The current economy
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by Palodigon
Let's not beat about the bush, the economy doesn't look very good at the moment, not to say terrible. We have a massive deflation and I think there are two reasons for this
1. Manufacturing companies received 999 raw materials for free. and Raw material companies got the same amount of raw materials of their own sector for free. These manufacturing companies were able to produce their goods much cheaper as they didn't have to pay for the materials and will thus sell at a lower price. And with all the raw material companies having a huge stock for sale the price of raw materials will stay very low. The first week of V1 grainwas sold for less than 0.1 GBP.
Lately it has risen to a more decent price of 0.6 GBP but the last week prices are dropping once again and god knows where it'll stop now.
2. The productivity formula is still not perfect. Admins have changed it some time ago but still it isn't good enough. Let's take a food company for exemple. With a decent skill of, let's say 3, you can make quite some food. let's say you'd have a productivity of 4 so you'll make 4 food. You'll only need one of those for yourself so this means 3 of those are for sale to other people. This I could live with. But if you're productivity is much higher you'd make 8 food wich is way to much for one person to make. We can see the result on the market. Prices are way too low and companies are hardly getting any money.
It'll be very difficult to stabelise the economy and I don't think we can do it ourselves. We will need to admins to change a few things here and there.
But we all know something has to change, because a deflation of over 80% is just crazy.
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good to see an economy article its such a key issue but has been buried by recent military events. I mean it was a key issue in the last GE but it doesn't seem to have been resolved
I think if we concentrate a bit more on the local Economys it will raise the general economy of Euk. In other words, I think the government should help the Small new buisnesses with evidence of good owners and good sales. If the government put more time into the local economy's, it would help others to open up new buinesses. Which would encourage buiness rivalry, And may lower prices encouraging economy income.
Kyle
im new here so tell me if you think im wrong, but to get round the problem of companies selling products at low prices when they first come to being, and then after using there initial resourses the price goes up. couldnt a tax be levied on new businesses? it would give the companies more insentive to charge a slightly higher price from the outset? thus there would be no initial boom followed by a slump.
benedict arnold
@Benedict
That's a good idea in theory, but the problem is, the coding of the game limits us to only three types of tax, VAT, Import, and Income. So if there was a tax, it would have to be donated, and someone would have to police it, and find some way to punish offenders. Basically, it's too difficult.
@Palodigon
Good article. It really gets to the point of the issue. I agree that the production formula is inaccurate, but since the admins probably aren't going to change it, we just have to find a way around it. And as for the deflation values, I know the game says we're at -80%, but in the forums, Malta calculated the inflation based on the cost of goods, and most of the finished products have gone way up in price compared to before the admins took away the raw materials bonus in the production formula. LIke, I'm talking in the range of 500% and up. For example, before the change, Q1 food was at what, 0.08 GBP? now it's at 0.4. Q1 Moving tickets used to be at 2.00 GBP, now they're at 12. That's not deflation. that's hardcore inflation. Although all the extra money being brought in by these price increases are being eaten up by higher RM costs, and higher salaries to pay for the inflation.
@intrepid132
when new companies are formed,a donation could be demanded and if it were not paid then the "punishment" could be that you are not eligable for loans from the SBA. just a thought.
@Benedict: There is no company tax anymore, so trying to levy fines at someone is not possible within the game's mechanics. There's no way to enforce it if someone wants to open one.
Actually, at this point the more businesses we have to spread employees around, the better our production is going to be (due to the max number of exployees in the productivity formula). The formula is based on pure capitalism, so limiting businesses would only end up in either the company losing money by overpaying employees based on productivity or selling them more expensive.
There is no initial gain to companies anymore, as it's based of production, and the admins have not "gifted" companies since the third week of V1, so those should be just about used up, unless you're in Oil and moving tickets which are just now kicking up again.
Overall, we're looking at the bright light considering the wars around the globe are sparking economies in certain sectors. We're normalizing, more or less, and now people just have to cope with prices that are higher, considering we all knew it was going to happen when RM were introduced.
What we could use to do is re-examine our new citizen fee, but we need to address our food issues first.
Also, Q1 food isn't even making a real profit yet, 0.4gbp was a profit in beta, but with the cost of RM it really needs to go up a bit. Unfortunately some new companies or old dormant ones are going to cause another price war.
The Q1 food GMs that helped get prices back up are going to drop to 0.39 for now, due to one of the companies having a bug that doesn't let them sell any higher no matter what price they put in.
My e-economic insights are quite meager, so it's very helpfull to bump into interesting articles like this one. Thx to Palodignon and all the commentators.
Voted and subscribed.
Thanks everyone for the comments and compliments.
Interesting article