Let me explain to you where we do come from. Last year, or a bit earlier, in higher difficulties, players faced what we called the AI carpet, since their units filled the map. Trying to limit their numbers to human measures, we first tried with the supply limit, but it turned out to be insufficient since AI would simply replenish all of its loses in no time.
Then Gazebo introduced an economic penalty for prolonged bloody wars, which was intended to prevent AI producing units non stop, and it worked.
So here's where we are now. If you don't want to cripple your economy, stop fighting while you are still in green.