You debase your currency!?! You violate the trust of your farmers, your aristocrats, your bankers even?
Time for the sword mana! Where's Sir Isaac when you need him?- 2
So what do you think of our inflation system?
- Thread starter Jiben
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Time for the sword mana! Where's Sir Isaac when you need him?
This whole conversation would be moot if the reduce inflation insta-click worked instead like the Papal Influence mechanic. Have the inflation tick down over time per click rather than instantly if you want to make it an actual consideration.
That said, to quote DDRJ, "inflation is just a number."
That said, to quote DDRJ, "inflation is just a number."
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You debase your currency!?! You violate the trust of your farmers, your aristocrats, your bankers even?
I debase my currency all the time when playing an Islamic nation, before absolutism at least.
The opposite should also exist. A major reason for the weakening of Safavid Iran was that they literally didn't have enough precious metals to be used as currency. The government had to come up with crazy schemes like making coins that were worth double in the areas that they were minted in order to try and prevent the country from continuing to hemorrhage its silver supply.
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When discussing inflation one should not forget hidden inflation. Army maintenance cost increases with tech, advisor cost increases over time and naval maintenance increases with certain techs.
Those increases cannot be negated (notwistanding cost decrease modifiers).
Those increases cannot be negated (notwistanding cost decrease modifiers).
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I didn't notice anyone pointing out that IRL inflation not only affects cost, but earnings as well. And in eu4 goods prices,one of the few earning sources, are exempt from inflation.
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I don't think that Spain's problem was primarily inflation. They suffered from too much easy money making local production of goods unattractive as opposed to just importing it, just like exactly this happens in every single country with a large amount of oil: https://en.wikipedia.org/wiki/Dutch_disease
The exact description of the inflation in the period can be found here: https://en.wikipedia.org/wiki/Price_revolution
"Spanish prices rose the least and the Brabantine the most"
"The Price Revolution, sometimes known as the Spanish Price Revolution, was a series of economic events that occurred between the second half of the 15th century and the first half of the 17th century, and most specifically linked to the high rate of inflation that occurred during this period across Western Europe."
So we conclude that:
1> It was not a spanish event, it affected everyone including France, England, Italy, Netherlands.
2> Spain was the least affected. The UK had great inflation in the period: https://en.wikipedia.org/wiki/The_Great_Debasement
Sure, there was inflation, but what caused Spain to fall was not it since it suffered the least.
IMHO Spain had "Dutch disiese". Too few people interrested in producing goods because they can find easy money elsewhere (in trade? colonizing?), causes local production to be supplanted by imports and causes a loss of local knowhow and causes the country to fall back in production technology.
And Spain also was fighting too many wars: Spain bankrupted during the Italian War of 1551: https://en.wikipedia.org/wiki/Italian_War_of_1551–1559#Finance
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I think it is fine for the game. But of course in no way a good representation of the real world. Problem is that if you want to make a new model you also have to write AI code to handle it. And I just don't think a better version of inflation will add any significant game fun
Oh boy. Now we're getting into the weeds. Nit-picks. Details.
I'll say four things;
1) Bullion inflation spreads outwards. European Kingdoms were linked by trade. Spain's currency was traded in other realms.
2) The Lowlands were Spain's emporium, i.e. they owned it. Babrant was owned by the King of Spain. In EU4 terms, the 'Burgundian Inheritance' had 'fired'.
3) Spain wasn't just buying Spanish goods with her bullion. Price rises elsewhere meant higher costs for the Spanish crown (in military supplies for example).
4)Spain's Economic History is an enormous topic. If we add Europe into consideration, I think we all need PhDs...from Oxford.
Inflation is always and everywhere a monetary phenomenon.
- Milton Friedman
The hydra grew another head.... back to monetary policy. Here I think I'm on more solid ground. I'm not in total disagreement, but a single quote lacks nuance, and nuance is important.
Firstly, there There are heaps of quick articles online that show inflation that's not purely due to money supply. Wikipedia and investopedia will do.
Here's a type of inflation that deals with expectations : https://www.investopedia.com/terms/w/wage-price-spiral.asp
Another phenomenon is 'stagflation' : https://en.wikipedia.org/wiki/Stagflation this phenomenon includes a wage-price spiral, but also involves cost-push inflation.
Cost Push inflation also has little to do with money supply: https://www.investopedia.com/terms/c/costpushinflation.asp
If you read enough of the Stagflation article , you'll notice that Keynes sometimes agreed with more monetarist interpretations, and Friedman with more psychological ones.
The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance.
John Maynard Keynes, The Economic Consequences of Peace (1919).Hayek and Friedman would happily agree with this. They're all about the money supply (and long-term views).
If you understand what a Philips Curve is (here's a very useful image, and article) you'll understand the significance of the Stagflation article crediting Milton Friedman (and Edmund Phelps) with challenging the basic concept. They were saying it didn't take expectations into account - which provided a chance to regain a kind of equilibrium (and go back to a situation a bit more consistent with monetarist views). That's a very psychological explanation for someone apparently devoted to money supply... and the answer, of course, is that Friedman was probably a flexible thinker (may he rest in peace). He was not necessarily as dogmatic as sometimes portrayed.
I don't think Keynes or Friedman were hypocrites, but dry-quoting someone (i.e. without context) is not a good idea when talking about a complicated topic.
One way both views can live somewhat symbiotically is regarding time. I'm quoting the wikipedia article on Stagflation again:
....while neoclassical and neo-Keynesian models are often seen as competing points of view, they can also be seen as two descriptions appropriate for different time horizons. Many mainstream textbooks today treat the neo-Keynesian model as a more appropriate description of the economy in the short run, when prices are 'sticky', and treat the neoclassical model as a more appropriate description of the economy in the long run, when prices have sufficient time to adjust fully.
There are disagreeing interpretations, and what emphasis is given to different models seems to be one of them. That gets lost in a quick quote.This has very little to do with the OP... so:
@Jiben
Yes! I want to see inflation be a bigger deal (either through spiralling inflation from introduced bullion, or currency debasement) .
Make inflation great again (or terrible again - same thing really)! I demand currency crises!!!!
[edited to make things slightly more concise]
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