Last winter I had a dilemma in Rohstoffmacht: Because of high popularity following the NIT-Reform, I had implemented 100%-Money-Reform in autumn, the quarter I usually use to solve my yearly tasks, and now had to decide whether to solve the postponed six tasks (nearly all on high urgency but none on very high) or to change the budget, especially increase the money supply which had become significantly lower than GDP. I decided for the first option which was a mistake and resulted in negative economic growth of 18% the following fiscal year, which means my economy shrank by an average of 5% per quarter for four quarters (see here). Lesson learned: Don't neglect your money supply.
Apropos money supply: In his GDR-Guide, Sheep hints that, in this game, through lowering the interest rate the money supply could be (indirectly) increased without triggering inflation while (direct) increases of the money supply came at the cost of inflation (Sheep: "Money policy: Lower interest rate as much as you can - money supply of GDR is really bad at the beginning. You can manipulate money supply directly but you will have to live with inflation."). Is that true? If so why? It really shouldn't make a difference which way I increase money supply if one accepts that inflation/the price of money depends, among other things, on the money supply/its quantity (quantitative theory of money).
Neglecting Money Supply and Budget Balance in "Rohstoffmacht" |
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hamma13 Member ![]() ![]() ![]() Posts: 230 Words count: 23,783 Group: Premium Joined: Jun2017 Status: Offline Reputation: 8 Experience: 1446 Glory Points: 20 Medals: 2 |
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20.11.2019 13:19 |
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