GDP and some ideas to reach GDP goal

Day 776, 22:16 • Published in Malaysia New Zealand • by Carr De Vaux

Many months ago, some wise men told me the GDP calculation in eRep is flawed and unreliable. Last month, the eGod (admin) of eWorld decided to allow us to set economics goal as part of the presidential campaign. And considering how only 6 nations achieved its economics goal, we must therefore learn the secret towards hitting the GDP goal.

Firstly, let's understand what's the GDP (Gross Domestic Product) means in eRep. The wiki.erepublik gives the following formula:

GDP = C + G + L + S

where,within the past 7 days:
* C: (Cost of creating a company) × (Number of created companies).
* G: the total Gold invested by the general managers from your country in company upgrades.
* L: (Cost of buying a license) × (Number of purchased licenses).
* S: the total value of sales made by companies from your country to internal and external market (☉S = Value of sales × RER). RER = Recommended Exchange Rate.

As the cost of upgrade and cost of company creating as well as buying license are all fixed variable (we cannot change them), the variables that we can influence are:
1. Number of companies created.
2. Total of Gold for companies upgrade.
3. Number of License purchased.
4. Total Sales (local and export).

However, the most important and probably the largest component of the GDP equation is the "S" factor. S is the sum of all the sales by Malaysian companies to local and international markets , multipled by RER value. Therefore, intuitively - if Malaysian companies sell more locally and internationally - our GDP will rise. Conversely, if our RER rises, so does our GDP. RER is given by the following equation:

RER = Average Product Cost (APC) * 10

Now, we have to figure another particularl term - APC. The calculation as given by wiki.erepublik is rather tricky and long. The easy summary is - if the prices of the all products sold by Malaysia companies are higher, then APC is higher. However, higher prices mean lower sales. Lower sales will then drag down the S value. So, in summary, RER is something hard to manipulate, except that our companies/producers should sell to the most profitable (expensive) market possible - as all profit-seeking companies should.

Notice - donations and black market purchase are not accounted for and only the transactions in the last 7 days are included. And for the GDP for each nation, only the companies based in that particular country are counted for. What does this mean? One thing YOU CAN DO then, to help our economy:

Buy from domestic companies if the price differences are limited.

For example of Q1 Weapon, between A&L Sidearms of Ireland (owned by Canadian) and Your weapon of confidence of Peninsular Malaysia (owned by Malaysian &Spanish ?) and Malaysian Kalis of Peninsular Malaysia (owned by Hungarian??) ... one should always choose those companies that are based in Peninsular Malaysia, at least for manufactured good.

Another example for Q2 Foo😛 Roti Canai (based in Sarawak) vs Hrvatska-fina-hrana based in Central Croatia - naturally it is better to buy from the companies based in Malaysia as they both generate higher GDP and provide jobs to our people.

Another idea is to limit black market or donation transactions, in particular between government. If we are to buy a hospital for a nominal sum of MYR1, while the hospital, based say in Hospital Building System of Peninsular Malaysia, we potentially lost 250-300G from our GDP calculation. It would be better to spare the extra 2 minutes to donate the gold from the company to government - before buying it off the public market. After all, the tax will go back to the state anyway.

Summary

So in summary, we shoul😛
1. Increase our citizens as that would allow us to support more companies, more higher level companies, more domestic consumptions and productions for export.
2. Avoid donation transfer or black market if possible.
3. Buy from domestic-based companies for manufactured goods.
4. Encourage export and discourage import.
5. Higher wages, product prices and generally inflation.
6. Encourage entrepreneurship in area where we have HIGH resources - more companies, more upgrades and more exports.
7. Do large spending (houses, hospitals, DS, weapon stock etc) in the last 7 days before the presidential elections.
8. Consider public market transfer as an option to boost artificially the GDP.

I did not elaborate number 8 much as i believe many might disagree with this approach. That said, it is basically a scam for the government to drive up domestic GDP by having state-owned organisation buying goods off state-owned companies, and then company transfering the gold/money back to the org through donation and vice versa. It might not work, as i have not fully understood the GDP cals yet. Just some ideas.

Update: number 8 actually doesn't work...since i found out that the stock can only be sold once on the market. Sigh.

Anyway, enough economics from me. I d love to hear some comments from the experts out there.

Regards,
Carr de Vaux