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the other side of inflation.
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Zions Child
Higashikata Industries
#21 - 2011-11-16 01:45:49 UTC
Y'ALL NEED TO LEARN THAT MONETARY INFLATION IS NOT THE ONLY FORM OF INFLATION.

Definition of INFLATION

1
: an act of inflating : a state of being inflated: as
a : distension
b : a hypothetical extremely brief period of very rapid expansion of the universe immediately following the big bang
c : empty pretentiousness : pomposity
2
: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services
See inflation defined for English-language learners »
See inflation defined for kids »

Inflation is a decrease in purchasing power. Increase in the money supply is merely one way for inflation to happen, global increase in demand of a large basket of goods is also inflation.
Vmir Gallahasen
The Scope
Gallente Federation
#22 - 2011-11-16 02:25:54 UTC
Zions Child wrote:
Inflation is a decrease in purchasing power. Increase in the money supply is merely one way for inflation to happen, global increase in demand of a large basket of goods is also inflation.

In a game where resources cannot be depleted and almost anyone can acquire the basic capital goods, and especially since the people who acquire those goods tend to value their time at nothing, you're not going to see inflation due to a demand increase. You're going to see a short-term spike and then crash back to normal levels as everybody rushes to get a piece of the action. It's as simple as that.

In the real world where not everybody can grab a shovel and start digging a mine shaft for silver because it's in demand, yes you'd see inflation. RL economics aren't going to mesh perfectly with a game's pseudo economy
JitaJane
Science and Trade Institute
Caldari State
#23 - 2011-11-16 02:43:33 UTC
The value of isk is siply the ratio of the coparative value of mex or trit or isotopes to each other. Hence a change in the quantities of any of these goods has the exact same result as a change in the amount of isk Changes in any of these values can result in a lowering of the value of isk.

90% of of the time my posts are about something I actually find interesting and want to learn more about. Do not be alarmed.

JitaJane
Science and Trade Institute
Caldari State
#24 - 2011-11-16 02:47:27 UTC
Blood from a stone. Even when anyone can take a shovel and dig silver the same principals apply. As far ago as the 1500s GOLD mines were abandoned because the costs of digging up the gold (again this was back when gold WAS currency) outweighed the value of the gold accumulated. And in Eve time equity is the ultimate currency...

90% of of the time my posts are about something I actually find interesting and want to learn more about. Do not be alarmed.

Adunh Slavy
#25 - 2011-11-16 03:19:04 UTC
Vmir Gallahasen wrote:
Adunh Slavy wrote:
If the overall production of StuffX becomes more or less, then it will change in relative value to all the other stuff, regardless of it being ISK, trit or Officer Modules.

That doesn't necessarily mean inflation though. Suddenly there's 50% less mex but the same amount of trit, yes it'll cost more trit to buy mex but trit's cost isn't going to change. This scenario illustrates mex's value increasing (short term), not inflation. If mex and trit were the only two tradeable commodities, both would have to increase in price and remain at an increased price to indicate inflation



Depends on your definition of inflation and what market behavior you are attempting to predict. Hence the statement, "The OP is right, where these conversations go awry is too many different definitions of 'inflation'. Be specific, ... "

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt
Zions Child
Higashikata Industries
#26 - 2011-11-16 05:15:36 UTC
Vmir Gallahasen wrote:
Zions Child wrote:
Inflation is a decrease in purchasing power. Increase in the money supply is merely one way for inflation to happen, global increase in demand of a large basket of goods is also inflation.

In a game where resources cannot be depleted and almost anyone can acquire the basic capital goods, and especially since the people who acquire those goods tend to value their time at nothing, you're not going to see inflation due to a demand increase. You're going to see a short-term spike and then crash back to normal levels as everybody rushes to get a piece of the action. It's as simple as that.

In the real world where not everybody can grab a shovel and start digging a mine shaft for silver because it's in demand, yes you'd see inflation. RL economics aren't going to mesh perfectly with a game's pseudo economy


You bolded the wrong part. You should have bolded: Inflation is a decrease in purchasing power.
If 1 million isk buys 1 million trit today, and 500k trit tomorrow, then the currency has undergone inflation. It doesn't matter why, it doesn't matter if more isk is available in the economy, or if the supply of trit dropped precipitously, or if the demand for trit doubled. The price index has undergone inflation.

If the reason as to why 1 million trit no longer costs 1 million isk is because there is a larger quantity of isk in the economy, then that is monetary inflation.

This is semantics, you are all arguing semantics. Yes, an increase in demand/decrease in supply of a good also inflates the currency, this is not monetary inflation, it is still inflation though.
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