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Isk inflation

Author
Nevyn Auscent
Broke Sauce
#21 - 2016-03-25 00:07:16 UTC
Teckos Pech wrote:
The fact that we do not have well developed financial markets limits the impact of new ISK on the inflation rate. Still, I bet there is a correlation to ISK creation and inflation. Checking that with empirical data will be a challenge.

There is a correlation, but it's also tied into material creation. To take it to it's simplest level, If Isk creation > material creation, we are likely to get inflation. If material creation > isk creation we are likely to have deflation.
This ignores all the other factors like saving isk which then doesn't affect the market till it gets used again, and saving materials.

But since we also know that material creation is happening significantly faster than destruction, a small increase in the overall quantity of isk is very unlikely to ever create inflation, and is more likely to simply offset deflation.

I.E. There is no inflation issue currently, EVE has never has a serious inflation issue. Price shifts are due to market changes and production cost changes.
Teckos Pech
Hogyoku
Goonswarm Federation
#22 - 2016-03-25 05:36:01 UTC
Nevyn Auscent wrote:
Teckos Pech wrote:
The fact that we do not have well developed financial markets limits the impact of new ISK on the inflation rate. Still, I bet there is a correlation to ISK creation and inflation. Checking that with empirical data will be a challenge.

There is a correlation, but it's also tied into material creation. To take it to it's simplest level, If Isk creation > material creation, we are likely to get inflation. If material creation > isk creation we are likely to have deflation.
This ignores all the other factors like saving isk which then doesn't affect the market till it gets used again, and saving materials.

But since we also know that material creation is happening significantly faster than destruction, a small increase in the overall quantity of isk is very unlikely to ever create inflation, and is more likely to simply offset deflation.

I.E. There is no inflation issue currently, EVE has never has a serious inflation issue. Price shifts are due to market changes and production cost changes.


Of course, if the money supply and the real economy grow at the same rate and the number of transactions do not change, then inflation will be zero. But I'm not sure we know the rate at which real goods and services are being created. Still using Anhenka's numbers inflation is likely to be rather lower than most people think. Keep in mind that even a 0.5% rate of inflation/month is an annualized inflation rate of a bit over 6%.

To summarize, most are in agreement, inflation is not a problem.
Thus, no need for more ISK sinks, especially placed on people producing real goods.

Nothing more to see here....let the thread fall of the front page.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Teckos Pech
Hogyoku
Goonswarm Federation
#23 - 2016-03-25 05:44:39 UTC
Anhenka wrote:


Could be wrong, I have no fancy programs scraping and collating that information for me. Just an eyeball of the various ship prices based off the Amarr market. Too lazy to fly to Jita right now. Too late. Will poke more at it in the morning.


Would a fancy program capture things like services? Say for example Red Frog? If not, then you'd need to account for real services too if you are to try and get a handle on in game "GDP".

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Donnachadh
United Allegiance of Undesirables
#24 - 2016-03-25 14:00:34 UTC
Nevyn Auscent wrote:
But since we also know that material creation is happening significantly faster than destruction[

And yet the market data proves this portion of your statement as false.
If production of materials exceeded demand created by destruction of said materials there would be either 1. a precipitous drop in prices across the entire spectrum of the markets, or 2. there would be a slow but steady drop in prices across the markets. And yet by your own admission when you throw out the obvious anomalies in market like the newest OP hull of the month prices are and have been relatively stable over time.
Nevyn Auscent
Broke Sauce
#25 - 2016-03-25 19:07:07 UTC
Donnachadh wrote:

And yet the market data proves this portion of your statement as false.

CCP says you are wrong.
http://content.eveonline.com/www/newssystem/media/70094/1/01_-_ck3wge5.png

Production outstrips destruction by about 2 Trillion a day or 60 Trillion a month per the scale of that graph.
Again however, stockpiled goods which aren't in constant movement don't count towards inflation or deflation.
Anhenka
The New Federation
Sigma Grindset
#26 - 2016-03-25 19:34:20 UTC  |  Edited by: Anhenka
Nevyn Auscent wrote:
Donnachadh wrote:

And yet the market data proves this portion of your statement as false.

CCP says you are wrong.
http://content.eveonline.com/www/newssystem/media/70094/1/01_-_ck3wge5.png

Production outstrips destruction by about 2 Trillion a day or 60 Trillion a month per the scale of that graph.
Again however, stockpiled goods which aren't in constant movement don't count towards inflation or deflation.


Wish there was a included definition of "Destroyed", as well as a clear labeling of axis to show what is happening.

I'm fairly sure that the graph is not being plotted as an accurate measure of isk production vs destruction per day. A quick glance look at http://content.eveonline.com/www/newssystem/media/70094/1/05_-_26f4xYV.png Suggests a total monthly production amount of roughly 80-90 Trillion.

I'm have a very very hard time believing that of that, 60 Trillion is excess production, that 2/3 or more of all production in the game is getting stockpiled.

If the information for "Destroyed" is based on things actually blowing up, it could be excluding all Fuel block consumed in towers, ammo fired, drones that didn't die while still in the ship, trashed items, etc.

The definition of "End Products only" Is also rather confusing. Does this automatically exclude all PI, moon minerals, standard materials, datacores, t1 and t2 ship components, etc from production category until they are used to construct a final item that is not the component of anything else? If I make capital Armor Plates, does it count those as "End products", or not? If it does count that as production, then actually building a capital from them would double dip in the production category, but not the destruction one.

TLDR: Lies, damn lies, and statistics, as the saying goes. (Not an attack on you, these numbers are just incredibly vague)
Teckos Pech
Hogyoku
Goonswarm Federation
#27 - 2016-03-25 19:54:23 UTC
Anhenka wrote:
Nevyn Auscent wrote:
Donnachadh wrote:

And yet the market data proves this portion of your statement as false.

CCP says you are wrong.
http://content.eveonline.com/www/newssystem/media/70094/1/01_-_ck3wge5.png

Production outstrips destruction by about 2 Trillion a day or 60 Trillion a month per the scale of that graph.
Again however, stockpiled goods which aren't in constant movement don't count towards inflation or deflation.


Wish there was a included definition of "Destroyed", as well as a clear labeling of axis to show what is happening.

I'm fairly sure that the graph is not being plotted as an accurate measure of isk production vs destruction per day. A quick glance look at http://content.eveonline.com/www/newssystem/media/70094/1/05_-_26f4xYV.png Suggests a total monthly production amount of roughly 80-90 Trillion.

I'm have a very very hard time believing that of that, 60 Trillion is excess production, that 2/3 or more of all production in the game is getting stockpiled.

If the information for "Destroyed" is based on things actually blowing up, it could be excluding all Fuel block consumed in towers, ammo fired, drones that didn't die while still in the ship, trashed items, etc.

The definition of "End Products only" Is also rather confusing. Does this automatically exclude all PI, moon minerals, standard materials, datacores, t1 and t2 ship components, etc from production category until they are used to construct a final item that is not the component of anything else? If I make capital Armor Plates, does it count those as "End products", or not? If it does count that as production, then actually building a capital from them would double dip in the production category, but not the destruction one.

TLDR: Lies, damn lies, and statistics, as the saying goes. (Not an attack on you, these numbers are just incredibly vague)


I agree, it would be nice to see what is used in each of those time series.

Note, I'm not saying anyone is wrong here, just that we should be careful drawing conclusions from this data.

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."--Friedrich August von Hayek

8 Golden Rules for EVE Online

Nevyn Auscent
Broke Sauce
#28 - 2016-03-25 20:22:52 UTC
Anhenka wrote:


Wish there was a included definition of "Destroyed", as well as a clear labeling of axis to show what is happening.

I'm fairly sure that the graph is not being plotted as an accurate measure of isk production vs destruction per day. A quick glance look at http://content.eveonline.com/www/newssystem/media/70094/1/05_-_26f4xYV.png Suggests a total monthly production amount of roughly 80-90 Trillion.

I'm have a very very hard time believing that of that, 60 Trillion is excess production, that 2/3 or more of all production in the game is getting stockpiled.

If the information for "Destroyed" is based on things actually blowing up, it could be excluding all Fuel block consumed in towers, ammo fired, drones that didn't die while still in the ship, trashed items, etc.

The definition of "End Products only" Is also rather confusing. Does this automatically exclude all PI, moon minerals, standard materials, datacores, t1 and t2 ship components, etc from production category until they are used to construct a final item that is not the component of anything else? If I make capital Armor Plates, does it count those as "End products", or not? If it does count that as production, then actually building a capital from them would double dip in the production category, but not the destruction one.

TLDR: Lies, damn lies, and statistics, as the saying goes. (Not an attack on you, these numbers are just incredibly vague)

I'm pretty sure the End products only is to exclude double dipping. Can bug Quant in the Dev blog thread for details on that if he didn't already clarify somewhere in there. Destruction could be excluding those things you mentioned yea, but I'd say those are actually a small portion of what gets destroyed so it's not going to be out by any significant factor. 10-20% maybe, but that moves from 1 to 1.2 at best.
I can however believe that 2/3rds of all production is stockpiled. It matches what we know from other production/destruction threads. That there is a lot of stuff sitting there accumulated in player storage that never gets used. And is why the big alliances are so unshakable unless they fall apart internally because of those years of stockpiling. Think Titans built vs Destroyed for instance.
And a per day scale matches the actual plot points scale. If you look at the actual line rather than the best fit line.
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