Inflation hurts - how do reduce it?

[Nutsack]

In my game, which I play as Denmark, I recently diploannexed Sweden, then not much later changed state religion to protestant. Not only do I have rebellious problems but also spies coming in from several catholic nations and Novgorod. Not only THAT, I also have an inflation which is soon up into the 70's - major economy killer right there. If it weren't for the inflation I could have been dealing with these problems a lot easier.

How do I kill my high inflation rate? I know you gain inflation when you have lots of money, so I try to keep my money low, doesn't help much though.

[John I Tzimisces]

You keep inflation low not by keeping your treasury low, you keep it low by not minting money...the idea is to rely on yearly income not monthly. Tax assessors and the banking idea provide bonuses to the inflation reduction.

[Spart]

Don't fight too much, it hurts your economy. When you're at peace and not doing anything special, remember to turn the army upkeep sliders down. You can safely lose some cash every month, you'll get extra in January 1st. If you're really struggling, take the national bank idea. Of course when you reach the tech required for tax assessors, inflation won' be much of a problem. Unless you start collecting gold like a madman.

[Holocaust]

Don't fight too much, it hurts your economy. When you're at peace and not doing anything special, remember to turn the army upkeep sliders down. You can safely lose some cash every month, you'll get extra in January 1st. If you're really struggling, take the national bank idea. Of course when you reach the tech required for tax assessors, inflation won' be much of a problem. Unless you start collecting gold like a madman.

Hmm, for me the wars often save my economy, not only can I raise wartaxes, but also take some money in the peace deals.

If you go to war against small factions and you got a CB on them you can earn some cash from it and make them your vassal without loosing too much stability.

[Kanaric]

I just keep minting at 0 and spend at the start of every year until my economy is strong enough and I can reduce inflation myself.

[Spart]

Sure, but I never raise war taxes and I mostly fight defensive battles in Europe. As the English, I'll just stay on my own island, because the French and Austrians in the continent hate me. They'd kick me out immediately. Plus they have insane armies, and if I try to support as much men, my inflation goes crazy.

[RusskiSoldat]

I always go for the national bank first and tend to have short wars against weak states followed by a long economic recovery.

[Francisco Montana]

I'm playing as the Teutonic Order (ID) and I've had several fairly drawn out wars against Pskov and Novgorod. I've had to raise such huge armies that I've been forced to not only raise war taxes but take out a loan (which I'm happy to report I paid back.)

But, as a result my inflation rate is at 9.8%. After reading this thread: Would it be a good idea to put my monthly intake at -1 or something? Or is zero the best I can do to fight inflation.

I need to get it under control as fast as I can before they start another damned war with me. Help!

TYIA

[John I Tzimisces]

It may be worth scrapping an idea in favor of the bank, not minting at all, (beating up on the poor jews...ID feature ID feature! Don't shoot!), and going full on stability...it luckily isn't too hard to get stability back to 0.

[Francisco Montana]

Yeah, like I was telling you on MSN; It's interesting how this game shows you that sometimes rulers had to make choices based on pragmatism rather than personal belief. When it suits me I'm nice to the jews but if I'm up to my neck in something adverse I often have to say, "Screw them."

On Topic: I didn't know a thing about this inflation stuff. I thought it went up when you didn't pay back loans, etc. How clever. Makes you keep a cap on your income. I think I'll just start a new campaign and keep this all in mind. Live and learn (that is the point I guess!)

Thanks again, JIT.

[lila-laune-bär]

Inflation is a simple mechanism. As you know, you get monthly and yearly income. The yearly income goes directly and fully into your treasury, but the monthly income is divided into the various research fields, stability and treasury. If you let monthly income go into your treasury, it's commonly referred to as "minting money". If you mint money, inflation rises. If you let all your monthly income go into your treasury, you get 1% inflation per year.
If you live off your yearly income and don't mint any money, your inflation will stay at 0%, which is what you should aim for.

There's two possible ways of decreasing inflation: The National Idea "National Bank" and tax assessors. A national bank decreases inflation by 0,1% per year, thus you can mint 10% of your monthly income without inflation increasing.
Later in the game you can build tax assessors. The inflation reduction is determined by the fraction of your provinces having tax assessors. If you've got a tax assessor in every of your provinces, you get an inflation reduction of 0,5% per year. If you've got a tax assessor in half of your provinces, you get a reduction of 0,25% per year.


If you've already got an inflation of 70%... Even if you built tax assessors everywhere and get national bank as an idea, the maximum decrease of inflation would be 0,6 % per year. So you would need 116 years without minting to return to 0% inflation.

[Francisco Montana]

Two words for you, lila-laune-bär:

Spoiler Alert, click show to read: 

Heja Sverige!

Thanks for the break down. It's very cool they've instituted an actual inflationary factor in the game. I just didn't realize. I've only had the game for a week or so (and of that time, it's crazy at my work this time of year!)

[lila-laune-bär]

Two words for you, lila-laune-bär:

Spoiler Alert, click show to read: 

Heja Sverige!

Thanks for the break down. It's very cool they've instituted an actual inflationary factor in the game. I just didn't realize. I've only had the game for a week or so (and of that time, it's crazy at my work this time of year!)

I'm no Swedish, sorry. I just like the pic, it's out of HoI2.
I'm from Austria.

[Denny Crane!]

Don't fight too much, it hurts your economy. When you're at peace and not doing anything special, remember to turn the army upkeep sliders down. You can safely lose some cash every month, you'll get extra in January 1st. If you're really struggling, take the national bank idea. Of course when you reach the tech required for tax assessors, inflation won' be much of a problem. Unless you start collecting gold like a madman.

Well the most successful game I had (before I found out bad boy points existed, still don't really understand) I had inflation hitting the 90's but I also controlled almost all of North America except the bits it wasn't economically worth colonising. I was also making massive forays into South America and controlled most of northern Italy and a bit of Europe.

So inflation is a problem but it depends if it is worth it or not. I figured once I managed peace I could quite easily build a shed load of tax assesors.

I'm playing as the Teutonic Order (ID) and I've had several fairly drawn out wars against Pskov and Novgorod. I've had to raise such huge armies that I've been forced to not only raise war taxes but take out a loan (which I'm happy to report I paid back.)

But, as a result my inflation rate is at 9.8%. After reading this thread: Would it be a good idea to put my monthly intake at -1 or something? Or is zero the best I can do to fight inflation.

I need to get it under control as fast as I can before they start another damned war with me. Help!

TYIA

Well don't worry about it until you get to government level of 27 and get tax assesors I think.

Inflation is a simple mechanism. As you know, you get monthly and yearly income. The yearly income goes directly and fully into your treasury, but the monthly income is divided into the various research fields, stability and treasury. If you let monthly income go into your treasury, it's commonly referred to as "minting money". If you mint money, inflation rises. If you let all your monthly income go into your treasury, you get 1% inflation per year.
If you live off your yearly income and don't mint any money, your inflation will stay at 0%, which is what you should aim for.

There's two possible ways of decreasing inflation: The National Idea "National Bank" and tax assessors. A national bank decreases inflation by 0,1% per year, thus you can mint 10% of your monthly income without inflation increasing.
Later in the game you can build tax assessors. The inflation reduction is determined by the fraction of your provinces having tax assessors. If you've got a tax assessor in every of your provinces, you get an inflation reduction of 0,5% per year. If you've got a tax assessor in half of your provinces, you get a reduction of 0,25% per year.


If you've already got an inflation of 70%... Even if you built tax assessors everywhere and get national bank as an idea, the maximum decrease of inflation would be 0,6 % per year. So you would need 116 years without minting to return to 0% inflation.

So there is a cap on how much you can reduce inflation

[Arakorn]

Cheers Österreich! (Did I get it right? The country name part obviously, the first is wrong) Ich kann nicht gut Deutschen sprechen. Ich bin ein grosser N00B!

[lila-laune-bär]

OK, then Heja Österrike!

Spoiler Alert, click show to read: 

At least you have good taste in tigers!

Servas Schweden.

Cheers Österreich! (Did I get it right? The country name part obviously, the first is wrong) Ich kann nicht gut Deutschen sprechen. Ich bin ein grosser N00B!

You've got it perfectly right.
And hey, anyone who learns German not as a mother tongue deserves my humble admiration, it's such a tough language to learn.

[Hells Bells]

theoretically inflation is the opposite of recession. That is inflation results from high demand + low supply. Recession results simply from low supply. Now your lucky, wait till you get recession + inflation and you get stagflation. Stagflation kills your economy faster than anything, and is one of the reasons the 70s sucked for america.

Any modern nation game that doesnt include the previous element isnt worth my time.

[lila-laune-bär]

theoretically inflation is the opposite of recession. That is inflation results from high demand + low supply. Recession results simply from low supply. Now your lucky, wait till you get recession + inflation and you get stagflation. Stagflation kills your economy faster than anything, and is one of the reasons the 70s sucked for america.

Any modern nation game that doesnt include the previous element isnt worth my time.

Firstly I wouldn't apply modern 19th/20th century economics to pre 1800 economics, and secondly inflation is only a game balancing mechanic, not a full blown economically simulated factor.

[hellheaven1987]

Ok, I did not mint any money nor do I keep more than 300 in my treasury every year, but inflation still go up 0.2 each year, did I do something wrong?? I did move my slider a bit sometimes but I never let it went beyond 0 (always go negative) and I have controlled a lot of colonies now.

Edit: I have Nation Bank idea but the inflation rate still rise up 0.1 per year.

[Garnier]

To not be minting money, your minting slider must stay at the far left, which means you will be losing money monthly. Keeping it so you mint enough money to pay off army upkeep etc, is still minting. You need to use the yearly income to do that if you don't want inflation to rise.

In my Venice MM game, I kept inflation down so that by 1553 (100 years after the start of the game) it was only at 2.5. Trouble is I wasn't making much money that I could spend on troops, lol. I got invaded after 100 years of peace, and will probably be wiped out.