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Economic of my state

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Helsworth
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Post: #11
RE: Economic of my state

@yangusbeef/trini

You can tackle the debt when it reaches AR's arbitrary danger threshold by implementing MR2. Make sure to save up some action points, because your're mostly likely going to need reform propaganda, because that too high a threshold will negatively impact your popularity and thus your influence level in carrying out reforms. Don't wait for 250% debt to GDP ratio, do MR2, when it reaches 200% just to be safe. You should begin closing the deficit before and after the implementation of MR2. Like Snorunt said, it's great that the basic income reform didn't ruin your state. The devs must have tweaked the reform a little or you simply got lucky with it.


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19.10.2015 11:16
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Snorunt30
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Post: #12
RE: Economic of my state

Helsworth Wrote:
@Snorunt,
So glad to have you back, man.

This is another aspect of AR that needs addressing. They don't dell us what their Money Supply tab actually measures. In any case, in real life, the Money Supply grows and contracts endogenously according to nongov sector economic behavior. So such lags between GDP & MS don't exist, but again, it depends what you're defining as the Money Supply. If you're defining it as M3, it will be above GDP. If you're defining it as MZM, it will be below GDP.


Decided to grab a minor in economics, so figured now is a good a time as any to get back into Ars Hehe. May not be the most realistic all the time, but better than most (or none at all, for that matter).

From personal experience, money supply below GDP hinders growth (and crashes the GDP back quite a bit, only to bounce back to slightly above GDP, and repeat).

Lord Alexander Wrote:

yangusbeef Wrote:
Will exponentially increasing basic income be worth it? My goal, from a taxes standpoint, is to make them as low as possible. Should I advert from that Plan?

Currently Basic Income is regularly causing bugs that destroy the affected state. To minimize the risk of triggering such bugs I strongly recommend you to change it every Winter only by small steps.


I didn't know this, but that could explain a fair amount. Hope it doesn't ruin your state, Yangus Smile


Ense petit placidam sub libertate quietem.
(By the sword we seek peace, but peace only under Liberty.)
If the opposite of pro is con, what is the opposite of progress?
Congress.
20.10.2015 01:21
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Helsworth
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Post: #13
RE: Economic of my state

Snorunt. Yes, the experience of Central Banks keeping the quantity of money fixed, thus hoping to control prices failed miserably - the result being (upward & downward) spikes in prices. If the supply of money is not elastic/left to float according to demand, then you won't be able to have price stability.
Quick example. I keep the money supply 100 & currently demand for my money is 100. Price of my individual unit of money is 1. But demand grows to 120 and I still keep supply fixed at 100. Now the price of my individual unit of money is 1,2. That's going to have ramifications in the economy. Exporters will say, hey, the price of all my goods have just gone up, hindering my ability to compete. People will a relative comfortable income stream will say, hey, now is a good time to save, not spend. Sellers are going to see the price of their goods increased as well, and are going to see fewer sales in consequence, because spending is income. People with loans are going to see the value/burden of their loans going up as well.
And in contrast to that, if I keep the supply fixed at 100, while demand goes to 80, you have the price of money (the individual unit) go down to 1,25.


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This post was last modified: 20.10.2015 08:18 by Helsworth.

20.10.2015 08:06
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