Questions on Economy

General discussions about the Particracy web game.

Questions on Economy

Postby Occam » Wed Jul 11, 2018 9:49 pm

Hi all,

(i) I know the in-game economy is incomplete and buggy, so I'd like to ask: to what extent are the existing values (like GDP, Tax Income, etc.) considered binding? Also, does anyone know whether the values are monthly or annual?

(ii) Is there any (recognized) list of currency values and a comparison to real-life currencies? It would be helpful to know whether a certain sum buys you a stamp or a Mansion. (I'm aware of the the I.T.B. Economy Index.) Also, is there a currency that is commonly used as a reference currency (like US Dollar or Euro in real-life)?

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Re: Questions on Economy

Postby RIS » Wed Jul 11, 2018 10:11 pm

The in-game values are not binding whatsoever though some do use it as a basis for their economic decisions no one really puts any stock into them. As those values are GDPs and the like they are annual values.

Here is the list of exchange rates though like the other in-game economic values they aren't accurate and they also don't change regardless of policies. Everyone for the longest time recognized the LOD as a one to one equivalent to the US dollar though I don't know if that is true anymore. As for the ITB economic index I am still working on it as I need to update my formula to take into account the new variables.
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Re: Questions on Economy

Postby CCP » Thu Jul 12, 2018 2:24 am

The LOD is the reference currency, like RIS said. But it isn't equivalent to any real-world currency. And players ignore the exchange rate as often as taking it into account (or probably more often than).

Prices are basically equivilant to real-world prices, but Terra GDPs per capita tend to be much lower than real-world GDPs per capita. So Terra has traditionally been RPed as poorer than the real world.

As far as in-game economies mattering (at least budgets GDPs), they were taken into account at times by the RP Team for Rankings purposes. I plan to speak with GRC members about the possibility of taking them into consideration for future Rankings. If the GRC decides to take them into account, players would be fully informed ahead of time to allow ample opportunity to make adjustments before new Rankings are issued.

EDIT: Forgot this one: Values are annual, but it's a rolling calendar, so it never resets at the new year or anything. It simply projects the coming year based on current government policy and population.
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Re: Questions on Economy

Postby Occam » Thu Jul 12, 2018 4:55 pm

Thanks RIS and CCP, that helps.
Some follow-up questions:
Are the Tax Brackets annual income too then?
Can you point me to some GDPs as reference points?
Insofar as you use some budget values for the I.T.B. Index and (possibly) the GRA Rankings, do you take absolute values or just percentages (e.g. "Trade and Industry in nation x is only 5% of the budget, therefore its economy is weak.")?

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Re: Questions on Economy

Postby CCP » Sun Jul 15, 2018 11:32 pm

Occam wrote:Thanks RIS and CCP, that helps.
Some follow-up questions:
Are the Tax Brackets annual income too then?
Can you point me to some GDPs as reference points?
Insofar as you use some budget values for the I.T.B. Index and (possibly) the GRA Rankings, do you take absolute values or just percentages (e.g. "Trade and Industry in nation x is only 5% of the budget, therefore its economy is weak.")?

Regards,
Occam


Yes, Tax Brackets are annual too.

Do you mean in-game GDPs for reference? Those can be found on each nation's budget page. For instance, Telemon's is at the top of this page, and lists everything except import/export.

I've wanted to get players involved in quantifying import/export since so much trade is RPed in game.

If you mean real world GDPs per capita vs game GDPs per capita for reference, a quick google search will give you GDP per capita for any real-world nation. So for instance, google says current US GDP per capita is $57k. This says the highest exchange rate-adjusted GDP in-game is Solentia's. Divided by 100 million people, Solentia's GDP yields a GDP per capita of ca. $3k. So the biggest economy in-game is little more than 1/5th as wealthy as the biggest real-world economy.

Budget values for GRA rankings have been percentages when used. So for instance, during the last rankings, both Vanuku's and Trigunia's military expenditures were factored into their final rankings. Here the GRC specifically noted military expenditures as a percentage of total government expenditures, and relative to both in-game GDP and real-world military expenditures.
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Re: Questions on Economy

Postby Wu Han » Mon Jul 16, 2018 8:50 pm

Personally, I completely disregard in-game GDP, since it can in no way be considered an accurate GDP calculation in the first place. The expenditure approach to calculating GDP (and which, from what I can tell the formula attempted in-game) is stated as follows:

Y = C + I + G + (X − M)

C = consumption (private expenditures in the economy, easily thought of as household expenditures, which are reliant on market prices).
I = investment (business investment in equipment and production, not financial instruments. This too would be dependent on market prices).
G = government spending (government spending on final goods, including the payment of government employees and the acquirement of arms. In so far as the government functions in a capitalist economy, this too would be at least somewhat reliant on market prices.)
X - M = exports minus imports (not included in-game and entirely reliant on market prices.)

To be clear as well, GDP by definition is a monetary measure of the market value of all the final goods and services produced in a certain period of time. I continually highlight the point market value as this game has no in-game accounting for such a system (or at least if it does, that is news to me). In so far as there are no market values, nor any exact products, GDP cannot be calculated.

Further, GDP is not the determinant measure of the wealth of a nation. Certainly it is helpful, but there has been a considerable push to account for different ways of measurement. In 2009, Nobel Prize winning economist Joseph Stiglitz called for an end to “GDP fetishism” in favour of a “dashboard” of measures to capture human welfare. "GDP fetishism" refers to the belief that GDP is the ultimate determinant of economic prosperity. This belief is certainly pervasive since it has influenced most conservative and leftist economic writing alike since the Second World War, when economies were largely focused on manufacturing, the production of raw resources, etc. However, as first world nations rapidly move away from manufacturing-based economies (of which GDP largely overstates economic performance), these days it seems that a growing fraction of innovation is not measured at all. But this is tangental...

TL;DR: GDP in-game is incorrect and it doesn't matter since there is no way to measure market prices (and CPI) fixed or otherwise, because international trade is missing, and because GDP itself is an imperfect measure of economic prosperity. Roleplay is the only legitimate means, for the purpose of this game, in judging an economy's performance.

Note: My personal argument, not necessarily indicative of the RP Committee position or something of that nature.
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Re: Questions on Economy

Postby Occam » Mon Jul 16, 2018 11:12 pm

Thank you all!

What I meant when I asked about GDP reference points, was role-played GDPs. There seems to be a consensus that the in-game values are irrelevant. Something like the wiki-list of GDPs would be perfect (thanks for the link CCP), but if I'm not mistaken the list is based on in-game values.

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Re: Questions on Economy

Postby Occam » Mon Jul 16, 2018 11:16 pm

Wu Han wrote:Personally, I completely disregard in-game GDP, since it can in no way be considered an accurate GDP calculation in the first place. The expenditure approach to calculating GDP (and which, from what I can tell the formula attempted in-game) is stated as follows:

Y = C + I + G + (X − M)

C = consumption (private expenditures in the economy, easily thought of as household expenditures, which are reliant on market prices).
I = investment (business investment in equipment and production, not financial instruments. This too would be dependent on market prices).
G = government spending (government spending on final goods, including the payment of government employees and the acquirement of arms. In so far as the government functions in a capitalist economy, this too would be at least somewhat reliant on market prices.)
X - M = exports minus imports (not included in-game and entirely reliant on market prices.)


Thanks,
but how do you determine those values?
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Re: Questions on Economy

Postby Wu Han » Tue Jul 17, 2018 2:09 am

Occam wrote:
Wu Han wrote:Personally, I completely disregard in-game GDP, since it can in no way be considered an accurate GDP calculation in the first place. The expenditure approach to calculating GDP (and which, from what I can tell the formula attempted in-game) is stated as follows:

Y = C + I + G + (X − M)

C = consumption (private expenditures in the economy, easily thought of as household expenditures, which are reliant on market prices).
I = investment (business investment in equipment and production, not financial instruments. This too would be dependent on market prices).
G = government spending (government spending on final goods, including the payment of government employees and the acquirement of arms. In so far as the government functions in a capitalist economy, this too would be at least somewhat reliant on market prices.)
X - M = exports minus imports (not included in-game and entirely reliant on market prices.)


Thanks,
but how do you determine those values?
Regards,
Occam


My answer was with regard to the in-game values specifically. I presume in your question you are asking how to determine market values? I believe it would be very unfeasible given that there simply are no finite products which are traded, the breadth of products produced in an economy is so broad, and there is literally no supply or demand at all. What do you think the price of a pair of sneakers in a given country should be, and expressed in one currency? What about the price of a haircut? Gasoline?

Further, there is no in-game currency in which we could measure prices, since exchange rates are static and no in-game currency has a similar purchasing power to a RL currency (or so I've been told).

Because building such a detailed economic model is unfeasible, I think economics should proceed much the same as military: that is, guided by story and role-play rather than calculations. Wouter certainly has his hands full when it comes to trying to implement macro-economic systems in Particracy 2 :P

My simple solution for this game, if I may, and which I think would be despised by the community, would be to introduce a single international currency pegged to the USD and then peg all commodity prices etc. to their RL price in USD. If people were desperate for GDP values, such could be set by a group like the RP Committee after an assessment or something. All nations which are in the RP Accord or something similar would agree to abide by the international currency etc. Not sure how this might impact budgets and such, to the extent that people take them seriously. Anyway, this is unlikely to ever be implemented, but again just thinking out-loud.
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