Economic Health

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Economic Health

Postby Crucis on Thu 29 Apr 2010 01:50

Here's an idea that I came up with, and have discussed with Cralis on and off for a couple of weeks... "Economic Health". EH represents the ups and downs that any economy may have from month to month in a relatively simple manner.



ECONOMIC HEALTH (EH)
(maybe there's a better term)

An empire's economic health (EH) is a general indicator of whether the empire's economy is in a depression, a recession, normal, an upswing, or a boom. However, it also represents the amount of available discretionary income the empire has for its normal “Starfire” operations. This system assumes that when times are bad, reduced incomes represent both reduced tax incomes and increased domestic spending. On the flipside, when times are good or during wartime, increased incomes represent increased tax revenues and a shift from domestic to military spending.

The "economic health" roll would be made at the start of each month against the Upswing/Downswing Table below and its effects are felt immediately. EH is represented as a straight multiplier to an empire's total income, including trade, before the empire is allowed to spend money.


The Economic Health Table

CodeEconomic StatusEH%
EH1Depression80%
EH2Deep Recession85%
EH3Moderate Recession90%
EH4Mild Recession95%
EH5Normal100%
EH6Mild Upswing105%
EH7Moderate Upswing110%
EH8Strong Upswing115%
EH9Economic Boom120%




The Upswing/Downswing Table

Die Roll (1d10)Result
1 or less-2 (strong downswing)
2-3-1 (mild downswing)
4-70 (no change)
8-9+1 (mild upswing)
10 or more+2 (strong upswing)


And what you'd do is apply the result to the current EH number. For example, if you were currently in a Boom (EH9) and had a result of -2 on the die roll, your EH would drop to EH7, a moderate upswing economy with a 110% EH modifier. Or vice-versa, if you are currently in a Depression, and get a +2 result, your EH will have increased to EH3, a moderate recession economy with a 90% EH modifier.

EH status cannot go any lower than EH1 or any higher than EH9. Thus, a negative EH result when you are already at EH1 simply keeps you at EH1.


Modifiers to the Upswing/Downswing Die Roll

War is the most significant modifier to the Upswing/Downswing Die Roll. However, the war must be serious enough to justify a modifier. No modifiers are given for being at war with an LEL.

In Ultra terms:
If a race is eligible to use Crash R&D Type A, then it gets a +1 modifier. Or, if a race is eligible to use Crash R&D Type B, then it gets a +2 modifier. Note that the race does not have to be actually conducting any crash R&D, only that it must be eligible to do so. In both of these cases, so long as the race continues to be eligible to conduct Crash R&D, it gets the modifier.

Lastly, if the race is at war with a genocidal enemy, as defined in R&D rule N14, bullet #1, then the bonus is an automatic +2 for the duration described.

Only one of these wartime modifiers can be used in any month, thus making the maximum modifier +2.

In 3e terms:
If the race is “actively at war”, then it will receive one of the following bonuses.

If the race is “actively at war” against an HEL enemy whose “known” TL is no more than 2 than its own, then it gets a +1 modifier.

If the race is “actively at war” against an HEL enemy whose “known” TL is greater than its own, then it gets a +2 modifier.


The next question then is ... what happens when the war is over? (Heck, how does one define a war being "over", for that matter?)

When the war is "over" (however that's defined), the race takes a one-time -4 modifier to the Upswing/Downswing die roll. Note that one only takes this post-war modifier if the war triggered one of the positive wartime modifiers listed above, even if none of those modifiers happened to be active in the previous month.

Tangent: When is the war over? This is a tough question. If your race and the enemy race agree to a peace treaty, that's a pretty safe sign that the war's over. Or if you conquer a strong, but still single system NPR's home system, that's also a fairly obvious sign. But what if you're facing a multi-system enemy? How do you really know when the war is "over"? Maybe the answer is semi-simple ... if the race no longer qualifies as being "Actively at War", then it could take the penalty... though a -4 modifier may seem a bit harsh if the war is still going on, but not exactly qualifying as "Actively at War".




Other potential Upswing/Downswing modifiers:

A badly failed First Contact situation in the previous month might be seen as a mild negative that could be worth a -1.

A new trade treaty with an HEL race in the previous month is worth a +1 modifier. Two or more new trade treaties with HEL races in the previous month are worth a +2 modifier. A trade treaty (with an HEL race) lost in the previous month is worth a -1 modifier. A partner transitioning into amalgamation would not count as a lost trade treaty.


If the economy took a downswing in the previous month, it is likely that that trend will continue, and thus there is a -1 modifier. OTOH, if the economy had an upswing in the previous month, it is likely that that trend will continue, and thus there is a +1 modifier.



Ok, that's it.... Comment away...
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Re: Economic Health

Postby drakar on Thu 29 Apr 2010 07:56

I like the idea though I'm not 100% sure that I am sold on the modifiers. The war one in particular, I can understand the increase in military but you may want to add some realism in to this and have a bonus for a short time but as the opposing forces go at it they begin to have less to spend and thus they begin to take budget cuts and to show this they could begin to take a minus(Take the United States current Economy for instance). Realistically its more likely that someone will go bankrupt over a war. I also think that this would do away with the radical -4 for post war as most of the time economies begin to spring back in a post war situation as they now no longer have to pay as many active troops, training quotas go down, and they no longer need to produce as much ammunition to keep everyone in supply. Now the +1/-1 trend modifier i can see but to a certain point i think that it could be cut as soon as EH3 or EH7 is reached and then become pure luck whether they can pull out of the recession or slip into depression on some luck or misfortune.
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Re: Economic Health

Postby Crucis on Thu 29 Apr 2010 09:53

drakar wrote:I like the idea though I'm not 100% sure that I am sold on the modifiers. The war one in particular, I can understand the increase in military but you may want to add some realism in to this and have a bonus for a short time but as the opposing forces go at it they begin to have less to spend and thus they begin to take budget cuts and to show this they could begin to take a minus(Take the United States current Economy for instance). Realistically its more likely that someone will go bankrupt over a war. I also think that this would do away with the radical -4 for post war as most of the time economies begin to spring back in a post war situation as they now no longer have to pay as many active troops, training quotas go down, and they no longer need to produce as much ammunition to keep everyone in supply.


A few points here...

A. I'm making the strong assumption that the income that the player sees and can spend does not represent the government's total income. I'm assuming that there's a significant portion that's hidden and represents domestic spending in all its various forms. I am not allowing for the player to be able to have access to this directly.

What I am allowing for is that if economic times are good and/or the empire is engaged in a serious war, the government will shift its overall spending priorities and make some of the money that would have gone to domestic spending available for the player's discretionary spending. And in bad times, the amount of income available for the player's discretionary spending is reduced due to a) reduced tax revenues and b) a shift in spending priorities towards domestic spending.



B. I am not going to allow for true deficit spending, for a few reasons. First of all, managing true deficit spending can be rather complex, so I'm making the assumption that the actual government budget is being held in balance, and that the increases you do see in income represent increases in tax revenues as well as a shift in government spending priorities away from domestic spending and towards military spending.

Secondly, DS would be the player to have to track the government debt and pay some sort of interest on that debt. I don't want to go this route because it seems likely to create rules that would be easy to abuse. You'd have to keep a running total of the Debt, and pay a monthly interest fee of something like 1% on that Debt just to carry the Debt without even paying it down. Also, if you didn't pay the interest on the debt, the rules could start getting really nasty and complex when you have to try to determine what the effects of failing to pay the interest incurs. I suppose that the interest rate could increase. Or some governments could try outright writing off the debt, but incur a risk of pissing off its creditors. (Of course, certain government types might no care about pissing off creditors, though it would likely force those creditors to either go go bankrupt and/or later on be unwilling to support later debt.)

Frankly, this is all too complex for what my taste. I think that I'd rather just assume an underlying balanced economy, and simply let the EH status represent shifting spending priorities within that balanced budget.


C. The point of the post-war modifier isn't simply to represent some sort of post-war economic recession. It's also meant to represent a shift in the government's underlying spending priorities away from discretionary (military) spending and back towards domestic spending. I could have gone with a multi-month -1 post-war modifier to show a slower shifting of these priorities, but I really didn't know how to balance the length of time with the length of the war, so I opted for a single big post-war modifier. Also remember that the post-war modifier is only incurred IF the war was serious enough that the empire had received a positive war economy modifier.


D. Also note that the wartime modifiers only kick in if the war is sufficiently difficult. A TL8 empire going to war against a little TL1 NPR wouldn't cause the wartime modifiers to be triggered. Also, even if the war is against a sufficiently high EL race, it still has to qualify as "Actively at War", which has some fairly restrictive limitations... so even against that sufficiently high EL race, you could be in a relatively quiet war and not cause the modifiers to be triggered. The "Actively at War" requirement pretty much sets the bar high enough that the empire must feel fairly threatened in the short term for the modifiers to be triggered.



Now the +1/-1 trend modifier i can see but to a certain point i think that it could be cut as soon as EH3 or EH7 is reached and then become pure luck whether they can pull out of the recession or slip into depression on some luck or misfortune.


Drakar, the point is to try to make good times and bad times have a bit of life of their own. And even with these modifiers, if you were on negative side, you'd still have a 60% chance of pulling out of the downswing.

However, it does occur to me that the text would need to be a bit modified so that it's more clear that the trend modifier refers to what the previous month's trend was, not what its EH status was. Thus, if the economy is trending down, there's a slight tendency that it will continue to trend downward, and vice versa. But even if you have a negative trend, the chance is only 40% that the negative will continue but a 40% chance that the trend will flatten out or a 20% chance that it will be reversed. For now, I'm comfortable with this.


One option that I've considered is for the empire to make a conscious decision to increase its domestic spending out of its discretionary account (which is what the player is spending). If you spend 5% of the current month's total income, you'd get a +1 modifier to the next month's die roll. And possibly if you spend 10% of the current month's total income, you'd get a +2 modifier to the next month's die roll. BTW, note that this spending only provides a die roll modifier, not a guarantee of result.

I worry that this sort of thing could be abused by trying to make these investments to try to get the economy into the upswing side, and then stop the domestic spending and try to ride a trend. It might be possible to only allow this sort of additional domestic spending when the economy is on the down side (i.e. EH statuses of EH1-EH4). Still, I worry that this additional "discretionary domestic spending" concept could be meta-gamed, which is why I'm not terribly fond of it at the moment.
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Re: Economic Health

Postby drakar on Thu 29 Apr 2010 14:30

Crucis wrote:B. I am not going to allow for true deficit spending, for a few reasons. First of all, managing true deficit spending can be rather complex, so I'm making the assumption that the actual government budget is being held in balance, and that the increases you do see in income represent increases in tax revenues as well as a shift in government spending priorities away from domestic spending and towards military spending.


I wasn't promoting deficit spending at all. That would be much to complex and could become a hassle that no one wants to deal with. I would just think that a positive bonus throughout a whole war would become slightly unbalancing, perhaps placing it in a certain time frame while the population still supports the cause, except in the case of a known genocidal race where they would constantly support it, where they would be willing to donate money to this war versus later where they would tire of it and begin to tire of war.

Crucis wrote:However, it does occur to me that the text would need to be a bit modified so that it's more clear that the trend modifier refers to what the previous month's trend was, not what its EH status was. Thus, if the economy is trending down, there's a slight tendency that it will continue to trend downward, and vice versa. But even if you have a negative trend, the chance is only 40% that the negative will continue but a 40% chance that the trend will flatten out or a 20% chance that it will be reversed. For now, I'm comfortable with this.


Worded like this it is much less likely to cause misinterpretation. I can understand if there is a chance to flatten and start back to a random then it would be much more appealing.

Crucis wrote:One option that I've considered is for the empire to make a conscious decision to increase its domestic spending out of its discretionary account (which is what the player is spending). If you spend 5% of the current month's total income, you'd get a +1 modifier to the next month's die roll. And possibly if you spend 10% of the current month's total income, you'd get a +2 modifier to the next month's die roll. BTW, note that this spending only provides a die roll modifier, not a guarantee of result.

I worry that this sort of thing could be abused by trying to make these investments to try to get the economy into the upswing side, and then stop the domestic spending and try to ride a trend. It might be possible to only allow this sort of additional domestic spending when the economy is on the down side (i.e. EH statuses of EH1-EH4). Still, I worry that this additional "discretionary domestic spending" concept could be meta-gamed, which is why I'm not terribly fond of it at the moment.


On this I would skip the +2 but leave the +1 for those players who were struggling and needed a way to counter balance a bad roll. I agree that this should definitely be limited but would leave it more to a EH1-EH2 where the government tries to pull out of the Depression and allow a recession occur due to the natural variations of the economy and its fluctuating elements.
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Re: Economic Health

Postby Crucis on Thu 29 Apr 2010 15:02

drakar wrote:
Crucis wrote:B. I am not going to allow for true deficit spending, for a few reasons. First of all, managing true deficit spending can be rather complex, so I'm making the assumption that the actual government budget is being held in balance, and that the increases you do see in income represent increases in tax revenues as well as a shift in government spending priorities away from domestic spending and towards military spending.


I wasn't promoting deficit spending at all. That would be much to complex and could become a hassle that no one wants to deal with. I would just think that a positive bonus throughout a whole war would become slightly unbalancing, perhaps placing it in a certain time frame while the population still supports the cause, except in the case of a known genocidal race where they would constantly support it, where they would be willing to donate money to this war versus later where they would tire of it and begin to tire of war.


There isn't a positive die roll modifier for the duration of the war. There's a positive die roll modifier only as long as they meet the qualifications of Actively as War, etc. "Actively at War" isn't an easy standard to meet.

Just go read Ultra rule N14 (IIRC) and you'll see what I mean.



Crucis wrote:However, it does occur to me that the text would need to be a bit modified so that it's more clear that the trend modifier refers to what the previous month's trend was, not what its EH status was. Thus, if the economy is trending down, there's a slight tendency that it will continue to trend downward, and vice versa. But even if you have a negative trend, the chance is only 40% that the negative will continue but a 40% chance that the trend will flatten out or a 20% chance that it will be reversed. For now, I'm comfortable with this.


Worded like this it is much less likely to cause misinterpretation. I can understand if there is a chance to flatten and start back to a random then it would be much more appealing.


The chance that the downward trend will bottom out (or vice-versa) is always better than 50%. The +/-1 modifier only slightly increases the chance that the trend will continue.

Crucis wrote:One option that I've considered is for the empire to make a conscious decision to increase its domestic spending out of its discretionary account (which is what the player is spending). If you spend 5% of the current month's total income, you'd get a +1 modifier to the next month's die roll. And possibly if you spend 10% of the current month's total income, you'd get a +2 modifier to the next month's die roll. BTW, note that this spending only provides a die roll modifier, not a guarantee of result.

I worry that this sort of thing could be abused by trying to make these investments to try to get the economy into the upswing side, and then stop the domestic spending and try to ride a trend. It might be possible to only allow this sort of additional domestic spending when the economy is on the down side (i.e. EH statuses of EH1-EH4). Still, I worry that this additional "discretionary domestic spending" concept could be meta-gamed, which is why I'm not terribly fond of it at the moment.


On this I would skip the +2 but leave the +1 for those players who were struggling and needed a way to counter balance a bad roll. I agree that this should definitely be limited but would leave it more to a EH1-EH2 where the government tries to pull out of the Depression and allow a recession occur due to the natural variations of the economy and its fluctuating elements.



We'll see...

Interestingly, I didn't actually intend to create this EH concept. It just sort of hit me during a chat with Cralis... as well as some comments from PaulM over on the Aurora Bd... I started writing it up and it just flowed from there... ;)
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Re: Economic Health

Postby drakar on Thu 29 Apr 2010 15:09

I think it is a good idea and could make for a more economically diverse game instead of keeping it cookie cutter on the economics.
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Re: Economic Health

Postby Crucis on Thu 29 Apr 2010 15:13

drakar wrote:I think it is a good idea and could make for a more economically diverse game instead of keeping it cookie cutter on the economics.


The one thing I don't like about the idea is the name "Economic Health". I wish I had a better name for the concept...
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Re: Economic Health

Postby tmul4050 on Sat 19 Jan 2013 22:38

How about Economic Strength as a name. Or even Economic Status (It says that on the table)

You could also think of modifiers depending on the type of Government. Some governments can very restrictive economically. Also you might want to think of flow on effects to trading partners. SAy if you economy contracts then a -1 mod to all trading partners, and a +1 if your economy expands.
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Re: Economic Health

Postby Cralis on Sun 20 Jan 2013 23:19

Economic Health is a GREAT name for this, because we actually use that terminology in economics.

But I went back to read through this because I had forgotten about it, and was thinking on it. The modifiers make this seemingly based on Keynesian economics and there is one thing missing from this: the ability to spend money (government spending) to increase consumption and thus increase economic output. Where this becomes important is in recessions when consumer spending drops.

So the bottom line would be something like: spend Y MCr to offset a -1 modifier. The idea would be that the government could try to offset any negatives.

One step further, you could spend xY MCr (where x is some sort of modifier to make it cost more) to allow the player to give +1 bonus above zero. In keeping with it's most useful time, and to prevent using to boost an economy that is already doing well, I'd say you could only do this when suffering from a recession. That and the fact that if you were to boost a good economy you run the risk of monetary shocks, and we really don't want to try and model that into the system.

Given all this, I think this is a neat idea. I'd probably give more modifiers (+1 when a population grows to small or larger, or -1/2/3/4 if losing a small/med/lg/vlg world, for example), but I'd have to think on those more. The problem with these modifiers (and real-life economics) is that the suffering empire will only suffer more. But that's how economics really works...
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Re: Economic Health

Postby tmul4050 on Thu 24 Jan 2013 08:43

What if you crank taxation up (stalinist method), would that be a modifierer.
Stalin actually did something like that in the 1930's, when he crunched the agricultural sector (ok I am simplifying). This had the effect of giving him tremendous economic clout (control of 50% or so of the nation GDP), which he used to industrialise the soviet union. It worked but it had serious side effects (I don't think soviet agriculture ever really recovered). Anyway (tangent ended :) ) could you do similar and what would the modifier be? I do remember that there is a economic tactic in the game to rip income out of a planet, at the increase risk of revolt.
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