Suggestion: Too much Income or Treasury should increase Inflation

[NorthernFalcon]

How does inflation occur in real life? If there's too much money in the system, which increases the willingness people have to buy products or services at increased rates, or sell products or services at increased rates.

While EU4 has an inflation system, it doesn't really model this primary cause of inflation effectively; instead, it just penalizes people for abusing loans or choosing certain decision options.

One way to model this type of inflation in-game would be to scale it off of budgetary surplus or too much gold in the treasury. I propose:

1) If the monthly budgetary surplus is greater than 5% of effective development, it should add +0.01 to inflation, plus an additional +0.01 for every 5% above that.

2) If the treasury is greater than 200% of effective development, it should add +0.01 of inflation per month, plus an additional +0.01 for every 100% above that.

Clause 2A) Treasury inflation will not be charged if the treasury is below 500 ducats (in order not to penalize small nations saving up for manufactories).

The exact numbers could be fiddled around with a bit, but I believe that this concept will help align the game's inflation model closer to real-life inflation.

 

[MatthewP]

I would think all else equal that the government hoarding money would reduce inflation rather than increase it (since money sitting in a treasury is not in circulation.

IRL aside, it seems like the gameplay goal would be to create an incentive to spend most of the money that’s coming in quickly and also to spend most of it on maintenance. I don’t think this would be a fun change. It seems like it would involve a lot of finicky calculations from one month to another, skipping army templates since they require saving a bunch in advance, and other annoying micro. And I’m not sure the primary effect, shifting spending towards things that require maintenance and reducing gold reserves, is even a good thing.

 

[Flammifleure]

I'm fairly certain inflation is caused by an increase in money that is not matched by an increase in the productivity of the nation -- more money being minted/printed, especially the debasement of hard currency, and a sudden influx of cash -- as say from a Spanish treasure fleet or Mansa Musa's fabled pilgrimage. All of this stuff is already represented in-game (though debasing currency raises corruption instead of inflation, for gameplay reasons I suppose).

General increased income represents more wealth being produced by your people, rather than "artificial" money being pumped into the system. I.e. more raw materials and finished products. The only source of income that I can see increasing inflation (besides gold/silver mines, which already happens) is trade, if merchants "import" more money than the state can handle.

But whether I'm right or wrong -- admittedly economics are not my forte -- I agree with MatthewP that such a change would be unfun and therefore undesirable.