Victoria II and Economic accuracy

[Secret Master]

Meh, it doesn't help much. Many of the gold mines are in countries that won't get those techs for a long while, and the output bonuses aren't huge anyway - besides, they continue to rise in a manner completely unrelated to the rest of the simulation. The problem is a pretty fundamental design flaw which can't realistically be scripted round.

Right, I get that its unrelated to the situation. But I was thinking as a method to ease currency shortages in general.

I mean, if you could somehow measure the total money in the game's economy and then back figure what an appropriate amount should actually be in 1920, you hypothetically put a band-aid on the situation.

 

[Naselus]

But is it realistic for Vic 2 time period?

It's no less realistic than having the world run out of money. The gold standard simply doesn't work if money has a fixed velocity, and there's no way of avoiding that.

BTW, we can't have Dutch disease without multiple markets. Though, it is more 20th century thing. And no local inflation (global inflation actually not happen either, due to goods overproduction)

Yes, we'd lose local inflation. I don't think dutch disease would apply regardless; you'd need a lot more than just multiple markets to create the economic complexity required.

In truth tho, I'd rather we had an example of one functional market before we started talking about making hundreds of separate ones.

 

[Lucellus]

I have observed this discussion for a long time...
I still think that there are several fundamental faws in Vicky 2 economic model so full solution is impossible.
BUT I can't believe that such a OBVIOUS BLUNDER in not accounted for:
Money in the game function as medium of exchange BUT have their onw value (gold standart after all). So when money are spend somewhere they are transferred to someone's else pocket - that's it they become income for someone else. THEN ecplain to me where are money spent on construction going? Every time YOU or CAPPYS built somethung - factory or rail some money - gold - leaves the currency system of VICKY! As geme progresses the number or constructions increases and ...
This is only ONE of the sources of the aforementioned problem with liquidity BUT also the one that can be solves easily...
May I suggest to some willing to test to remove gold cost from all constructions and see if that improves the situation late game?

 

[General WVPM]

I have observed this discussion for a long time...
I still think that there are several fundamental faws in Vicky 2 economic model so full solution is impossible.
BUT I can't believe that such a OBVIOUS BLUNDER in not accounted for:
Money in the game function as medium of exchange BUT have their onw value (gold standart after all). So when money are spend somewhere they are transferred to someone's else pocket - that's it they become income for someone else. THEN ecplain to me where are money spent on construction going? Every time YOU or CAPPYS built somethung - factory or rail some money - gold - leaves the currency system of VICKY! As geme progresses the number or constructions increases and ...
This is only ONE of the sources of the aforementioned problem with liquidity BUT also the one that can be solves easily...
May I suggest to some willing to test to remove gold cost from all constructions and see if that improves the situation late game?

you buy goods with that money from producers

 

[Lucellus]

you buy goods with that money from producers

I may be wrong but in many tooltips there are BOTH money cost AND goods...
Besides in common\building file the NAVAL base has cost of 15000....
I say its worth checking....

 

[AmpsterMan]

So reading through this, i can't tell if in my current game I've done well, or done poorly.

As U.S., I've colonized Africa, Oceania, and protectorized states with Coal, Iron, and Oil (Brunei, Oman, Hedjaz, Korea, and Manchuria) mainly because i want to increase their production with my superior tech.

I've also fought a great war with France, UK, Austria, and Russia with Germany as my ally. Germany was occupied by Russia for years before i could relieve them. Likewise, i occupied UK and France for years. Both Germany and UK went bankrupt and I suspect have huge unemployment numbers from factories closing (i want those people emigrating to me )

Would this be to damaging to the economy? I have been operating under a command and conquer mentality, admitedly. Don't really care if other nations can't buy my products because i want my own people to buy them.

(I also run a slight deficit to take money outof national banks, though i fear this may be destroying money due to interest rates)

 

[pontifex_medius]

I've also fought a great war with France, UK, Austria, and Russia with Germany as my ally. Germany was occupied by Russia for years before i could relieve them. Likewise, i occupied UK and France for years. Both Germany and UK went bankrupt and I suspect have huge unemployment numbers from factories closing (i want those people emigrating to me )

Would this be to damaging to the economy? I have been operating under a command and conquer mentality, admitedly. Don't really care if other nations can't buy my products because i want my own people to buy them.

Wars are pretty costly in the first place, and the maintenance of your standing armies and navy alone will be quite costly in the long run. Then there's war exhaustion, which makes your people mad. Also, by forcing foreign factories to shut down, you run the risk of hampering with the supply of goods that are required by your own factories and pops. So in terms of money, you probably won't profit much with that approach. But if it's fun to do, then why the hell not. It's a game you play for fun after all.

 

[Secret Master]

THEN ecplain to me where are money spent on construction going? Every time YOU or CAPPYS built somethung - factory or rail some money - gold - leaves the currency system of VICKY! As geme progresses the number or constructions increases and ...

The money is taken out of circulation. So, you are quite right to point out that some money actually leaves the system. Which, given the discussion, is not optimal.

In Vic3, I'm hoping that you can pay POPs for their labor on projects like these. Or have the money requirement removed.

So reading through this, i can't tell if in my current game I've done well, or done poorly.

As U.S., I've colonized Africa, Oceania, and protectorized states with Coal, Iron, and Oil (Brunei, Oman, Hedjaz, Korea, and Manchuria) mainly because i want to increase their production with my superior tech.

I've also fought a great war with France, UK, Austria, and Russia with Germany as my ally. Germany was occupied by Russia for years before i could relieve them. Likewise, i occupied UK and France for years. Both Germany and UK went bankrupt and I suspect have huge unemployment numbers from factories closing (i want those people emigrating to me )

Would this be to damaging to the economy? I have been operating under a command and conquer mentality, admitedly. Don't really care if other nations can't buy my products because i want my own people to buy them.

You are more or less screwing the global economy. You will catch immigration, but that won't be every unemployed POP by a long shot.

Here's the problem: You can't play the game like Command and Conquer. Not only that, but there are economies of scale to the point where even if you have 350 million POPs inside your borders, you will produce more consumer goods than they can purchase. If the rest of the world is in poverty, they can't buy your stuff either. Even worse, you can't let other countries take up the slack in the production of input goods like lumber and steel and cement since their industry has been destroyed. You end up in a kind of accidental autarky, and POPs that could be employed in more profitable industries are stuck making stupid things.

For all its warts, Vic2 does a good job of modeling how interconnected the world economy can really be. In a recent game as Russia (allied to France), I fought a Great War against Germany and Britain. The war ended with Germany under 100% occupation and France 50% occupied. Germany was in first place in IND score, but she lost 2000 points of industry. I won. That put me in first place. But the destruction of Germany's economy, along with the damage done to France's economy, caused some real problems. First of all, the demand for iron and coal dropped like a stone, killing my iron and coal miners. It turns out, Germany and France had been producing tons of cheap steel (which I had been buying up rather than making my own factories due to technological inferiority), but that was over. And I couldn't pick up the slack instantly, since factories cannot be built or upgraded instantly. Furthermore, their relatively sudden impoverishment hurt the market for cars and planes. But it got worse when the Communists broke out in revolution in France, occupying half the country again. The result was France's economy taking an ever bigger hit, with RGOs out of commission and more factories closing every other week during the fighting.

Keep in mind, within two years of the war's end, I had reached peak regular clothes and luxury clothes. I was ready to start dumping tons of that stuff on the world market now that local demand was satisfied. Well, too bad, millions of POPs in Europe weren't buying. And it was all because Germany wouldn't take my 50% peace offer before they were 100% occupied.

(I also run a slight deficit to take money outof national banks, though i fear this may be destroying money due to interest rates)

Interest rates are not set by borrowing money. They are set artificially by your commerce techs. Earlier in the thread, I advocate running large deficits in the late game if the national bank is sitting on 15 million pounds or more just to get those pounds back in circulation. Borrow away.

 

[AmpsterMan]

Aww crud... I wonder if releasing Africa as a commonwealth will help drive up demand for goods (since they can make factories) I'll still get first dibs on half of what they make, though I'll lose half my army . At least I'm number one now. I am dreading the late game slump because i have never actually played long enough to experience it.

 

[Secret Master]

Aww crud... I wonder if releasing Africa as a commonwealth will help drive up demand for goods (since they can make factories) I'll still get first dibs on half of what they make, though I'll lose half my army . At least I'm number one now. I am dreading the late game slump because i have never actually played long enough to experience it.

I never release colonies as dominions. Especially not Africa. Here's why:

1) Colonial states in Africa actually have a decent chance of becoming full states on their own. No need to release them now, as they won't build up factories that quickly anyway.

2) I use colonies as a way to drive industrialization at home. RGOs will fire POPs when overproduction occurs. In your states at home, those POPs will start becoming craftsmen. In colonies, they are just unemployed until they get rehired again. So, the cycle looks like this: RGO fires POPs, POPS at home become craftsmen, POPs in colony just go back to work eventually. If you turn them into dominions, that lever gets taken away from you.

3) Unless you have worked hard to get literacy up in your colonies, releasing them will create a bunch of low literacy countries with poor research capability. They will start falling behind technologically.

4) You lose the soldier POPs as you rightly point out. You get control of your dominions' armies, but they fight with the techs of their home country. And they fight at the level their home country supplies them. If dominion X is short on ammunition, its units will have lower ORG than yours.

5) I don't think you get the naval support increase from ports in your dominions. Since I spam dreadnoughts, I need every level 6 port I can get.

6) I don't trust other governments to set rational economic policy or to run taxes properly. If I can't trust Germany's AI to run an economy well, I sure as Hell can't trust South Africa to do it right, either.

 

[AmpsterMan]

Hmn... it seems me trying to secure my economy may have lead a ruining of the world economy...

At least i have 70% of world oil production, and quite a few gold provinces. We'll see how things pan out.

 

[Secret Master]

Hmn... it seems me trying to secure my economy may have lead a ruining of the world economy...

At least i have 70% of world oil production, and quite a few gold provinces. We'll see how things pan out.

You will probably be okay. You mentioned owning Manchuria, so you should have enough coal to keep the economy moving along at a decent pace.

The question on my mind is whether you own enough rubber. You mentioned Africa, so you might be okay.

 

[Naselus]

I may be wrong but in many tooltips there are BOTH money cost AND goods...
Besides in common\building file the NAVAL base has cost of 15000....
I say its worth checking....

Yes, the cash is lost. That's one of the major reasons why cash costs were largely dumped in AHD; naval bases are only thing left which has a cash cost, and their placement is very limited (the justification was due to their importance for colonies in HOD). Everything else uses goods. The sum itself is pretty insignificant anyway - 15,000 is less than a week's worldwide gold production. It's simply not a major source of lost liquidity; population growth and industrial expansion are far, far more damaging.

 

[Plushie]

Without a central bank mechanic, a quite advanced one at that, in theory the monetary base can multiply infinitely untill 1 pop somewhere can't pay 1 days interest. Leading to a contraction of the entire global monetary base.

You don't even need a central bank mechanic, just some sense of bank reserves. Banks in the 19th century didn't have the luxury of operating with a fiat currency, where people just took the currency they circulated without question. They inspired confidence in their circulation by offering to redeem it for some reserve asset (gold, in most cases). By using the current national bank mechanism, but introducing some sense of bank reserves, you can allow the national bank to lend to capitalists (and other POPs, if you want) as long as it has a reserve base it wants to defend and those loans draw on the reserve base. The bank will not expand indefinitely because that would threaten its reserve base.

How to enact that in the code I haven't the foggiest, but that's how it worked in real life (at a certain level of abstraction). Easier than actually accurately modeling how banking worked at the time while still getting some of the money supply flexibility that late-game liquidity issues seem to require.

I just recently wrote a paper that went through the role non-bank reserve demand and bank precautionary reserves played in nailing down the money supply in 19th century economies that lacked central banks in summary, which I could post here, but I don't know what good it would do. Implementing a good model of money circulation in Victoria would be living hell, I think, especially one that could manage adverse clearings and varying cash balance demands.

 

[AmpsterMan]

So i restarted my previos game because i had ruined the world economy. I played a bit slower this time focusing on my economy and being more selective in my conquests and colonization. I was too sluggish in obtaining tropical wood and silk and it is hurting me in some areas, but i dominate fabrics and clothes. In fact, using the Save Game Economy analyzer shows that 40% of my GDP comes from those two products.

I worry, however, because i am engaged in MASSIVE defecit spending. At the moment, i have £700 daily payments in interest while according to the economy analyzer, the world supply of income is about £11000 so obviously this is unsustainable since the interest isn't actually paid into my pops. I only did this, however, because i noticed that as my capis put moreand more money into the bank, after a certain threshold, they would lose all of their savings. At first i thought they were just investing, but it kept happeing without any investment from my capitalists. Have any of you noticed this before?

 

[Secret Master]

...obviously this is unsustainable since the interest isn't actually paid into my pops. I only did this, however, because i noticed that as my capis put moreand more money into the bank, after a certain threshold, they would lose all of their savings. At first i thought they were just investing, but it kept happeing without any investment from my capitalists. Have any of you noticed this before?

It's not unsustainable if the national banks of the world have plenty of money on hand.

The bankruptcy scripts are insane (I've gone bankrupt with no debt and a 12,000 a day income when taking a 54,000 payment option in an event), but they tend to deal poorly with big shocks, not with steady spending. If the national banks have plenty of money (especially yours), you should be fine.

What does your national bank look like right now?

 

[AmpsterMan]

From what i remember, I have more than £1 Million in loans from the Fed, about half coming from 671 Capitalists in Massachusetts. The flow of money into the bank is roughly similar to my expenses. I have only about £10k or so before fluctuation eliminates the surplus.

The weird thing is that if i pay back my loans, the savings of my capitalists go down rather than going up.

 

[Secret Master]

No, I mean how much money is left in the national bank. Not how much you have taken in loans.

 

[AmpsterMan]

No, I mean how much money is left in the national bank. Not how much you have taken in loans.

Ah i see.

0 because as money flows into it, i take it out in loans

 

[Secret Master]

Then you probably do have a sustainability problem.

When you have 15 million in the bank, you have plenty of room to take loans. When the bank is empty, you are skirting the edge of disaster (mainly because foreign national banks are far more volatile than your own).

It might hurt your capitalists, but it may be time to pay off your debt and do some other things.

By the way, what year is it?