Is it good to maintain SOME inflation?

[unmerged(49829)]

A bit clearer, but still wrong.

1% inflation + Loss of one year's research = Staying alive and not losing a province or two to my enemies in this war.


This may be a very necessary equation to accept. But you have not "gained" anything.

It may be worth it if it helps you win a war that gets you choice gold or COT provinces, or if you use it to be some sort of manufactory that will expand your economy and increase your total research output. I think it really depends on how much money you get for each point of inflation, and how much the money helps your economy expand through conquest or development.

You can gain in the long run if conditions are right. I don't think he is wrong for saying it is sometimes worth it, but YMMV.

 

[Raen]

A bit clearer, but still wrong.

Let's take a concrete example. It's mid-game, and England is pulling in an Annual Income totalling 1000d (monthly plus yearly). I have a choice this year: I can divert my monthly income for one year to the Treasury (which will give me an added 800d, let's say), but the "cost" will be that I will have my inflation score increased by 1%.

I'm glad you're understanding better, but you're still confused.

There are two separate issues here which you, along with a few other people in this thread, are confusedly thinking of as one.

First, there's the issue of diverting money from research into the Treasury. The way the game works, with the slider system, this would occur EVEN IF THERE WERE NO INFLATION. The loss of research dollars has nothing whatsover to do with inflation per se, it's simply a result of trying for a larger Treasury. The two issues are interconnected, sure, but they're still separate things.

The original poster wasn't asking about diverting money from research to the Treasury. Presumably he already understands that dynamic, it's not a difficult one to grasp. He was asking about inflation and whether those inflated prices on things were going to hurt him. To which I replied no, you may actually be coming out ahead on the deal. That he's lost research dollars is entirely irrelevant to this discussion of inflation and its effects.

Incidentally, I know you just pulled figures out of the air for your example, but they're way off. I just tried an early game Muscovy with a yearly income of about 150d (it's been expanding). If you move the treasury slider all the way to the right (which I am not advocating, incidentally), so that all the other sliders move to 0, your monthly income will add up to 450d over the course of the year. That's a lot of cavalry. Cavalry that could be used to gain additional provinces. Provinces that provide additional income. It's a complex game.

 

[artemis667]

Another note about minting that I keep in mind in my games.
Your income will naturally fluctuate throughout the game. Some periods you will have higher income than others (e.g. you have plenty of merchants established in COTs and stability +3). Others times might not be so good, you might have war exhaustion and low stability. If you mint during *those* times, you incur the same inflation but your cash return will be poor.
So, in a perfect world, you will keep your minting to rich times only and have a 'war chest' on hand for cash when you need it to get out of a situation. This rule won't apply always of course, sometimes you just *need* the cash, but if you keep deliberate minting to periods where your monthly income is relatively high you'll get more cash for your inflation.

 

[unmerged(49508)]

My point was that the extra they spend for these things may be less than the amount of money they have gained by minting it.

Putting this argument into DSYE's numerical example you say that the money minted (800d) can be more than the extra cost due to inflation (500d) This seems to be true, but the alternative of minting and thus netting a 300d income to the treasury is to invest 800d in technology research. The research lost is always more, than the net income to the treaury. No one argues, that with the extra 300d in hand one can do wonders, that overcompensate the loss of 800d in research, but the point you made was that 300d (or any positive number!) in the tresury was better than 800d put into research.

 

[Raen]

Putting this argument into DSYE's numerical example you say that the money minted (800d) can be more than the extra cost due to inflation (500d) This seems to be true, but the alternative of minting and thus netting a 300d income to the treasury is to invest 800d in technology research. The research lost is always more, than the net income to the treaury. No one argues, that with the extra 300d in hand one can do wonders, that overcompensate the loss of 800d in research, but the point you made was that 300d (or any positive number!) in the tresury was better than 800d put into research.

No, that was never my point. To my mind, taking the money out of research to put it into the treasury has nothing to do with inflation (aside from the fact that it makes it rise).

The original poster asked if he needed to keep his inflation at 0% and there was some discussion about the random events that reduce inflation. It seemed clear to me that some were worried about the increased cost of items you might purchase with treasury dollars, so I responded as I did.

If he had been more interested in the importance of research, then I submit he would have asked "Is it ok to take money out of research to put into the treasury?"

 

[lordofthemark]

Actually, major powers are the least likely to suffer from inflation needs. If you are inflating as France, it's because you are pushing too hard. however, 10% inflation isn't serious from ANY point of view, not in the mid-1500's.

Well thats the point isnt it? inflation between 5% and say, 15% isnt serious, but it IS high enough so that I benefit from inflation reducing events. Im not saying (which i think is so self evidently wrong that it doesnt need to be denied) that you should have positive inflation just to get the benefit of the events - but given that there is always stuff to be built, and given that with good management of research you'll often be in a position where youre getting ahead of time penalties, it seems that minting to 5% infl or higher (less under 1.09) is not an unreasonable approach.

 

[DSYoungEsq]

Incidentally, I know you just pulled figures out of the air for your example, but they're way off. I just tried an early game Muscovy with a yearly income of about 150d (it's been expanding). If you move the treasury slider all the way to the right (which I am not advocating, incidentally), so that all the other sliders move to 0, your monthly income will add up to 450d over the course of the year. That's a lot of cavalry. Cavalry that could be used to gain additional provinces. Provinces that provide additional income. It's a complex game.

You, sir, I am afraid, are the confused one, as this shows.

Your Annual Income is not equal to your Census Taxes. They are simply your "yearly" income, the stuff you get on Jan. 1. Your Annual Income is the sum total of all that you got in the way of income during the prior year, Yearly Income included. In short, it is what you find as a total at the bottom of the Ledger's page breaking down your current and past year income.

In your example, you have simply shown that you have converted 450d of income from expenditure on research to expenditure on whatever it is you want to spend your Treasury on (gifts to the neighboring king for sending you high-class whores, if you prefer ). But, you always HAD that 450d. It isn't new, it isn't a "gain" and it isn't coming to the Treasury without a "cost." The "cost" is, as I said, in two parts, inflation and lost research.

The Original Post, by the way, never asked anything about a cost to inflation; the poster just wanted to know if there was some good reason to incur inflation simply to be able to take advantage of the random deflationary events. Your first post asserted

The fact is that you may actually be effectively LOSING money if you keep your inflation at 0%. Don't forget that, although inflation does make you pay extra for things, you are also gaining money by minting it.

Presumably the point you are trying to assert is that, if you don't convert money to the Treasury, you may not be able to engage in activities which have the benefit of increasing your annual income. If that was your point, well, my apologies: we've all essentially been saying that for all the posts after the original post. After all, that's the most classic computation most people make about minting to produce enough money to build a manufactory. But your statememt appeared to advocate that you "gain" money simply by the act of "minting," which might well be of greater value than the inflationary cost it occurs. This, of course, is incorrect; if you leave that money in the Treasury, or spend it upon useless endeavors, or let it be taken by random event, you won't find that it did you an iota of good.

As for what the OP was "accepting" when it comes to diversion of funds from research, I consider your assumption quite, um, optimistic. Quite a few people never quite grasp the inherent evil to "minting" money; lost research cannot ever be made up. The very difficult calculation of determining whether or not your future income stream will allow you to accellerate your research curve to a point you wouldn't have reached had you stayed with the status quo is always a subject of some lively debate around here, good for a week or two of animated discussions. :rofl:

 

[unmerged(49508)]

No, that was never my point. To my mind, taking the money out of research to put it into the treasury has nothing to do with inflation (aside from the fact that it makes it rise).

The original poster asked if he needed to keep his inflation at 0% and there was some discussion about the random events that reduce inflation. It seemed clear to me that some were worried about the increased cost of items you might purchase with treasury dollars, so I responded as I did.

If he had been more interested in the importance of research, then I submit he would have asked "Is it ok to take money out of research to put into the treasury?"

OK, I try again. In the first scenario you mint. Lets remain with the same numbers, so you get 800d to your treasury. You pay 500d more for things in the next few years because of the inflation. Your gain is 300d. In the second scenario you don't mint so no extra income and no inflation, so the net is zero. You compare the 300d to 0d and you claim that minting can be profitable. You separated the issue of technology investment from minting and forgot about that in the first scenario there is no investment into tech, while in the second research progresses with 800d.

I am sure you did not mean to tell such a silly thing, but that's what you did in your first post in the thread. I appreciate your effort to help a rookie to understand a complex issue, but your post was confusing, apparently not only for me.

 

[Raen]

I give up. I'm tired of writing about this. :wacko:

For the final time:

I understand that the money comes from research. I have ALWAYS understood that the money comes from research. My point was ONLY that which was demonstrated by the 800 - 500 = 300 example earlier in the thread. That is, that if you're staring at 5% inflation, it's not as bad as it looks, because you have received more money (YES, by taking it away from research, but I am only talking about the Treasury) than you have to spend extra money.

If I phrased that poorly, I apologize.

I would be unhappy if newbies took from all this that they should, after all, keep inflation at 0%. There are too many times when that's not the best strategy.

 

[unmerged(7996)]

I give up. I'm tired of writing about this. :wacko:

Raen, Not much has changed over the years, eh? This conversation always seems to lead to arguements of one form or another.

For what my opinion is worth :rofl: ...I thought your point about trying to incur inflation while your economy was doing well instead of when it is doing poorly was a good one that should be useful to newbies - value added.

The funny thing to me is that everyone seems to agree in general but fights over the down in the weeds details. Some inflation is okay but when and exactly how much are debateable.

For the sake of personal nostalgia: My worst inflation game (that I kept) was with Georgia and Armenia's gold drove my poor, poor economy through the floor but was a necessary evil. I wound up with 53% inflation and was only ever able to clear it by colonizing and building governors (sidebar: old rule was that each new governor reduced inflation by 1%...sort of a cheat IMO. The new rules are much better).

 

[unmerged(45766)]

I give up. I'm tired of writing about this. :wacko:

For the final time:

I understand that the money comes from research. I have ALWAYS understood that the money comes from research. My point was ONLY that which was demonstrated by the 800 - 500 = 300 example earlier in the thread. That is, that if you're staring at 5% inflation, it's not as bad as it looks, because you have received more money (YES, by taking it away from research, but I am only talking about the Treasury) than you have to spend extra money.

The truth is that all depends on what you do with the money you minted. To be a profitable operation, you need to invest that money on things that will give you a higher return, compared to the "costs" of your operation (both in lack of research and inflation, as well as actual money you paid). That's what DSYE is telling you, and that's pretty much what everybody who's knowledgeable about this game will tell you. And this is, IMHO, what you're failing to understand. You can't, in such a matter, look at only a part of the game, for every act has many consequences. Telling to a newbie that inflation is not bad, without teaching him how to make a good investment to counter that inflation, is the worst "help" you could give him.

 

[unmerged(3931)]

When it comes to noobies, I would still say do not be tight about inflation if you are below 2% inflation. Mint money as soon as you think it is an opportune time. Spend the money on what you think is the best.

That is better than saying do not mint money. Noobies might not make the best choices. However, you can only learn by doing.

 

[DSYoungEsq]

Virtually no one, myself included, said, "Don't ever incur inflation." :wacko:

The issue in the OP was, however, the horrible concept of incurring inflation solely to take "advantage" of certain random events. That, IMHO, is stupid.

The issues of inflation and lost research progress are inextricably linked with the issue of opportunity cost. It is a good thing everyone finally appears to be on that same page.

 

[lordofthemark]

Virtually no one, myself included, said, "Don't ever incur inflation." :wacko:

The issue in the OP was, however, the horrible concept of incurring inflation solely to take "advantage" of certain random events. That, IMHO, is stupid.

The issues of inflation and lost research progress are inextricably linked with the issue of opportunity cost. It is a good thing everyone finally appears to be on that same page.

the benefit of minting is the value of whatever you do with the money (manu, war, colonies, whatever)
The costs are lost research, and inflation (which increases the costs of most everything you do)

The existence of certain events that randomly reduce inflation, but which cant bring it below zero, reduces the net cost of inflation (but NOT of foregone research) when the level of inflation is at or below the size of the reduction. Now the event is not THAT common (but its not rare either - i think ive gotten at least one in every game, and sometimes several) OTOH the value of it has been reduced in 1.09 (but some of us are still playing 1.08)

Do a thought experiment. Suppose the excellent year event happened, on average, every 3 years. Wouldnt you then pretty much discount inflation as a cost of minting, and only weigh the benefits of investments against the foregone research? Well of course its not that common - so the event is a relatively minor consideration, but its still a consideration.

 

[DSYoungEsq]

the benefit of minting is the value of whatever you do with the money (manu, war, colonies, whatever)
The costs are lost research, and inflation (which increases the costs of most everything you do)

The existence of certain events that randomly reduce inflation, but which cant bring it below zero, reduces the net cost of inflation (but NOT of foregone research) when the level of inflation is at or below the size of the reduction. Now the event is not THAT common (but its not rare either - i think ive gotten at least one in every game, and sometimes several) OTOH the value of it has been reduced in 1.09 (but some of us are still playing 1.08)

Do a thought experiment. Suppose the excellent year event happened, on average, every 3 years. Wouldnt you then pretty much discount inflation as a cost of minting, and only weigh the benefits of investments against the foregone research? Well of course its not that common - so the event is a relatively minor consideration, but its still a consideration.

Actually, damn the search function, there is a thread that I recall from about a year ago where someone figured out how often that event showed up. It worked out to about every 75 years or so.

The trouble with the calculation, of course, was that, while it made it possible to figure the "true" cost of inflation, the really greater factor is lost research. It's the deccelleration of your research efforts that is the worst effect of minting, because that factor has an exponential effect. It's against this loss that you calculate the value of your expenditure of research money on non-research items; hopefully you end up with your research eventually back ahead of where you would otherwise have been.

Of course, the great thing about EU2 is that you can say damn it all to inflation and just incur it on just about any justification you desire. For example, those slimy bastids across the Hellespont have taken my holy province and I'm dammit gonna get it back pronto!!!!!!

 

[unmerged(45766)]

Actually, damn the search function, there is a thread that I recall from about a year ago where someone figured out how often that event showed up. It worked out to about every 75 years or so.

Easy to compute, based on the Random Events FAQ - chapter on Economy.
Suppose an average of 100 events available at all times, with 1 event firing every year. Each event has a 1% chance of firing each year, and should on average fire once per century.

At any given time, two Exceptional Years events are available. So, on average, two of them should fire each century, or one every 50 years.
Moreover, three additional events are available after 1600, 1650 and 1750.
So, from 1600 to 1650, you should get 1.5 of them, 4 from 1650 to 1750, and 2.5 from 1750 to 1800. Add the 2/century for the XVth & XVIth centuries, that's 12 events on average in a GC.


PS: careful, the FAQ is for 1.08, so the amount of inflation decreases differ.

 

[lordofthemark]

The trouble with the calculation, of course, was that, while it made it possible to figure the "true" cost of inflation, the really greater factor is lost research. It's the deccelleration of your research efforts that is the worst effect of minting, because that factor has an exponential effect. It's against this loss that you calculate the value of your expenditure of research money on non-research items; hopefully you end up with your research eventually back ahead of where you would otherwise have been.

wouldnt it be clearer to say that the principle cost of MINTING is the lost research?