Money Flows & Creation

[HappyBanker]

From what I read in previous DD's the money in Vic2 is not going to appear from nowhere or fade away anymore. That's great, and is a huge improvement to the model in my opinion. But it also raise a quite numerous number of questions for me... that should be answered in upcoming DD's but I just can't wait to talk about it .

Examples :

-Where is the money going when the player construct things like fort or naval bases ? It could go to Capitalists but there might not be any in the state... The construction could also "only" cost materials. But that seems a little too easy and I suspect they have a better idea , or you have...

-If new money is only created in link with Gold/Precious metal production this means that only countries actually producing gold will be able to create new money (if this is right), and I am really wondering what kind of effect this could have on balance... Moreover will this money production system will be enough to sustain the natural population growth of the period (more people = larger money needs).

Any idea on this ?

 

[unmerged(63310)]

Where did you see a link with precious metals production to money creation? As far as I understood it the basis of money creation was going to be all RGOs production so it is easy to maintain money supply growth. IE- RGO produce output without any cost of input aside from labor. The WM takes all that output and puts a price on it. As population grows in the game so does infrastructure and techs which raise output of RGO.

Every other function using money is a transfer only the RGO to WM create.

Although the question about building factories/forts/naval bases etc is interesting. I wouldn't mind seeing a labor cost in addition to materials to build a factory and it would seem quite easy to do plus make some interesting decisions if expanding a factory has cheaper labor cost than building a new one.

 

[ArneHD]

Also, slightly, but not really related: what happens if a player cheats and gives themselves massive amounts of money? Will this destroy the world economy?

 

[unmerged(63310)]

Also, slightly, but not really related: what happens if a player cheats and gives themselves massive amounts of money? Will this destroy the world economy?

I think it would depend on how player spends it... basically it wouldn't go directly to the POPs unless the player used it to max all labor reforms but even then its only a single country so the world wide affect would be limited. The most destructive thing a player could would probably to set all stockpile limits very high and create extra demand though if the limit of 1,000 persists from V1 even that wouldn't have much effect. For instance just how many things are there for a player to spend money on?

If direct money transfers/gifts are allowed between nations then a player might cheat add money and then gift it to other nations and overheat the world economy that way so when the added money stops coming there is a crash in prices but with the WM system and a limit on prices due to base code a new equilibrium would be reached quite fast.

I guess a player could crank up military spending hugely and keep buying small arms and warp the demand for war goods and manage to keep expanding the military by encouraging POPs to become soldiers which would lower stockpiles as soldiers demand small arms etc but that would be a disaster for the players own country if stopped the cheating and only affect a few industries of the world economy.

 

[alvaro]

I think it would depend on how player spends it... basically it wouldn't go directly to the POPs unless the player used it to max all labor reforms but even then its only a single country so the world wide affect would be limited. The most destructive thing a player could would probably to set all stockpile limits very high and create extra demand though if the limit of 1,000 persists from V1 even that wouldn't have much effect. For instance just how many things are there for a player to spend money on?

looks like an excellent way to "molest" the economy a favor revolutions.

anyhow, we have no idea for sure how money is going to be represented in the game. IIRC, please correct me if i'm wrong, King just mentioned that money was going to flow instead of "appear". other than that just hopes by now.

 

[King]

We are seeking to close as many as the loops that exist in the money supply system as possible. So that money remains inside the system flowing around as money ...well...should. However the economy turns out to be truly broken we will fall back on the tried and teste dmethods of making money appear out of nowhere and/or disappear out of nowhere, but that is a last resort.

 

[KonradRichtmark]

That's good to hear. Three cheers for Paradox!

 

[HappyBanker]

Where did you see a link with precious metals production to money creation?

Actually I think in the game reactor's presentation video Johan exlains that money is only generated from gold (or something like that). But this has to be confirmed I agree.

As far as I understood it the basis of money creation was going to be all RGOs production so it is easy to maintain money supply growth. IE- RGO produce output without any cost of input aside from labor. The WM takes all that output and puts a price on it. As population grows in the game so does infrastructure and techs which raise output of RGO.

Well I understand what you mean but this is actually the problem for me : RGO (as factories) will create Value but not money which are completely different. Which means there might not be enough money to buy those RGO's goods, and this could decrease prices. In a more global way it is clear that total production and population will tend to grow but money available might not grow accordingly... which I suspect could create imbalance problems.

By the way the cheating effect on economy is interesting too. The question might be : how is the ingame economy going react to surplus or lack of money?

 

[Alexander Seil]

We are seeking to close as many as the loops that exist in the money supply system as possible. So that money remains inside the system flowing around as money ...well...should. However the economy turns out to be truly broken we will fall back on the tried and teste dmethods of making money appear out of nowhere and/or disappear out of nowhere, but that is a last resort.

I assume this also means that the World Market doesn't act as a sink for excess production? I.e., you can't sell something unless there's someone to buy it?

 

[HappyBanker]

We are seeking to close as many as the loops that exist in the money supply system as possible. So that money remains inside the system flowing around as money ...well...should. However the economy turns out to be truly broken we will fall back on the tried and teste dmethods of making money appear out of nowhere and/or disappear out of nowhere, but that is a last resort.

Did'nt see that while typing (slow typer )

I wish you to be able to balance the economy with the most "closed" system possible. Thank you for this as this seems very hard for me... but very promising.

However money "appearing from no-where" doesn't seems that unrealistic to me : it happens all the time ! (the good old money printing). So for example linking the "gold" revenue in budget with population growth somehow might be sufficient... (not sure at all about this), which could be a abstracted way of simulating money mass increase.

Anyway... I clearly have to wait now for further DD's .

 

[Sovereign]

From what I read in previous DD's the money in Vic2 is not going to appear from nowhere or fade away anymore. That's great, and is a huge improvement to the model in my opinion. But it also raise a quite numerous number of questions for me... that should be answered in upcoming DD's but I just can't wait to talk about it .

Examples :

-Where is the money going when the player construct things like fort or naval bases ? It could go to Capitalists but there might not be any in the state... The construction could also "only" cost materials. But that seems a little too easy and I suspect they have a better idea , or you have...

-If new money is only created in link with Gold/Precious metal production this means that only countries actually producing gold will be able to create new money (if this is right), and I am really wondering what kind of effect this could have on balance... Moreover will this money production system will be enough to sustain the natural population growth of the period (more people = larger money needs).

Any idea on this ?

Fractional Reserve Banking can be used to create new paper, and Central Banks and their control of interest rates for instance may also bear on this question. AI and "points-of-failure" will certainly shape the answer.

 

[Swuul]

I think somebody has been playing EVE online As we all know, money doesn't magically appear or disappear in EVE, which is one of the reasons it is such a wonderful game; however in EVE the players are the ones who work to get money, and only players buy stuff from the markets. If the economic system in Vicky 2 truly can simulate that (basically, the game has to know where every single cent is in the game, money just dont disappear and magically appear; more money appear via gold (which, if I guess, may actually be any other valuable mineral (like silver or diamons) but in game terms is treated as gold) and the increased demnad and produces (which are generate by factories and artisans) the gold-inflation doesn't go through... well, if that succeeds, then I for one will gape in awe, because that will be something (as far as I know) never before seen in a non-MMO game

Interesting, very interesting

 

[Valentin the II]

They could allways (re)introduce minting and inflation...

 

[ashandresash]

We are seeking to close as many as the loops that exist in the money supply system as possible. So that money remains inside the system flowing around as money ...well...should. However the economy turns out to be truly broken we will fall back on the tried and teste dmethods of making money appear out of nowhere and/or disappear out of nowhere, but that is a last resort.

That's excellent news!

In the other hand, I'm still thinking on what the 'National Bank' feature would do. Maybe just managing loans to the government from POPs, hopefully a way to simulate banking in the game: credit!!! boom and burst

 

[alvaro]

They could allways (re)introduce minting and inflation...

no please! no "that" inflation!


a proper money market will have inflation without needing any programming.

 

[Lloyien]

As I recall, most of the goods in Victoria were not necessarily consumed by governments (for factories), but by the POPs themselves. In Vicky 2, I imagine this will remain the case; but, because money is going to be "enclosed" in the system now, is there going to be any need for a price floor or ceiling for goods?

I suppose the one thing that strikes me about Victoria was that coal was a huge moneymaker; with a few techs (Clean Coal comes to mind), coal extraction seemed to quadruple or quintuple, with hundreds of units of coal produced every day being sold onto the WM. Because there was no price floor, coal extraction remained very profitable, even when production far, far, far exceeded worldwide need for it.

In Victoria II, will we be able to see unemployment as the price tries to reach an equilibrium with production? The labourers working those RGOs shouldn't be able to support their needs with what they should be paid for the price of coal, once production hits its stride. Hopefully, this'll lead to labourers emigrating to other, more profitable RGOs.

 

[Valentin the II]

no please! no "that" inflation!


a proper money market will have inflation without needing any programming.

Why not? Its logical, makes for a nice addition to game play, and could give semi-historical results.
It shouldn't come from research costs of course, instead have the government print as much money as it wishes and then the inflation would rise according to the proportion of the money printed to the total monetary worth of the goods produced that day (or owned, I don't know the details).

 

[Meanmanturbo]

Why not? Its logical, makes for a nice addition to game play, and could give semi-historical results.
It shouldn't come from research costs of course, instead have the government print as much money as it wishes and then the inflation would rise according to the proportion of the money printed to the total monetary worth of the goods produced that day (or owned, I don't know the details).

I think what alvaro is refering to is that about the only thing EU-style inflation share with real inflation is the name

 

[Valentin the II]

I think what alvaro is refering to is that about the only thing EU-style inflation share with real inflation is the name

That is true.

 

[alvaro]

Why not? Its logical, makes for a nice addition to game play, and could give semi-historical results.
It shouldn't come from research costs of course, instead have the government print as much money as it wishes and then the inflation would rise according to the proportion of the money printed to the total monetary worth of the goods produced that day (or owned, I don't know the details).

i thought you meant the inflation à la EU2.

any implementation where the money is not a "product" like any other but a unit of measure for all things will require artificial design of inflation and a hell to tweek and betatest. that i meant.