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Newbie Question About Inflation

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In my budget window, when i check how much money is going to the treasury, it will say whatever amount (in this case, i had 0.0 going to my treasury, i.e. keeping my money at no losses and no gains) and then 0.16% inflation which i assume means .0016 (and not .16) x whatever the current prices are. Anyway, when i check my financial plan, it says i have 7% inflation. I don't understand 2 things:

1. why would i have any inflation when i have no additional money going to the treasury (does it matter i have money there already?)

2. why does the budget window say virtually no inflation and the treasury window claim 7% inflation?

thanks for any guidance.
 
cumulative over time

the inflation rating in the treasurey window is your country's current inflation, which is cumulative over time and does not go away until you appoint governors. The inflation percentage listed when you hover over the budget slider is the amount of increase in inflation you can expect at the current budget setting.
 
1)When the slider is set in such a way that you receive 0 ducats, you nevertheless pay the maintenance cost of the armies with your monthly income. So, you still have a minimal inflation

2) the slider displays the inflation for the current year. The book displays the cumulative inflation since the beginning of the game.
 
The only way to prevent inflation rising during the year is to have the "treasury" slider set to the extreme left, which in practice means a net monthly loss - you have to finance your troop maintenance out of annual income. Setting the slider so that "your inflation will rise by 0.10% this year" does in fact cause your inflation rate to increase by 1 percentage point, every 10 years. If it's set to the extreme right (no investment in any technology or stability) inflation rises by 1 percentage point every year. But (thankfully) the inflation rate is not applied every year - "your inflation is 25%" just means that all prices are 25% higher than they were in 1492 - and will stay at that price until your inflation goes up to 26%. They don't go up by 25% every year - which would be frightening :D
 
Originally posted by Heyesey
[...] But (thankfully) the inflation rate is not applied every year - "your inflation is 25%" just means that all prices are 25% higher than they were in 1492 - and will stay at that price until your inflation goes up to 26%. They don't go up by 25% every year - which would be frightening :D
Click to expand...

So if I lower my inflation things will get cheaper (deflation) or at least less expensive as compared to 1492's prices? As mentioned in another thread, "inflation" doesn't seem to be inflation but a price index. Did I get this right?
 
Gars,

Your annual inflation *rate* is that found on the popup with the treasury slider. The inflation *index* is the number that the game uses to increase the costs of purchases, or decrease due to mayors/governors/whichever-term-your-version-uses.

BTW, note that the costs of your army (and navy?) units increases with tech advance. So, 1492 costs are not the baseline for everything.
 
Originally posted by jlrogers
Gars,

Your annual inflation *rate* is that found on the popup with the treasury slider. The inflation *index* is the number that the game uses to increase the costs of purchases, or decrease due to mayors/governors/whichever-term-your-version-uses.

BTW, note that the costs of your army (and navy?) units increases with tech advance. So, 1492 costs are not the baseline for everything.
Click to expand...

So, how is my inflation *rate* related to the inflation *index*? I still don't really get this. If anyone know about a site or thread here where the economical system is described in detail, I'd be very interested.
 
So, how is my inflation *rate* related to the inflation *index*? I still don't really get this. If anyone know about a site or thread here where the economical system is described in detail, I'd be very interested.
Click to expand...

Think of the inflation as represented in the game as the total accumulated inflation since 1492 (like Huszics said; an index). Since that value can never can never go below zero for longer periods of time in the game, real deflation doesn't exist in the game, just temporary. So prices will never go below their 1492 level.

In short the whole inflation system is sorta messed up and doesn't make sense at all from a real economists point of view. It does 'work' in the game system though, even though it's not an accurate simulation of real inflation.

Anyway the 'rate' is added to the 'index' at the end of each month/year. Works just like any other index. But since you can't set the slider to an 'inflation rate' below zero, you can't lower your index by any normal means. The only way to lower the 'inflation index' is to promote mayors to governors (-1% 'inflation index') or if you are lucky, recieve the -33% inflation event.
 
Originally posted by Johan IV


Think of the inflation as represented in the game as the total accumulated inflation since 1492 (like Huszics said; an index). Since that value can never can never go below zero for longer periods of time in the game, real deflation doesn't exist in the game, just temporary. So prices will never go below their 1492 level.

In short the whole inflation system is sorta messed up and doesn't make sense at all from a real economists point of view. It does 'work' in the game system though, even though it's not an accurate simulation of real inflation.

Anyway the 'rate' is added to the 'index' at the end of each month/year. Works just like any other index. But since you can't set the slider to an 'inflation rate' below zero, you can't lower your index by any normal means. The only way to lower the 'inflation index' is to promote mayors to governors (-1% 'inflation index') or if you are lucky, recieve the -33% inflation event.
Click to expand...

Ok, thanks. This is quite clear to me now. I was always very paranoid of getting any inflation since I thought the prices would increase with say 5% per year and I feel much relieved now that I know it's an index. Thanks to all of you I will be able to sleep a whole lot better after an evening with EU and not having nightmares of a 5% inflation eating away my incomes. I always kept my inflation very low so I guess that's why I never realised it was in fact an index.
 
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