack up the education rating quickly? I also found that running up my immigration fee to about $23,000 to $28,000 helps keep my GDP/c and literacy rating higher. Then on the 12th I drop back to zero to get my WM manna cheaper and then on the 15th I jack it back up again.
Thanks,

Eric Larsen