[WIP/QUESTION] Monetary Overhaul


#1

I was originally going to post this when I was near complete, but as this proposed mod is becoming rather complex, I’d like feedback as to whether it should be pursued, mainly considering it wouldn’t look pretty or integrate very well visually considering the fact that the GUI doesn’t scale with additions. Hopefully the dev can at least discuss some of the issues I outlined below :stuck_out_tongue:

[size=150]Description:[/size]

Democracy 3 provides you with control over various policy types, as we all know. However, I feel one key thing is missing which is key to any economy: monetary policy. What I intend by adding control over a nation’s currency is to add a new way of influencing the country and add a new degree of complexity.

On the side, I’d also like to add 3 new voter groups which I feel should also be represented because monetary policy is involved.

[size=150]Proposed Voter Groups:[/size]

-Libertarians:

-Austrian (Economists):

-Keynesian (Economists):

[size=150]Proposed Policies, Simulations, and Situations:[/size]size=85[/size]

Simulations
[list]Gold/Silver Price
Inflation Rate
Interest Rates
Consumer Price Indexi[/i]
Monetary Basei[/i]

Policies: All within the “Monetary Policy” branch

    Monetization
    Quantitative Easing
    Bank Discount Rate
    Reserve Requirements
    Domestic Currency Competition
    Misleading Official Statistics

Situations:

     World Reserve Currency Status (US Only)
     Credit Boom
     Credit Shock[b][i](?)[/i][/b]
     Rampant Inflation
     Hyperinflation
     Currency Crisis

[/list:u]

NOTE: b[/b] Denotes something that is undecided upon.

[size=150]Possible Issues:[/size]
-Again, since the GUI doesn’t scale properly to new items, the grid of voter types looks a bit wonky when I add the 3 voter types above. Also, the cabinet screen doesn’t scale with the new addition of the Monetary Policy cabinet member (who I call the “Central Bank Chairman”).
-It would be ideal to be able to force the player to use the Monetization policy if countries decide not to lend to the player’s country anymore. However, this isn’t a possible setting in the Credit Rating system…and I don’t think I can change that.
-This, unfortunately may end up being a core mod, being that I actually have been able to create the new policy group and add the voter types, but this is only possible by configuring the game’s core files. The mod’s folder does not come into effect here.


#2

Very nice idea!

I have only a concern: if I install this mod and then install another mod with economics policies, they don’t interact. I hope that Cliffski will found a solution, like merging the better mods like this, like the elecricity mod in core game. And insert a credits section with modder’s name.


#3

hi i recently send you a file with my unfinished economy mod it have some policies that you want to make, thanks


#4

I think this is broadly quite an interesting idea, and could add some nice flavour to the game.

I don’t think the additional voter groups are necessary. None of these groups are going to have a noticeable number of members, except maybe Keynesian, but most people aren’t economists and don’t know enough to fall into any of these categories. The smallest categories in Democracy 3 at the moment usually cover 10% of the population on average (assuming you haven’t done anything to deliberately remove them), and 10% of the population are never going to fall into any of these categories. I think liberals in the game already are essentially the libertarians you describe, though perhaps not as strongly so as you describe them as they seem to be essentially anarchists (you can’t have a government if you don’t have taxes).

Equally, why do you need a new policy section? This can all fit within the economy section at the moment, meaning you can avoid modding core files.

I’d like to hear more about ‘misleading official statistics’ too, and what the justification for this is. I think this is a thing that people think happens, but doesn’t really (or at least, is not a deliberate endeavour, regardless of how hard you try people will misinterpret statistics). Certainly none of the major western countries that the game currently simulates are going to have policies to deliberately obscure the truth, because the fact they have the policy would be leaked and that would be infinitely more damaging than just telling the truth.

Hope those thoughts help

-El


#5

A great Idea, definitely something I felt was missing from the game.

I tend to agree with Elinor that the new groups are probably unnecessary though. In the base game It appears that the conservative/liberal divide concerns people’s sociopolitical opinions, while the socialst/capitlist divide determines their feeling on economic matters. I could be wrong, but all the effects in game seem to support this (taxes for example affect socialst/capitalist opinion, not lib/con).
It follows that a Libertarian in game is just a combination of Liberal (desires freedom from government interference in social matters) and Capitalist (desires freedom from government interference in economic matters).

As for the other two, pretty much +1 to what Elinor said. The groups would be tiny and the net opinion of even the individuals in the groups is only partially affected by their economic stance. The end result would be a negligible impact on voter opinion and elections.

Combined with the fact that it will look bad and require editing of the core game, I think they are probably not worth it.


#6

Fair point, and I kinda felt that way when writing about the voter groups. I just threw those in there because they were actual groups of people. Also, I believe you can influence the membership of each group through certain policies, events, and “dilemmas”, which was why I wasn’t going to completely overlook the fact that these small groups can grow into a significant amount of people. However since people here seem to view them as unnecessary (and I agree the work wouldn’t really be worth it at the moment), they won’t be worked on in the foreseeable future :stuck_out_tongue:

By the way, while I may have made libertarians sound like anarchists in a way (didn’t intend that), turns out only a tiny minority of them really are.

Well anybody would logically think that, however after doing some on/off research I discovered, at least in the USA, that official statistics are very misleading. The US government defines inflation not by the way prices rise, but by the Consumer Price Index (CPI). If you look back in the 1970s, the US govt admitted to inflation being over 10%. However, if you go to the 1980s, then the 1990s (and today with the implementation of the “Chained CPI”), the way they calculate CPI has changed. While officials claim that these changes are to make CPI calculations more accurate, some believe that these changes are there to produce an artificially lower inflation rate. This comes from the fact that the current methodology for calculating CPI has changed to omitting food and energy costs (two of the most expensive categories). Shadowstats.com covers this kinda stuff, and I think they’re worth checking out. Not only that, but people still believe the US govt and the Federal Reserve, so when they say that inflation is only 1% people are very likely to believe it. So that’s where the whole “Misleading Official Statistics” comes from. Ingame, it would try to counteract the negative effects brought about by inflation, but wouldn’t last very long.

Honestly I don’t see why not make it its own category. You could argue that there aren’t that many ECONOMY policies to begin with, however I feel creating a whole new group would be better for organizational purposes. And who knows, maybe the final product will have more/less. If it turns out that there aren’t that many policies that fit under MONETARY POLICY, then I’ll be open to scrapping the group entirely. But, adding a new policy branch I feel just makes more sense because monetary policy is actually a thing, is technically separate from economic policy, and requires its own “minister” (as the game likes to call them).

Thanks! I saw the file and downloaded it. I’ll be checking it out in detail pretty soon.


#7

The reason not to have a new policy section is that it requires modifying core game files and, as you’ve noted, the UI doesn’t support it. If you don’t add a new section, this can be a standard mod. I, and I think most people, are much more likely to give it a go if it van be easily enabled and disabled. And yes, while monetary policy is a separate thing to economic policy, so is educatiom policy separate to healthcare policy (in fact I would argue much more so), but the game groups them together for convenience.

Also, the CPI is a measure of how prices rise. There are very good reasons for using the CPI over RPI in many cases (though which you should use is situational). CPI is more stable over time, the maths behind it is much more sensible and many economists (including those not being paid by the government) agree it’s a better measure of how the average person experiences inflation. To suggest this internationally recognised measure, again which is used by many non-government economists as well, is a conspiracy to artificially lower inflation is silly. Also, as CPI is based on a basket of typical consumer goods, and reflects how people experience inflation, it needs to change over time to properly reflect people’s buying habits, which change.

-El


#8

I’ll concede yeah it’d be much more convenient to make it a standard mod. I think what I’ll do is provide an option for people to download a core mod version and a standard mod version, just to see which people find more intuitive in terms of gameplay. It doesn’t take much work to switch between writing the two so it shouldn’t hamper progress on the mod as a whole.

I know CPI is supposed to measure how prices rise, but what I meant was that the official rate of inflation, known as “core inflation”, is the entire basis of what the US govt considers inflation. Regardless of the methodology they use to calculate it, they will consider that the actual rate of inflation. Note that core inflation excludes food and energy categories due to the fact that they’re volatile (eating out several nights can be much more expensive than buying 2 weeks-worth of groceries, for example). Also, chained CPI is intended to take into account substitutes, placing more weight on substitutes that are bought and much less weight on what is being substituted. Intuitively these make sense, as you wouldn’t want random price swings to influence the overall statistic. However, these don’t take into account a few facts: why people are buying less-expensive substitutes, as well as the fact that people are still consuming energy (gas, heat, electricity, etc). Also, with food, “beverages” refers to alcoholic beverages. So a bottle of Corona is counted but Coke isn’t, for example, even though the vast majority of people buy both from time to time. The fact that the US govt really needs to look at less-expensive substitutes (for the reason that substitution of goods may be happening on such a large scale) indirectly admits that there is significant inflation. One article I read states that due to all of these facts about core CPI, its possible it does a better job of representing how people are dealing with inflation, rather than the inflation itself (and I’ve read articles with both biases for and against the idea of government fudging statistics).

To go on your point about how core inflation measurements are internationally recognized, and how non-government economists use this as well: governments all around the world are following some kind of inflationary monetary policy, and the vast majority of economists (whether in government or not) follow the Keynesian school of thought. There’s no conspiracy necessarily (I highly doubt there is one actually), rather so many people have this bias towards Keynesian economics, which touts the ideas that deficits don’t matter, inflation is necessary, spending is everything, and so on. Economists and people in government were likely raised with these ideas, so naturally there are going to be standards revolving around them. It’s like when the US government decided to include R&D as part of the GDP recently. Their mentality is that the higher the GDP, the better the economy. However by adding another metric (which hasn’t been in place at all in economic history up until now), arguably does nothing other than artificially raise a number. So the fact that this core CPI standard is internationally accepted and used only admits that other countries around the world follow the same vain of economic thought and practice.

There’s also the fact that the US dollar is the reserve currency of the world. Governments all around the world hold in their reserves US dollars more than any other currency (and it was like this since after WWII). If the world sees that the US not only has high levels of debt but also a currency that loses much of its value, the world may not be so confident in the dollar. Foreign governments/investors wouldn’t want to purchase US govt bonds at that point, so there are those incentives to artificially lower official core inflation as well if they’re in fact doing it. So I’d hope that can support that idea that governments being misleading isn’t such a silly idea.

Also, theoretically governments can lie as much as they want considering they cannot immediately and directly be held accountable (I’m talking jail time or being sued, not just losing an upcoming election), so I may as well give the player that option to do so.