Why not make tariffs cause inflation?

[Kh3lben]

You can't look at a country with 20% inflation in game and compare that to 20% inflation in real life, because they don't even remotely represent the same thing. The actual real life inflation should be compared to the yearly inflation increase in game, as that more closely models actual inflation. It doesn't work exponentially, but that's a fairly small difference with the numbers you'll usually see in this game.

I get that but it is still absurd!Introducing static events that increase price costs for w/e reasons is way more appropriate.Anyway i am not gonna grind on this anymore cause i am *ok* with the system as is.What really got me going was that proposal that somehow bad mexican silver = spanish inflation.

ps: In case you are interested

 

[Eldorian]

but inflation for all tariffs makes no sense at all.

Why? War reparations also cause inflation, and once again, tariffs do not represent exchange of goods, they represent resource extraction.

 

[Schmoekoeksklok]

I get that but it is still absurd!Introducing static events that increase price costs for w/e reasons is way more appropriate.Anyway i am not gonna grind on this anymore cause i am *ok* with the system as is.What really got me going was that proposal that somehow bad mexican silver = spanish inflation.

ps: In case you are interested

I'm neither a historian, nor an economist, my point was really just that there is nothing that makes tariffs have a larger effect on inflation then other forms of income. Apparently, neither did gold, which would be cause for removing its effect on inflation. Giving it to another source of income though is a terrible way to do it, unless you do it for everything. I mean, why would 20 ducats of tariff income cause inflation, while you can still happily collect 300 from trade without anything in your country getting more expensive?

 

[BarrosRodrigues]

And this is how you justify that paradox implemented inflation in this game.Not the other way around.The concept that inflation can reach that high values in pre 1800 Europe is not only ahistorical but,pardon my manners,plainly retarded

You can´t simply make changes ad-hoc, the changes have to be coherent with other gameplay abstractions or rules. RL countries did not had monarch points which is mostly what is needed to reduce inflation and is the only thing that can reduce it once it goes rampant, etc. etc. It’s just like advocating that Generals (etc.) should have travelling time in a game that limits you to only 1 general in the early game and a few more by the late game. Btw there is no need to be rude!

 

[Kh3lben]

You can´t simply make changes ad-hoc, the changes have to be coherent with other gameplay abstractions or rules. RL countries did not had monarch points which is mostly what is needed to reduce inflation and is the only thing that can reduce it once it goes rampant, etc. etc. It’s just like advocating that Generals (etc.) should have travelling time in a game that limits you to only 1 general in the early game and a few more by the late game. Btw there is no need to be rude!

That's why i said,only 2 posts above,that i am *ok* with it and i am not advocating towards removing it from the game.

 

[Eldorian]

bad mexican silver = spanish inflation.

Do you have sources on why this isn't true? I'm no historian, but it's what I'd learned. You made this claim as if it was common knowledge.

 

[TheMeInTeam]

Why? War reparations also cause inflation, and once again, tariffs do not represent exchange of goods, they represent resource extraction.

There is a difference between taxing the exchange of goods and printing/fabricating money.

 

[Kh3lben]

Do you have sources on why this isn't true? I'm no historian, but it's what I'd learned. You made this claim as if it was common knowledge.

Well as for sources stating it was only a theory to begin with,you needn't venture far off.Even a simple wikipedia search will quickly list all of the prominent theories about the Price Revolution. Now as to why the theory of the "precious metal influx" is losing ground,among other things, you can start by looking at this article from the Royal Chemistry Society

 

[Enewald]

Inflation stands for money becoming less valuable. When an economy faces an injection new money, the supply of money increases, resulting in inflation as the amount of goods that can be purchased with money does not change equally in the same direction.
With gold and silver mines the owner alone would not face the inflation, it would be passed on in the economy as the new money keeps changing hands.
So in the end everyone who held gold/silver before the new money entered the economy suffers from the inflation, others more and some less.
Inflation should be associated with trade, meaning those countries that actually have the silver/gold flowing through their hands get also their hands dirty. Although the economical benefits of trade and having gold mines are huge, the inflation penalty should also exist.
Lets say a Mexican mine produces some new gold/silver, some of it stays in the local trade node, but a lot moves on. Say if 10 gold is produced, and 9 is moved away by trade, only 10% of the initial increase in the money supply ends up as local inflation. In the next node, 9 gold came in, maybe 5 leaves from say the Caribbean towards Seville, 4 gold would equal 40% of the original money supply increase, resulting in countries participating and having trade power in that node suffer that amount of inflation penalty. Say those 5 that ended up in Seville than damage those who participate and have trade power in Seville, giving them also some inflation penalty. Sure, they all benefit from trade, but they also suffer from slight inflation.
Historically we had a lot of inflation also flowing from Americas to China, and from Japan to China and India and so on.
The new gold and silver coins should be a like a flow of poison running through the world economy, causing damage where they flow. Maybe Siberian and Central African states might suffer less.

It could also be worked out with events. Europeans gaining ownership of the mines either via colonial state ownership or protectorate status would result in global events that give inflation to countries that have trade power in the specific important nodes, depending on their trade power and influence.

New gold and silver entering the economy did not just result in huge Spanish inflation. In a global economy based on those two shiny metals, it slowly inflated all of the Old World.

 

[IIWW]

Inflation stands for money becoming less valuable. When an economy faces an injection new money, the supply of money increases, resulting in inflation as the amount of goods that can be purchased with money does not change equally in the same direction.
With gold and silver mines the owner alone would not face the inflation, it would be passed on in the economy as the new money keeps changing hands.
So in the end everyone who held gold/silver before the new money entered the economy suffers from the inflation, others more and some less.
Inflation should be associated with trade, meaning those countries that actually have the silver/gold flowing through their hands get also their hands dirty. Although the economical benefits of trade and having gold mines are huge, the inflation penalty should also exist.
Lets say a Mexican mine produces some new gold/silver, some of it stays in the local trade node, but a lot moves on. Say if 10 gold is produced, and 9 is moved away by trade, only 10% of the initial increase in the money supply ends up as local inflation. In the next node, 9 gold came in, maybe 5 leaves from say the Caribbean towards Seville, 4 gold would equal 40% of the original money supply increase, resulting in countries participating and having trade power in that node suffer that amount of inflation penalty. Say those 5 that ended up in Seville than damage those who participate and have trade power in Seville, giving them also some inflation penalty. Sure, they all benefit from trade, but they also suffer from slight inflation.
Historically we had a lot of inflation also flowing from Americas to China, and from Japan to China and India and so on.
The new gold and silver coins should be a like a flow of poison running through the world economy, causing damage where they flow. Maybe Siberian and Central African states might suffer less.

It could also be worked out with events. Europeans gaining ownership of the mines either via colonial state ownership or protectorate status would result in global events that give inflation to countries that have trade power in the specific important nodes, depending on their trade power and influence.

New gold and silver entering the economy did not just result in huge Spanish inflation. In a global economy based on those two shiny metals, it slowly inflated all of the Old World.

There is a problem: gold isn't tradeable. So the countries that have TP in nodes with gold will suffer from it, without any gain. That doesn't make sense, Your proposition requires gold to e normal, tradeable good.

 

[Eldorian]

There is a difference between taxing the exchange of goods and printing/fabricating money.

Tariffs don't represent a tax on the exchange of goods in this game. Trade does, which is why sound tolls give so much trade power. Trade in EU4 represents who is profited from the exchange of goods, ie tolls and middleman markups. That's why trade flows in the direction of middlemen. Tariffs are calculated from base tax and production, not trade goods. Tariffs represent straight up resource extraction. They are resources taken straight from the hands of the colonial nations, which is why they affect liberty desire directly.

Well as for sources stating it was only a theory to begin with,you needn't venture far off.Even a simple wikipedia search will quickly list all of the prominent theories about the Price Revolution. Now as to why the theory of the "precious metal influx" is losing ground,among other things, you can start by looking at this article from the Royal Chemistry Society

Of course it's only a theory. I don't even know if evidence can exist such that it's possible to know with certainty what caused the price revolution. The link you sent just says that the silver coinage in Spain wasn't purely Mexican until 1700. I'm finding far more articles (recent ones as well) that do say it was New World silver that caused the price revolution.

 

[Enewald]

There is a problem: gold isn't tradeable. So the countries that have TP in nodes with gold will suffer from it, without any gain. That doesn't make sense, Your proposition requires gold to e normal, tradeable good.

Gold happens to be unique, it is a commodity money. It can also be a commodity good (shiny jewels for rich people) and also a medium of exchange; money.
It is just not another simple consumption good, nor a capital good of production (during those times, now we have gold as an important part of modern computers for example).

But everyone who touches the new gold flowing into the economy should suffer inflation, that is what happened historically. The gold did not just pour into unlimited secret vaults, it was used to buy goods from other nations. French, British and Russian fur hunters kept acquiring more furs because the Chinese had now access to more silver and gold, which came from Peru, so as a end result the inflation happened to anyone who just happened to participate in the global economy.

Currently we have a system where more trade means just more benefits. But alas, in real world it also means your nation is more vulnerable to shifts in the global supply of money. All the major events of the latter time period of the game were influenced more or less by the shift in the money supply that the Spanish mines had caused.
Inflation is harmful, and it spares no one.

 

[Emiliana]

Boy, econemy is complicated.

More gold = worse for econemy. Haha i'll stick to swiss cores, thank you very much

What this? austria?! event causes claim on tirol?!

hehe

 

[Schmoekoeksklok]

Tariffs don't represent a tax on the exchange of goods in this game. Trade does, which is why sound tolls give so much trade power. Trade in EU4 represents who is profited from the exchange of goods, ie tolls and middleman markups. That's why trade flows in the direction of middlemen. Tariffs are calculated from base tax and production, not trade goods. Tariffs represent straight up resource extraction. They are resources taken straight from the hands of the colonial nations, which is why they affect liberty desire directly.

Eh what? Tariffs in 1.1 were calculated from base tax and production. You're right that it doesn't correspond with a tax on goods exchange, but what it does correspond with is a flat income tax on the colonial nation as a whole (the crown if you will, or vicecrown I guess ).

Of course it's only a theory. I don't even know if evidence can exist such that it's possible to know with certainty what caused the price revolution. The link you sent just says that the silver coinage in Spain wasn't purely Mexican until 1700. I'm finding far more articles (recent ones as well) that do say it was New World silver that caused the price revolution.

Well, like I said before I'm not a historian, nor an economist, but I am a chemist! And there not being any Mexican silver in coins from before the Price Revolution was proven without a doubt by that research. Which (in science) makes that not a theory, but a hypothesis that turned out untrue. It could still be caused by the hysteria over finding precious metals, but not by the precious metals being used for coinage since they weren't (yet). That's a different hypothesis though.

I know you mean the colloquial meaning of the word theory, but in science a theory is a proven workable model of reality, not just an idea. As far as I'm aware historians are expected to follow the scientific method as well, when possible.

 

[Kh3lben]

Of course it's only a theory. I don't even know if evidence can exist such that it's possible to know with certainty what caused the price revolution. The link you sent just says that the silver coinage in Spain wasn't purely Mexican until 1700. I'm finding far more articles (recent ones as well) that do say it was New World silver that caused the price revolution.

Erm no.It clearly says : The results showed that Mexican silver did not enter Spanish coinage from the 16th century to the beginning of the 17th century. As in up to early 17th,there is NO silver in it.Funny thing to note here :Early 17th is when the phenomenon ends and the prices/wages start to stabilise all across Europe,till 1770-5(for example 1775 English inflation was @ 21.8%)

@Schmoekoeksklok : Sorry m8, i just saw your question about why trade is getting a different treatment from Paradox.If i had to venture a guess,simplicity would be it.Can you imagine what would happen to nations like Venice and Hansa if they added inflation ticks for trade income?

 

[Kh3lben]

Huh? The 16th Century price inflation in Europe is just a fact of history. Sure the reasons for it are disputed, but the reality of it isn't.

You focused on the wrong part of the sentence.10% 20% and 30% inflation for that time period are just ludicrous.Anyway once again : i am ok with the game having inflation as it does for game balance purposes.Maybe just maybe,fixed events that would raise the prices would work better but w/e.

The whole reason this debate started was due to the suggestion of linking colonial tariffs with inflation.

 

[Chamboozer]

You focused on the wrong part of the sentence.10% 20% and 30% inflation for that time period are just ludicrous.

I'm not sure I follow. Inflation in the game doesn't work like inflation in real life. It's just a percentage increase of the prices of everything. Taking 1444 as a baseline, the Ottomans (based on Istanbul consumer prices) would have about 300% inflation in 1600. Obviously a direct comparison between the game's inflation and real-life economics can't be made at all.

 

[Sir Tornado]

Ideally, you should always get inflation, no matter what. Just how much inflation you should get should depend on gold coming to your country from outside the country.

This should include include from vassals, income from colonies and income from trade from provinces not belonging to your country.

Similarly, inflation should reduce from gold flowing out of the country.

 

[Emiliana]

Ideally, you should always get inflation, no matter what. Just how much inflation you should get should depend on gold coming to your country from outside the country.

This should include include from vassals, income from colonies and income from trade from provinces not belonging to your country.

Similarly, inflation should reduce from gold flowing out of the country.

so what you are saying, for someone young and not smart about this advanced stuff, is that if a country has bad inflation, everyone around it will suffer from this too?

 

[hwoosh]

No IT IS NOT.Stop spreading misinformation for the love of god.

I'm talking about the game world, not the real world. Don't be obtuse.