Hyperinflation and LF?

[Biges]

Hi!

I noticed the hyperinflation "invention" has +2% chance to fire with LF policy. Does anybody know the logic behind this?
I think it should be just the opposite, I mean hyperinflation most likely occurs because of government just printing money, which is more domain of more controlled economies.

But maybe I'm mistaken. (And not that it would be of much importance, the event would fire anyway eventually.)

 

[Sturmwaffles]

Happens during economic downturn; most often caused by Capitalism... . I win at derailing.

 

[Sid Meier]

Weird, as I don't think LF should result in hyperinflation, hyperinflation is a result of a government printing too much money without an adequate means to empty the currency traps.

 

[Biges]

Yep, that's why I'm also confused, but that's what it says:

hyperinflation = {
limit = { market_determined_exchange_rates = 1 }
chance = {
base = 2
modifier = {
factor = 1
economic_policy = laissez_faire
}
modifier = {
factor = 2
war_exhaustion = 4
}
}
core_pop_consciousness_modifier = 0.01
effect = {
factory_cost = 0.1
}
}

 

[calvinhobbeslik]

What all of you have filed to mention is that the effect of the invention has nothing to do with it's name. IIRC, it either increases tax efficiency or reduces loan interest

 

[Biges]

What all of you have filed to mention is that the effect of the invention has nothing to do with it's name. IIRC, it either increases tax efficiency or reduces loan interest

Maybe it is you, who are mistaken, let mi pinpoint the effects for you

factory_cost = 0.1

= +10% factory cost

 

[s1234567890m]

does factor 1 effect the base?
there multiplicative arent they?

 

[GAGA Extrem]

No, not in case of inventions.

 

[Fenrir 1576]

Well, there's only a few countries, that I know of, who've experienced inflation to the extreme of deserving the prefix hyper, and those would be the CSA and Weimar Germany (if there are more or better examples, feel free to say so) both of these nations, as far as I'm aware, were pretty hands off in terms of the economy, maybe not laissez faire for Weimar, but definitely for the CSA. Really though, both of these countries have a far better reason for why they printed so much money and thus experienced hyperinflation, both were, or very recently were, at war and one was being forced to pay massive war reparations. Maybe the laissez faire part could be removed and replaced with an "is at war" kind of trigger, and a modifier that would trigger it fairly rapidly (like a 5% increase for the invention) would be if the nation is disarmed and therefore paying reparations; maybe even another modifier on par with that one for if they're bankrupt, but that's neither here nor there.

 

[Seek75]

CSA was not hands off in terms of the economy. Neo-confederates like to boast about it being so, but it wasn't at all.

 

[unmerged(152996)]

Perhaps the logic is that more interventionist economies can price-fix, and thus mitigate or postpone the effects of inflation. Whereas a Laissez-Faire economy doesn't have the policy tools to restrain runaway price expectations.

I know that in revolutionary France, the government responded to extreme inflation (they seem to have dodged true hyper-inflation, if I recall correctly) by periodically fixing the price of staples.

EDIT: But I'd agree that simply adding 2% for LF seems strange to me. I'd make it so that the only positive influence is economic duress (war exhaustion, extreme deficits, recent bankruptcy?), and perhaps add a negative influence for more interventionist governments.

 

[Syntax Error]

Well, there's only a few countries, that I know of, who've experienced inflation to the extreme of deserving the prefix hyper, and those would be the CSA and Weimar Germany (if there are more or better examples, feel free to say so) both of these nations, as far as I'm aware,

Zimbabwe?

http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

The US also experienced a lot of inflation (or rather, lack of faith in currency) during the American Revolution when the Congress resorted to printing Continental Dollars to fund the war effort, bringing about the phrase "not worth a Continental".

 

[Biges]

Zimbabwe would I describe as interventionist at best. Probably more like state capitalism.

 

[Wminus]

well I'm not studying economics, but it seems to me that it is totally irrelevant if a country has LF or interventionist economic policies.

Hyperinflation is always a result of government mass-printing money, which LF govs are just as inclined to do as state capitalist ones if the need arises.

Price fixing makes no sense in the event of a hyperinflation. Remember, hyperinflation always are a result of a massive increase in the supply of money.

 

[Nuukov]

Perhaps, just maybe, all the swedish-commies that made this game hate LF?


/jk hehehehe

 

[Biges]

well I'm not studying economics, but it seems to me that it is totally irrelevant if a country has LF or interventionist economic policies.

Hyperinflation is always a result of government mass-printing money, which LF govs are just as inclined to do as state capitalist ones if the need arises.

Price fixing makes no sense in the event of a hyperinflation. Remember, hyperinflation always are a result of a massive increase in the supply of money.

Maybe you don't study economics, but you understand it better than many politicians do.

 

[unmerged(152996)]

well I'm not studying economics, but it seems to me that it is totally irrelevant if a country has LF or interventionist economic policies.

Hyperinflation is always a result of government mass-printing money, which LF govs are just as inclined to do as state capitalist ones if the need arises.

Price fixing makes no sense in the event of a hyperinflation. Remember, hyperinflation always are a result of a massive increase in the supply of money.

Actually, the crude quantity theory of money (1 to 1 relationship between money supply and prices) has some difficulty explaining the 'real' danger of hyperinflation. Namely, if the government could simply stop printing money, there is still a danger of inflation continuing to increase. Because the population expects inflation to continue at the same rate, they raise their prices regardless of what the money supply actually does.

Price fixing is actually a very common-sense solution to unchecked inflation: Prices keep going up faster than wages? Then force sellers to accept an "appropriate" price for their goods, regardless of how much that money is worth. Now, it's not a sustainable solution to inflation, given the market will eventually have to correct. But if the government can some how put the breaks on price-inflation temporarily, there could be more time for wages to catch up to prices and smooth out the situation.

I'm a student of microeconomics and not macroeconomics, but this response is mostly coloured by my study of economic history.

 

[rmax92]

CSA was not hands off in terms of the economy. Neo-confederates like to boast about it being so, but it wasn't at all.

They may have not intervened in the economy directly (subsidies, targets, quotas, etc) but they did have legal tender laws for fiat currency as they were running out of money during the civil war.
As money is half of every transaction, thats a massive distortion of the market.

 

[Biges]

BTW, I have MD in economics (and micro- and macro- together), but there is nothing like history examples. In communism, inflation was considered non-existent, however price had been rising as well as wages. Price rising was explained as " product innovation". And anyway, price fixing resulted in product shortages and subsequent briberies, i.e. to get certain good you have to pay the seller something extra. Thus product mechanism in communism and so much for equality...

Anyway, I think to tie hyperinflation to war weariness gives more sense.

 

[unmerged(152996)]

I'd agree the tie to LF is somewhat tenuous. I do think there is room for different probabilities based on government policies, but the boat isn't going to tip without throwing a wave at it.

Since I felt like rereading it anyway, cite on revolutionary France's price controls and the mitigation on inflation: "The French Revolution and the Politics of Government Finance, 1770-1815,"
Eugene Nelson White