Second Iteration of Cost of Living simulation
- various balance adjustments
- Cost of Living - Unemployment effect was added
- some adjustments for EU countries were made - they will have much stable currency strength & international trade
a bit about initial states
- Australia had exceptionally high level of CoL (87%) at the start. I guess this wass because of high food price from water shortage and high wages.
- Japan, France, Italy were another expensive countries to live in this mod. They have generally strong labour laws but so does Spain. I guess these countries have higher oil demand or other factors influencing immigration.
- In contrast, US, UK, and SK had relatively low CoL and all of them have pro-business labour laws. But I was also able to notice that US & UK had the deepest negative wages-CoL gaps. Maybe I really should create ‘Cost of Living Crisis’ so that way too lower wages compared to CoL can have some consequences.
- Canada had exceptionally low CoL (36%) at turn 0. I assume this is a result of cheap oil price, strong currency (thanks to high GDP), and pro-business labour laws.
Findings & Thoughts
- it seems 10% rise in CoL causes 0.5~1% GDP loss through the wages-productivity-GDP pipe.
- it suggests that the game can actually simulate “fair” depiction of demand-driven stimulus by having both of GDP boost & wage/inflation/CoL boost. but this is still a paper plan.
- it was rather easy to reduce CoL to 35% by firm de-carbonization policies. low oil price → low food price → now two less major problems. but going further will need deficit-running state corporations to artificially drop prices.
- I’m considering actually linking disposable income of 3 income groups to inflation so that inflation can actually measure expected money circulation instead of just lumping in the
wages*(1-unemployment)term. - another idea on paper is adding some permanent grudges or even a dedicated simulation for population density affecting CoL (as rent is likely to be higher). but I guess I’ll have to save that for another mod like real estate expansion or something.