Economics Modcomp discussion

[Afforess]

So guys, the time is counting. Any disagreements? Any addons? Speak now, or silence forever. I mean, not forever, at least to the next version of AND.

You guys still have some time, I want to get AND 1.60 released. I'm in full force bug-fix mode.

 

[sugarfree]

I agree here with konradcabral. I don't see anything wrong on seeing the inflation in the civics screen. Perhaps we could avoid showing the percentages, and put verbal expression instead, similar to upkeep.

Meanwhile, some suggestions on the civics provided that we agreed on balancing a little bit:

Spoiler :

Barter
- No upkeep
- -25% gold in all cities
- No inflation
- -10% gold from Market (total 5%)
- -30% gold from bank (total 0%)
- -25% trade routes yield
- -75% foreign trade routes yield

Assisted Barter
Reqs Trade
- Low upkeep
- Player will choose a resource to be the country's "currency", the country cannot have more than 1 of the chosen resource; if another unit of the same resource is discovered or extracted or traded in will cause +25% inflation rate per 10 turns
- Will consume 1 Fur or 1 Gems or 1 Gold or 1 Iron or 1 Ivory or 1 Lead or 1 Marble or 1 Obsidian or 1 Pearls or 1 Salt or 1 Silk or 1 Silver (didn't put any post-calendar resource because Currency generally comes before than it)
- -15% gold in all cities
- -50% inflation rate
- -5% gold from Market (total 10%)
- -30% gold from bank (total 0%)
- -10% trade routes yield
- -25% foreign trade routes yield

State Coinage (sugarfree’s National Mints) (requires gold or silver or copper or iron to adopt)
Reqs Currency
- Low upkeep
- +3% gold with gold
- +3% gold with silver
- +2% gold with iron
- +2% gold with copper
- +15% inflation rate

Noble Metal Standard (requires gold or silver to adopt)
Reqs Aesthetics
- Medium upkeep
- Player will choose whether Gold or Silver will be the standard noble metal, player must have access to that resource
- +3% gold per standard resource (up to +15%)
- +25% foreign trade routes yield per standard resource if partner uses noble metal standard with same resource (up to +125%)
- -25% inflation rate
- +10% inflation rate per standard resource (up to +50%) ...with 5 sources, total inflation rate +25%
- -5% from Jewellery (total 5%)

Private Coinage (sugarfree’s Market Enterprise)
Reqs Guilds
- Low upkeep
- +25% hurry cost
- Goldrushing has half effect on inflation
- -10% inflation rate
- +10% from Bank (total 40%)

State Bank
Reqs Nationalism
- No upkeep
- +20% gold
- +100% inflation rate
- -50% hurrying cost
- Goldrushing, if possible, has triple effect on inflation
- -10% from Bank (total 20%)
- +25% foreign trade routes yield
- extra -1 relationship penalty from trading partners for aggressive monetary policy

National Reserve System
Reqs Applied Economics
- Medium upkeep
- +15% gold
- +10% from Bank (total 40%)
- +10% inflation rate
- +50% foreign trade routes yield with each partner if they use National Reserve System

These are some suggestions, it actually comes back to my first intentions. I wrote this in hurry (yea I am inflating ), so it's unlikely perfectly balanced.

 

[Praetyre]

If I may offer a few suggestions, Barter, Assisted Barter and Private Coinage should disallow the Central Bank wonder. Also, I think "Independent Central Bank" is a better term for National Reserve System.

Why exactly would anybody choose Assisted Barter? As it is, it's outmatched even by Barter.

 

[sugarfree]

If I may offer a few suggestions, Barter, Assisted Barter and Private Coinage should disallow the Central Bank wonder. Also, I think "Independent Central Bank" is a better term for National Reserve System.

Why exactly would anybody choose Assisted Barter? As it is, it's outmatched even by Barter.

Good point, I reduced the inflation for Assisted barter in my suggestion post above. Thanks.

 

[konradcabral]

These are some suggestions, it actually comes back to my first intentions. I wrote this in hurry (yea I am inflating ), so it's unlikely perfectly balanced.

Agreed with all changes, just explain the thoughts behind 2 of them: why State Bank has no upkeep and why NRS has a positive modifier for inflation rate? I thought that the acting of a CB was a help to combating it. What am I missing here?

 

[sugarfree]

Agreed with all changes, just explain the thoughts behind 2 of them: why State Bank has no upkeep and why NRS has a positive modifier for inflation rate? I thought that the acting of a CB was a help to combating it. What am I missing here?

1. I thought when control the central bank, you don't need to spend single penny from treasury to maintain it. Any money needed for maintenance can be issued by the bank. My idea was also to maximize the immediate profit and transform the costs into inflation. This should affect strategy.
2. Well, the target of most of the central banks in real world is to keep the inflation sustainable at about 2%. They say so, and they might be even trying to do so, but if you look at the graphs of inflation in US after abandoning the bretton-wood system, the inflation was rising since. But I am not really an expert on this issue, so if you prove me wrong, I'll listnen

 

[konradcabral]

About the #1, I understood and agreed. But about #2 I still think that it should be a minus modifier to inflation. The recent behavior of FED doesn't justify a +%, they are just tolerating a bigger inflation in order to achieve a better GNP growth %. IMHO, an economy with a CB taking care of inflation will have a smaller one than if it hadn't.

 

[sugarfree]

Man I think we misunderstand each other. Basically it's my fault, because now I realize how wrong i named the FED civic. In my list, I put the gold standard and FED as opposing civics. That is kinda absurd, because FED was created in 1913 as a central bank to maintain the gold standard in the US. Bank of England was also a central bank maintaining gold standard for over 2 centuries.

So what I am arguing here is not the existence of a central bank, but the fact that today's money are just piece of paper, nothing more. In contrast to gold standard, this is often referred as paper standard. I don't say it's bad - it creates a lot of opportunities to stimulate the growth by controlling the amount of money in circulation, but this often means that the money volume grows in advance to the economy, therefore it creates some inflation. Not to mention, that even independent central banks are constantly under some kind of political/lobbystic pressure. And for politicians, inflation is not dirty, because it is, in fact, a hidden tax.

 

[NBAfan]

What is point of Speculator? It seems a little redundent.

 

[Praetyre]

It represents the development of the holding of stocks and shares, a relatively recent economic concept that vastly postdates merchants. There's a difference between someone who sells goods, like the Walton family or Bill Gates, and someone who invests in stocks and shares, like Warren Buffett or George Soros.

 

[konradcabral]

But I thought that we were representing paper standard in both civics, State Bank and NRS. State Bank, in my mind, was kind of a "Friedman" CB, for which inflation isn't too bad, and NRS represents a CB who seeks an "Inflation Targeting", the way we have in Brazil and EU (if I'm not wrong).

 

[Praetyre]

I thought State Bank was the pseudo-gold standard adopted by the US from the 1890s til 1971, when Nixon did away with gold altogether.

 

[sugarfree]

But I thought that we were representing paper standard in both civics, State Bank and NRS. State Bank, in my mind, was kind of a "Friedman" CB, for which inflation isn't too bad, and NRS represents a CB who seeks an "Inflation Targeting", the way we have in Brazil and EU (if I'm not wrong).

Dude I don't really think that Friedman would like what you post here He was one of the greatest promoters of strict monetary policy. Later on, he even proposed abandoning the FED, because it didn't manage to control the inflation sufficiently. He suggested installing a computer program controlling the money supply with strict rules. That actually might be a cool idea for a future monetary civic.

 

[sugarfree]

I thought State Bank was the pseudo-gold standard adopted by the US from the 1890s til 1971, when Nixon did away with gold altogether.

Sorry man, I have no idea what do you mean. As far as I know, the only central bank running in US these times was FED. Could you post a link or something?

 

[sugarfree]

Just to make it clear, I'll explain here in detail what I intented by these 2 civics:

State Bank - paper standard central bank controlled, or at least severely influented, by government. An extreme example of this is the famous Reserve Bank of Zimbabwe.
National Reserve System - paper standard central bank running with high level of independence. An example could be the FED, ECB or in my country it's the Czech National Bank. Note that it's hardly possible to accomplish absolute independence, because the bank representatives are under constant political pressure.

 

[Praetyre]

The Federal Reserve was created in 1913. I think I recall hearing something about the gold standard being changed in the 1890's, probably through Theodore Roosevelt's presidency. I still think "Independent Central Bank" is a much better name that more clearly conveys what kind of monetary system you are describing, but, in the end, it's Konrad's call.

Shouldn't paper-money economies have less cost to rush countered with higher inflation from rushing? Seems like a decent representation of how it's a hell of a lot easier to print paper (even easier with a digital economy) than it is to mine gold or silver or get new buckskins, and it would put a lid on some of the more extreme warmongering by aggressive players, who'd have to choose between guns and butters in the long run.

 

[sugarfree]

The Federal Reserve was created in 1913. I think I recall hearing something about the gold standard being changed in the 1890's, probably through Theodore Roosevelt's presidency. I still think "Independent Central Bank" is a much better name that more clearly conveys what kind of monetary system you are describing, but, in the end, it's Konrad's call.

Yeah, as I stated above, the name is roughly inaccurate. I firstly named it Federal Reserve System so that players can imagine what does it mean. I think even "Independent Central Bank" is no good, since it doesn't describe the way money is created. I'd go for something like "Independent paper standard" or similar. Any ideas?

Shouldn't paper-money economies have less cost to rush countered with higher inflation from rushing? Seems like a decent representation of how it's a hell of a lot easier to print paper (even easier with a digital economy) than it is to mine gold or silver or get new buckskins, and it would put a lid on some of the more extreme warmongering by aggressive players, who'd have to choose between guns and butters in the long run.

There is already a -50% goldrush cost with State Bank Civic (again, any ideas for new name?) that has triple effect on inflation increase. I think it pretty demostrates the process you mentioned.
Regarding to National Reserve System, this is not the way it should work here. If you, as ruler, have only little influence on the central bank, it can hardly help you with goldrushing.

Just one more comment about your idea of mining gold to goldrush. If you decide to goldrush, you cannot do that unless u have reserves in your treasury. Hence it's not about mining gold, it's about making savings, or importing the gold.

 

[konradcabral]

Dude I don't really think that Friedman would like what you post here He was one of the greatest promoters of strict monetary policy. Later on, he even proposed abandoning the FED, because it didn't manage to control the inflation sufficiently. He suggested installing a computer program controlling the money supply with strict rules. That actually might be a cool idea for a future monetary civic.

My mistake then. Sorry Milton. I spoke that based on his version of Phillips Curve, which was later improved.

About the NRS civic, we shouldn't take USA as a parameter because USA has a particularity, the dollar is the global reserve currency. ECB and even the Brazilian CB are better examples of CBs compromised to inflation targets. And the monetary computer can be simulated inside the NRS, maybe with a bonus with Computers or later techs.

 

[sugarfree]

My mistake then. Sorry Milton. I spoke that based on his version of Phillips Curve, which was later improved.

About the NRS civic, we shouldn't take USA as a parameter because USA has a particularity, the dollar is the global reserve currency. ECB and even the Brazilian CB are better examples of CBs compromised to inflation targets. And the monetary computer can be simulated inside the NRS, maybe with a bonus with Computers or later techs.

Ok, but still FED is the only institution allowed to issue new dollars. What makes the difference? IMO once you give any bank ability to arbitrarily issue new uncovered money to lend it for interest, you won't ever get rid of the inflation. Btw Phillips Curve was proven to be kinda bu.lsh.t.

 

[civ_king]

perhaps the superpower's currency is used as a reserve causing benefit for you?