Join the new world

Here I go again, making the title of my paper come true.
(Note: tl;dr at the bottom!)

As you know, recently the admins decided to decrease the production value of resource companies in half. This move has had wide changing effects on the landscape of our economic environment the world around.

Also with this move, they introduced many new resource that provide smaller 5% boosts to the food/weapons industry (up to 25😵, and 25% boosts to the moving tickets industry.

I intend on making an assumption during this article:

-In general, I intend to assume a country has the maximum booster for an industry, eg, 25%.


The main purpose of this is to surmize what has happened in terms of productivity to our overall market basis.

First looking at



Raw Goods

In general, the price of raw goods has jumped over twice as high as it used to be for markets. Eg,

-For the oil market, I used to sell oil at .05 USD, now it is at .14 (a 280% Jump)

-For the Titanium Market, Titanium sold for .04 CAD, now it sells for .1 CAD (a 250% Jump)



This is from my personal experience. I am unaware of pre-adjustment levels of grain/iron prices, but I rest assured that something very similar has happened here as well.


The reasons why are quite obvious here, the decrease in productivity caused the level of resources being produced to drop off dramatically creating large gaps everywhere for every market. However, there is more at work here than a simple 50% decrease in production.


If you take into account the fact that a company working with bonus has 125% production capabilities, compared to pre-adjustment levels, we now make 63% of the natural productivity that we used to. This would suggest, in it of itself, that prices should jump up double, but due to other factors this has been even higher than this.



Result:


An increased need for more workers to be in resources, a dramatic increase in wages causing pressure on manufactured goods due to more resource jobs bidding higher, an unstable market that is hard to predict on what value a resource will have. Overall, resource companies themselves will make it out ok so long as the need to sell does not overtake the demand to sell. This is not something that will happen for a long time, I believe.


Overall, each country will have the same playing field it had before the changes when it comes to resources. Of course individual nations will be different, but overall the landscape of resource companies in terms of international competition should be fairly proportional to what it was before. The grab for resources will become, though, ever more important.


Naturally, I should mention, the result changes if you assume that a company is working in what was beforehand a bad market. The change to at least medium level productivity would actually help this company!



Now onto...



Manufactured Goods


Manufactured goods have had an increase in productivity. You might think that this offsets the loss of resource production, but it does not.


There was a 25% increase in manufactured goods production and a decrease of 50% production in manufactured goods. This means that overall we are producing at approximately 87.5% capacity compared to pre-adjustment overall in both types of markets.


Locally, the increase in production means that there is more manufactured goods being produced. The higher resource prices push the price of the manufactured goods up, but not twice as much due to the increased quantity of goods being made.



Conclusions on the Manufactured Goods


I would surmsie that prices are about 14%-20% higher than previous just based on productivity level changes at current (that is a blind approximation compared to actual changes in prices and will vary depending on many factors especially how many boosters a country has in an given area, 14% would be an area that has a full 25% booster while an area with no or even 1 booster should expect higher than 20% inclines).


What this means is that our markets are tied together more than ever before. Certain countries have, for once, true advantages when it comes to exporting making domestic companies in countries with less boosters have a very very hard time competing in the future days.


This means


-More importing/exporting worldwide

-We should see the rise of "super" economy nations, especially concentrated in certain areas of production


We will see an erepublik rise in what would be a real life analog to



A natural outcome of this will be talks about import taxes to protect domestic markets, one of the many that happen in a congress over and over and over again, but now with renewed vigor because of the actual threat of domestic markets collapsing.


Eg, a country who has a healthy bonus of 10-15% on food vs. a country importing with a 25% full resource bonus will be able to survive the lower prices but with very little profit. A country with 0-5% boosters will have very grave results on the domestic market, though the food industry should survive but only through imports.


Also, manufactured goods companies will find that competition is harder and some will die out. With the increased production, flooding of the market will ensue and at high prices needed to compensate for resource costs, less demand for goods along with less purchasing power of the people will result in companies across the board shutting down in every sector.


This is unfortunately natural, we will need more of our people working in the resources sector than before, and less in the manufactured. The market corrects itself, and less people working in manufactured goods implies less manufactured goods companies as well.




Overall Conclusion


As mentioned before, we are running at 87% capacity compared to what we were. Really, that is the optimal percentage mark, if a country has less than a 25% boost to manufactured markets, the more realistic percentage range is 80-87% capacity.


This will cause a higher demand upon resource sectors and require more people to work in resource companies. Manufactured goods companies will suffer but not die in most cases.


There is higher prices, less purchasing power for your dollar, and more demand upon the market to produce. High wellness employees will be doubly important and twice as hard to find at the same time.


As glum as this sounds, I have produced articles beforehand about the production formula that the admins have made in times past. While the current one is hidden and quite frankly, that is VERY annoying, I bet one to two it hasn't changed much in the aspect that is most important.


The function is linear. Now, for most of you this means nothing, but I can link you to my treatise on those issues which while somewhat outdated still hold true in the trends that they predict. So long as people keep on working and training, our production levels will outgrow our production needs world-wide and we will be in the same comfortable levels of production that we were in a few months ago within the year.


The admins tried to make our game harder, and I can appreciate that as there was over-production. But once again, they have failed to gain a grasp on the mathematics of their own game thinking a proportional change will "do just the trick", when it never, ever will.



Silly admin, exponential curves are the best. Linear equations are just so...flat.


tl;dr

We are running compared to before our economic module changed at 87% capacity at best and more likely so around 80% production capacity overall. The increase in production in manufactured goods means more importing from stronger producing nations squelching domestic markets, and also less manufacturing companies needed overall thus the dying out of such companies in general.

However, the reduction of the producting of resources makes prices everywhere higher without an increase in wages creating less buying power for the individual. We will need more workers and more resource based businesses than previous, and in general will experience relative shortages which since we had overproduction won't be lethal.

The major problem with this is, in the long run, that the admins believe this will solve overproduction and while it will help temporarily as they are using a linear function for production we will once again overproduce compared to market needs certainly within the next year.


For Ballman 😃.


Aren Perry,
Statistician,
Avid Patriot

EDIT: NEW CHANGES HERE http://forum.erepublik.com/showthread.php/105982-Changes-changes-changes?p=1362071&posted=1#post1362071 which will totally screw us over