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You are reading an article written by a citizen of eRepublik, an immersive multiplayer strategy game based on real life countries. Create your own character and help your country achieve its glory while establishing yourself as a war hero, renowned publisher or finance guru.

Inflation = GOOD ?

Day 1,340, 19:32 • Published in USA USA

• by Guy3000

inflation |inˈflā sh ən|
noun
1 the action of inflating something or the condition of being inflated : the inflation of a balloon | the gross inflation of salaries.
• Astronomy (in some theories of cosmology) a very brief exponential expansion of the universe postulated to have interrupted the standard linear expansion shortly after the big bang.
2 Economics a general increase in prices and fall in the purchasing value of money : policies aimed at controlling inflation | [as adj. ] high inflation rates.

Inflation is widely and understandably considered a bad thing to RL economy, savings are worth less, money buys less/ products cost more and life become harder especially in the context of Hyperinflation.

But, and I'll keep this short n' sweet: I believe inflation in eRepublik is not only a positive thing but an EXCELLENT thing for the economy (unless you extrapolate) for one reason: the admins put the same price for companies all around the world regardless of inflation (namely 500, 2000, and 7500 $). This means that if a country's currency is worth less you can buy more-- this means more ressources for the players and overall a stronger (granted this can be bad if ressource prices go down because of competition...) economy and player base.

So congress men and presidents to keep inflation and countries well off:

Print an **** load of money if gold allows

Help keep a higher pay for the companies

Try to reduce unfairness in the inflation distribution

Attempt to keep raw ressources at a high price

Keep in mind this applies more to newer players but still works for older players.

Thanks for reading my advice!

Comments

CHUCK NORRlS Day 1,340, 19:51

Not really.

We need gold to pay for big companies, and the most important, pay the training boosters.

Quintus Cornelius Scipio Day 1,340, 20:03

The erepublik economy is not complicated enough to have major effects from inflation. IN a real economy, some inflation is expected and reasonable. The only way to have zero inflation is to have zero growth, and we all want to see growth. What we don't want is wildly fluctuating inflation or hyper-run-away inflation.

I think what you're mainly viewing as inflation must be the GOLD/USD peg. Even this has its equilibrium, and I think we've got a basic 200 USD range now in which it can fluctuate. It is already insanely good and profitable to sell Gold for USD, and then make Q4 RM companies. But the act of converting Gold into USD brings the price down, while the act of converting USD into Gold and removing that gold from the game raises it. So these two forces push against each other.

Almost any economic activity has unintended consequences. Price is determined by supply/demand, but if we're keeping a high USD/Gold ratio in order to convert USD into Q4 RM companies, we're going to increase the supply of RMs significantly with respect to demand, which ultimately drops their price. The ability of the gov to do the kinds of things suggested is spotty at best, and the consequences are likely to be somewhat contrary to intention.

Guy3000 Day 1,341, 06:59

@Quintus Cornelius Scipio: Obviously some inflation is good (for multiple reasons including to stimulate the economy)

I'm viewing this as Country currency VS Another Country currency.

Granted there are problems, such as the Gold vs Country currency prices which would take some work from the government to regulate.

With prices of RM at a low: less people would be encouraged to them and more to use 'em so I think that's good!

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