Monetary mod

Hello all

I just bought Democracy 2 and have been messing about with it after work. Good fun!

About me: I’ve been an editorial intern with OpenDemocracy for the last few months but I’m just (next week) about to move from the UK to Italy to start a Masters in European Studies and International Relations at the University of Trento (assuming I pass the entrance exam next Friday). So I’m interested in politics, economics and international law.

I’m also intrigued by the concept of “serious games” and “games for change” - especially as educational or training tools - to learn about real life things. Current favourite is A Force More Powerful, but I’m looking forward to trying Peacemaker as well. And of course, Republic: The Revolution was great fun :wink:

Anyway - I’ve been using Democracy 2 as a bit of an “educational tool” to prepare me for Trento (at least, that’s the excuse I’ve been giving my wife). I’ve been playing around with modding the game too. I’m trying to work monetary policy into Democracy 2 (in a very abstract way) by including “interest rates” and “inflation.” (I realise there’s already an “inflation” mod - but this would eventually be more like a “monetary policy” mod).

Here’s the idea:

“Interest Rates” work as a policy which is available from the start and is uncancellable (I’ve toyed with the idea of making it a cancellable policy to simulate “handing over control of interest rates to the central bank.”) Interest rates effect GDP and “Inflation.” Raising interest rates slows down the economy (GDP) and reduces inflation, and lowering interest rates stimulates the economy but increases inflation. I realise this will lead to a bit of a “Philips curve” in terms of things like unemployment - but I hope when the mod develops the relationship between inflation, interest rates and GDP can become more nuanced.

“Inflation” is a simulation object - it upsets capitalists and decreases average income (to simulate the demand for higher wages caused by the increased price of consumer goods).

A question: what does average income actually affect? It doesn’t seem to have any effects at all. So - I was thinking of replacing “inflation” with a “Consumer Price Index” (CPI) - something which would directly influence how well the government is liked by different groups.

I’ve also thought about replacing “interest rates” with “discount rate” - but I don’t want to make it too jargon-heavy.

Yes, there is already an inflation mod which does a lot of this. However - this would be a “monetary policy mod” - and possible future places to take this include adding a money supply, open market operations, reserve ratios, stagflation, “hyperinflation” as a situation and the ability to actually print money. But let’s see if I can get “interest rates” and “inflation” working first of all.

Any thoughts?

Well - I’ve got a crude approximation of inflation and interest rates working, and now I’m having a go at adding the monetary base, money supply and money multiplier.

I’ve already (predictably) got a problem: I can’t make the effects of a policy or simulation object equal the product of the value of that policy/simulation object multiplied with the value of another policy/simulation object.

Basically, the following calculation is central to monetary policy:

money supply = monetary base x money multiplier

So I want a policy (called “monetary base”) to have the effect of “monetary base x money multiplier” on another simulation object. This is what I’ve got so far:

#,MonetaryBase,Monetary Base,MonetaryBase,“The monetary base is the quantity of notes and coin in private circulation plus the quantity held by the banking system.”,UNCANCELLABLE,0,0,0,0,ECONOMY,0,0,0,0,0,#Effects,“MoneySupply,+0+(MoneyMultiplier*x)”

I’ve not given MonetaryBase any policy costs or policy income yet - as I’m still trying to sort out the effects. Problem is: the effect is a 0 increase in the money supply. The value of both monetary base and money multiplier should be above 0, because I’ve got “interest rates” feeding into both of them.

I think the problem is this bit: “(MoneyMultiplier*x)”

Perhaps the simulation doesn’t like the “MoneyMultiplier” in there? Is it not possible to multiply “x” with another named policy/simulation object?

And finally: I’m still not sure what average income does (apart from affect some “situations” like general strike). Is it supposed to have any effect on voter groups (such as “poor”)?

Any suggestions?

Regarding average income, it doesn’t affect the happiness or membership of any of the groups. It affects the two strike situations, and may affect some events or dilemma - without checking through them all, I can’t say.

Regarding the formula, the program should do what you want it to, but that’s something Cliff would have to look into. Your mod sounds like a good idea, so I hope it goes well for you. Obviously Cliff is very busy on Kudos 2 at the moment, but he may be able to look into this if he has any spare time. Hang on a few days and if you still don’t get a response here, it may be worth you sending him an E-mail about it.

I have a horrible feeling that averageincome is now legacy. It seems that most of it’s real functions are taken over by middleincome, so in many ways it should be removed and the relevant effects redirected there instead.
It could also be argued that you could then mod immigration to variable effect low middle or high income based upon the skill requirements you set for immigrants.
Damn, I need more hours in the day.

Unfortunately you cant currently do equations where X = val op(A op B) where A and B are both variables. I can see that you might want to, and this is something that became apparent towards the end of working on the game, but it was not feasible to rewrite it at that point to introduce that feature.
It is something I would (one day) consider modding in, because it would just be so useful to have.

Hi Cliffski - thanks for your comments!

Well - that sounds like something which wouldn’t need to be hardcoded and could be done with tools already available to the community. I’m just exploring D2 at the moment - but when I’m a bit more comfortable with it I’ll possibly give it a shot.

If there’s one thing you ever mod in the near-future - please let it be this:

Separate folders for each individual mission in mydocuments\Democracy2\

So any files placed in those folders would over-ride the main game files when a mission was selected. For example: I put together a coinpack which replaces the main file - but it can be a bit fiddly. If it were possible instead to just place the dollar in the USA mission folder and the in the France mission folder, it would open up a lot of options to modders. Like different minister name lists for different countries, different minister portraits for different countries. If you wanted to add a new currency symbol, it could just be a case of editing the “font” file for that mission and replacing the $ symbol with a custom symbol. It would be a small change and make a massive difference.

Please consider it!


I agree. If you look at President Forever, making and installing mods is extremely easy. A new scenario all goes in one folder, with sub-folders for all the various pictures etc. When someone downloads the mod, all they have to do is to copy the folder into their scenarios folder - there’s no need for them to try to put all the different types of files in different folders. It also makes it far easier to delete a mod if you don’t want it any more.

I’d suggest a complete overhaul of the mod file-structure.

So individual mission files would go straight into “mydocuments\democracy2”

i.e. there would be “mydocuments\democracy2\France”
etc, etc.

Then: each of those mission folders would contain an empty copy of every folder in the main “c:\Program Files\Democracy 2” directory. When Democracy 2 started up, it would check the contents of each of those mission folders and over-ride the main game files with anything it found inside them.

Seriously - it would make a massive difference to the modding community and (I hope) really encourage people to have a go!

Very interesting ideas. This is something that would be relatively easy to do, although currently my whole engine assumes no clashes of file names, but it’s about time I rejigged the whole darned thing.

It would be a small change but make such a massive difference to modders.

For a hypothetical China mission, for example, the installation instructions would be simplified to = “Extract China.rar into mydocuments\Democracy2”

And the uninstall instructions would be = “Delete the folder mydocuments\Democracy2\China”

When the player opened up the “China” mission, the game could check the contents of the mission folder and override the minister portraits with pictures of Chinese politicians, it could override with a picture of a yuan coin, the minister names could all be chinese, the file containing the fonts could replace the dollar symbol with a yuan symbol, the custom events, policies, sliders and simulation files could all be loaded. The modder could even really go to town if s/he wanted and edit the font to a Chinese-style script.

If it worked out - you could also use this system for Kudos 3 (EDIT: Of course, I mean Kudos 2), Democracy 3, or any new Positech games.

I’m sure there would be problems with it - but off the top of my head I can’t think of many!

I haven’t been working on this for some time - but I’ve just begun an economics module at university, and I want to minor in economics. So (hopefully) I will be in better position in terms of the technical detail.

Progress will be slow (i.e. over the coming few months I will work on bits and pieces). Currently - I’m just thinking of working a Consumer Price Index simulation object into the game to represent inflation (the advantage of using CPI instead of just a generic “inflation” object, is that CPI can also potentially represent “deflation” as well as “inflation.”) Then monetary policy would probably be controlled through events which would affect CPI.

We shall see!

Great news, I am also very interested in this topic and over the last 2 months I have read so many economic related articles and encyclopedias. So know I have learned more than in my whole life :slight_smile:

CPI is a very good idea, it should be included in game as as a statistical simulation. I think this mod should also include policies to control the central banks interest rates and reserve ratios. Inflation could be also a statistical simulation, as well as Money Supply. Situations - Hyperinflation, deflation, stagflation and etc. It also could include policies to even maybe choose your currency system as fiat money or backed by gold or financial reserves… Or to choose free-floating or pegged (as it is in Lithuania now) exchange rate system…

I think you should just make those first steps, and post the mod in this wonderful site, so we could then just develop it further… Just please do it and educate the masses, myself included. Go Josef!!!

I understand why Cliff didn’t want to touch inflation. If you start adding monetary policy - it tends to drag all sorts of other, related economic concepts into the mix.

At the moment - I’m basically working on gutting the Democracy 2 engine. I’m removing as many policies and simulation objects from the game as I can without breaking it. Then, I’ll try to build it back up again, but based around a more technical economic model.

Massive. Amount. Of. Work.

But I will be working on it. Why? Because this is all part of my revision for university. My economics module at uni is all about this sort of thing - so the research I do for this mod helps me pass my test. And it’s fun - so I’m mixing work and play in a way which will reinforce the learning. Trust me - it’s the best way to learn things. Democracy 2 helped me pass my entrance exam for university. (Hey, Cliff - how’s that for a quote for the D2 website?)

Don’t get me wrong - I’m not saying I’m definitely going to release something. Most mods never get released. What I’m saying is that I’m definitely going to have the time and incentive to work on it over the next few months. So fingers crossed.

What do I mean when I say I’m reworking the economic model of Democracy 2? I mean I’m adding:

  1. Aggregate Supply


  1. Aggregate Demand

These will in turn be affected by:

  1. Saving
  2. Investment
  3. Government Spending (broken up into various government policies)
  4. Tax (broken up into various tax policies)
  5. Imports
  6. Exports

And possibly

  1. Consumption

My economics professor is designing an economic model with us in class at the moment - and this is what it contains so far. As we add more to the model in class, I’ll take what is taught home and add things to the Democracy 2 model I’m working on.

When it’s finished - perhaps you’ll have the opportunity to lead your favourite country out of the current economic crisis? Hehe - we shall see!

1 Like

Just to let everyone know, I am still working on this one. The backlight on my laptop went kaput - so I’ve had to buy a second-hand laptop to replace it, which is the reason for the lack of updates.

Now everything is finally working again - and I have (I think!) got a much better grounding in economic theory now.

A few suggestions:

  1. Monetary policy first has to be created with:
    i) Fractional Reserve or Full Reserve Banking
    ii) Provision of specie backed currency, FIAT currency and Currency Board models (like HK)
    iii) Strength of Regulation versus Free Market (more regulation means less free market principles, thus putting the Govt on hook. More free market means less regulation but more bank failures and unpredictability, but stronger banks emerge and fewer need for Govt on hook)
    iv) Presence of a Reserve Bank or absence of one. (Regulation implies and enforces creation of a Reserve Bank)
    v) Absence of Reserve Bank implies Treasury puts its money in one/many banks locally.
    vi) Full convertibility (Both Current and Capital are separate).

Cheers, anandcp

Those are some good suggestions!

I have an economics exam in two weeks, so I hope to have something released by January 14th (or January 20th at the latest, when Obama becomes President).


I appreciate very much the work you’re making. We all know that economy is sooo much important in modern countries, so this beautiful game will get much more realistic.
Thank you very much.

Cheers, Bruno!

Thanks for the support!

So, I guess I’ll tell people what I’ve been up to. I’ve managed to clear out the D2 engine of all polices, simulation objects, dilemnas, etc. Anything I couldn’t delete, I’ve hidden. The game screen looks like a blank canvas now. And I’ve been filling it with my own policies and simulation objects. I’ve chosen what I consider to be the most important policies from an economist’s perspective. Here’s what I’ve got so far:


  1. Consumer Price Index (a measure of inflation - if it rises too high it can trigger hyperinflation)
  2. Capital Account (the balance of investment)
  3. Current Account (the balance of trade)
  4. Unemployment (if it rises too high it can trigger “full employment” - which causes strange things to happen to an economy)
  5. Aggregate Demand
  6. Aggregate Supply
  7. Consumption (How much individuals are consuming)
  8. Saving (How much individuals are saving)
  9. High-Street Interest Rates (Interest rates offered to their customers by commercial banks)


  1. Exchange Rate (With a slider giving the option to devalue or revalue the currency)
  2. Money Supply (With the option of shrinking or increasing the money supply)
  3. Open-Market Operations (with the option of selling or buying treasury bonds)
  4. Discount Rate (controls the amount of reserves banks must legally keep and not lend out or invest - meaning it affects the amount of credit in an economy)
  5. Central Bank Interest Rate (interest rate offered to commercial banks by the central bank - goes from zero to very high)

There will also be a variety of government spending policies and fiscal policies, which I haven’t drawn up yet.

I’m basically just working on this at the moment. No promises, but I’ll try and get something together by January 20th.

Okay, I’m refining the policies I will be including based on what the D2 engine can actually simulate.


  1. Consumer Price Index
  2. Imports
  3. Exports

I will remove Foreign Trade, as Imports and Exports will now handle its function. I’m also looking at reworking GDP and its relation to the other variables.


  1. Interest Rate
  2. Exchange Rate
  3. Money Supply
  4. Open-Market Operations
  5. Discount Rate

Well - I’m obviously not going to get this finished by tomorrow! :smiley:

I’m right in the middle of my exams, and they’re obviously distracting me a bit from modding. I have two weeks off at the end of February, so I might try to work on it then.

I’d wanted to have something finished by Obama’s inauguration! :frowning:

Hey, im currently working on a massive mod. I wouldnt like this mod to die because i was planning on merging it with mine, if that was okay with you. So if you want i’ll work on it and possible finish it. Just email it to me,