Market Discussions

During the market talk at fanfest it was said the only time isk leaves the system is when it is paid as a tax or fee to npcs. Without adding new taxes or fees CCP has increased the amount of isk leaving the system. Now that minerals prices are so high and everything on the market is more expensive, every transaction is costing more in tax. This means a lot more isk is leaving the system per transaction.

Initially the major flaw I see in this thought is, by increasing prices the also slow down the market and possibly the amount of isk leaving the system per day is about the same. I would love to see some stats on this.

Like many many things in economics, There are backlashes.

As a general rule, When leaving equillibrium, the second movement is weaker, and mostly curbs down a trend, but cannot reverse it.

So if we follow your valid logic:

Inflation makes prices higher -> more ISK is leaving the game through taxes -> inflation decreases.
It's logical to think that the isk sink increases, yet it's not possible for the increase in tax to decrease inflation.

That beind said there's another problem, and that's increased aggregated demand. That means that if you run a regression to explain the high mineral prices, i would bet a billion ISK that the total ISK in the game isn't the biggest reason.

tl;dr - inflation is caused by more people wanting to buy more stuff, and not just more isk in the system.

Johnny