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Reem Fairchild
Minmatar
Military Research and Manufacturing Corp.
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Posted - 2010.01.14 09:04:00 -
[1]
 Originally by: Banana Torres
Originally by: Daphne Mezereum
Inflation?
No, cause at the same time as all this ISK is being injected into the system, miners, POSes and mission runners are creating stuff that the ISK can be spent on.
Exactly. What's happening is that Eve is becoming wealthier. Prices, overall on average, are actually relatively stable over time.
Originally by: Akita T
this whole game is just me playing with myself
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Reem Fairchild
Minmatar
Military Research and Manufacturing Corp.
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Posted - 2010.01.14 09:17:00 -
[2]
Originally by: Daphne Mezereum
lets assume that all activities either generate ISK or degenerate ISK.
Many activities don't do either of those.
Quote:
-how much of this ISK comes due to missions,
Missions inject a fair amount of money, but they also bring in modules, minerals, salvage, and faction items. That helps counteract the money brought into the system as far as inflation goes.
Quote:
mining
Adds no money whatsoever, but it brings in minerals, which helps keep inflation at bay.
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- how much ISK is injected via PLEX sales?
None whatsoever.
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- how much ISK is removed via PVP, ship and module loss?
Extremely little (from fees and sales tax) and a lot more is added through insurance. Also, the destruction of ships and modules actually helps inflation the same way adding money into the economy does.
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- how far in the positive are the (timeperiod) average ISK balances for EVE?
As long as ths number of players and the amount of goods being produced are growing at a similar pace, it doesn't really matter.
Originally by: Akita T
this whole game is just me playing with myself
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Reem Fairchild
Minmatar
Military Research and Manufacturing Corp.
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Posted - 2010.01.14 10:50:00 -
[3]
Originally by: Cibo Seidensha
The question is, if mining injects ISK into the economy. There is a direct connection from mined material to ISK over the insurance mechanism. On this basis you can calculate a base price in ISK for each material mined. So it is mining that injects ISK, because thats what a player does. It takes time and effort. The insurance is only a mechanism to cash in on that.
That's like saying 'car manufacturing causes trafic accidents'.
Many minerals that are mined will eventually cause more ISK to enter the Eve economy, but many minerals will not. Some minerals will even make ISK leave the economy (ships being insured for several periods without blowing up).
Originally by: Akita T
this whole game is just me playing with myself
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Reem Fairchild
Minmatar
Military Research and Manufacturing Corp.
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Posted - 2010.01.14 11:33:00 -
[4]
Originally by: LaVista Vista
It still doesn't support the awful argument that monetary inflation(Increase in money supply) causes price inflation(Increase in prices).
More money in the economy -> more money to buy stuff with -> people buying more stuff -> prices rising
A pretty simple case of supply and demand.
Of course, that doesn't mean that a larger money supply will always lead to inflation. It might not. It depends on what else is going on in the economy. If the money supply increases but production of goods also goes up at the same time, then the general price levels won't necessarily rise.
Originally by: Akita T
this whole game is just me playing with myself
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Reem Fairchild
Minmatar
Military Research and Manufacturing Corp.
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Posted - 2010.01.14 12:55:00 -
[5]
Edited by: Reem Fairchild on 14/01/2010 12:58:33
Originally by: LaVista Vista
And that is exactly why your argument is flawed. The fact you point it out as if it's a "small" factor.
Your supply and demand argument is too simple and doesn't take several things into account.
What do I point out as if it's a small factor? The supply of goods? If that's what you mean then no, it's not a small factor. It's a major factor, as is the money supply. In other words, supply (goods) and demand (money). The relationship between those two will determine the general price levels. If one increases more than the other or if one decreases more than the other then you will have inflation or deflation (depending).
Yes, it's complicated and there are other factors, but those are the two major ones, especially when we're talking about inflation in the long term.
Or to put it like this, increase in money supply gives inflationary pressure. It won't necessarily lead to inflation, if there are other factors to counteract it with deflationary pressures, but if everything else remains equal then it will. You wouldn't be able to just suddenly say double the amount of ISK in Eve, while everything else remains the same, and not have inflation. And you wouldn't be able to suddenly double the amount of goods in the economy and the rate of production, without getting deflation (with the exception in Eve of tech 1 ships where insurance artificially keeps the price from dropping below a certain level).
Originally by: Akita T
this whole game is just me playing with myself
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