Inflation

[Qwertqwert]

How do you limit inflation? I'm at this point paying 24% inflation and it's getting to be a lot of money.

[trev]

Cannot. It increases gradually as the game progresses, with the larger civs being hit a little harder than smaller civs. Live with it.

[vovan]

Indeed, there is no way to limit inflation. It's just a way to make it easier for small civs to survive in the world of big guys (and have a chance to win, too ).

Vovan

[Risa]

There's no way to lower the percentage. You can lower your total expense, however, to lower the total inflation.

[Son of David]

It's ironic too, because government is usually the sector of the economy which benefits from inflation.

[Amarsir]

How do you limit inflation?

Raise interest rates.

Sadly, for all that Civ IV does well, it's not much of an economic sim.

[Cornax]

Originally posted by Son of David
It's ironic too, because government is usually the sector of the economy which benefits from inflation.

"Usually"? How about "always"? Government inflates the money supply, since government and its allies are the ones who get the greatest benefit from the "new money", as they get use it first, before it causes a general increase in the price level, because a larger amount of currency is chasing the same amount of goods. And everybody else loses, as their savings lose a part of their value.

Historically and in modern times inflation of money supply, which in turn causes a general increase in prices, is done by the goverment (via various mechanisms). When commodities were used as money (gold and silver are the most familiar examples), the people in power were always looking for ways to monopolize the currency. Once they succeeded (for example, by forbidding the use of any coin other than that minted by themselves), they used various methods to create more money for themselves, such as replacing gold or silver with lesser value metals. In this manner rulers were able to fund their life of luxury and wars.

Nowadays it is even easier, as currencies are not tied to any commodity, so, for example, in the US the government can increase the money supply rather freely. The only limit to inflation of money supply is the specter of a crack-up boom (hyperinflation).

There is exactly one reason for general increase in prices, and it is the inflation of money supply. There is no simulation of this in CIV, since there is no simulation of economy in it; rather, the "inflation" in CIV is merely an arbitrary punishment for growth...

[Martin the Dane]

Originally posted by Amarsir

Raise interest rates.

Sadly, for all that Civ IV does well, it's not much of an economic sim.

And that's a good thing, 25 years ago my grandmotther gave me 5 DKK (that's Danish Kroner) to by an icecream. Well the most expencive icecream I could get cost me 2.50 today the same icecream would cost em 25 that's 1000% infaltion in 25 years, so 24% over a couple of melinia is not all that much

[Blake]

The gameplay purpose of Inflation is basically a multiplier to expenses much like the science/gold multipliers from libraries, marketplaces etc. This is to maintain the value of things like the courthouse and organized trait, and also to "force" players to upgrade their economy. It results in quite logical things like a modern army costing more to maintain than an ancient army.

It's really more of a general expense inflation than economic (text book) inflation.

[Saurus]

Does A.I suffer from inflation also by the way?

[Amarsir]

And that's a good thing, 25 years ago my grandmotther gave me 5 DKK (that's Danish Kroner) to by an icecream. Well the most expencive icecream I could get cost me 2.50 today the same icecream would cost em 25 that's 1000% infaltion in 25 years, so 24% over a couple of melinia is not all that much

Ah but the game is charging it's interest annually. If the price of your ice cream had gone up 24% a year it would cost about 541 DKK. I'd surely be skipping dessert!

Government inflates the money supply, since government and its allies are the ones who get the greatest benefit from the "new money", as they get use it first, before it causes a general increase in the price level, because a larger amount of currency is chasing the same amount of goods. And everybody else loses, as their savings lose a part of their value.

An increase in the money supply is an inflator, but not the only one. Demand-pull can cause inflationary pressures regardless of currency, as we've seen in raw materials the past few years (thanks to China's boom). If inflation causes the numerical equilibrium of all exchanges to rise, that eats into all money stores equally, including the governments'.

However, one additional thing the gov't has going for it is that in a tiered income tax system, you'll get bracket-creep as the numerical value of income rises and the cutoffs stay fixed.

Does A.I suffer from inflation also by the way?

I presume so, although on higher difficulties I'd expect it to be worse for the player. Someone with better knowledge of the XML files than I might be able to answer better.

[Solver]

The AI suffers from lighter inflation. AI has full inflation efects on Settler, and then they're reduced gradually, 70% on Noble, 20% on Deity.

[Martin the Dane]

Originally posted by Amarsir
Ah but the game is charging it's interest annually. If the price of your ice cream had gone up 24% a year it would cost about 541 DKK. I'd surely be skipping dessert!

Hmm let me se. If I have two cities in 2000BC with a total maintanence cost (city and civic) of 2 gold then without increasing the number of cities or population the cost in 1900 AC with 24% anual infaltion would be 2*1.24^3900 = 4.4*10^364 gold.

Fortunately the game does not have an anual inflation of 24%, not even a 24%/turn. I have never seen the "inflation" cost being higher than the total cost without inflation.
But then again inflation happens to the income as well so calculating the actual cost of inflation is above my econoical skills.

[Shaka II]

If you don't like inflation, then you should be organized and build 1/2 price courthouses.

Well, you don't really limit the percent inflation, just the amount that gets multiplied times the inflation rate. And don't forget about the Forbidden Palace, and civic costs, and unit costs, ... It all gets multiplied by the inflation rate.

[Qwertqwert]

I've got 36% inflation now, but I've build a bank in almost every city so I am doing better.