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Problems with Nominal interest and Exports

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Ardar
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Post: #1
Problems with Nominal interest and Exports

Hello all,
I have two states Union Tigala and Suia ( Colombia ) and Republic Vardaria ( United Kingdom ).
Soo i have a problem with each country and i am looking for sugestions.

In Tigala and Suia, i reduced my nominal interest to 1% but i think that value is to low and i wanted to increase it but when i increase the nominal interest in the budget nothing happens, i mean i have increased it 3 times and it still 1%. How can i do to increase it? because in my other state i can increase it without problems.

In Vardaria i have a problems with exports and Gross investment. I lowered the value of my currency and lowered tariffs, but my exports didnt go much up and my imports sky rocketed ( maybe because of low taxes ). I also if my people have more money thx to low taxes why the gross investment is much lower than average state?

Thx for you help.

01.05.2014 00:14
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Helsworth
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Post: #2
RE: Problems with Nominal interest and Exports

In Tigala and Suia your regent has low influence. The Columbia template is the most frustrating template (in my opinion). In works in sharp W's ups and downs... So don't be too worried if you see abnormal behavior with this template.

As for Vardaria. You should commit to reducing the nominal interest, and turning that fiscal surplus into a deficit. In Vardaria, the foreign sector is running a surplus against you, and the government sector is running a surplus as well. That means your domestic private sector is shouldering the corresponding deficit. Your savings ratio is already negative (that means households are leveriging themselves).
You can try via task options to improve your competitiveness in order to achieve positive net exports. It's your choice, though. Import aggregate demand from abroad or create it domestically by running the appropriate fiscal deficits.
(S-I)+(G-T)+(X-M)=0
Savings - Investment = private sector (firms and households)
Public spending - Gov taxation = gov sector
X-M = net exports (the balance of non-residents)


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01.05.2014 06:45
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