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The idea behind inflation in real life is that it is created by printing more money than what the currency is actually worth, fiat currency is supposed to be representative of the value of something and ISK is a fiat currency. In real life fiat currency was originally used as a receipt to get gold and silver from banks which stored it all for customers. ISK currently is representing nothing because it is virtual and the virtual items it is being used with can also be 'spawned' out of nothing, there are no hard caps on anything that CCP creates in EVE.

Therefore I would always argue that the whole market in EVE is inflationary, this is why when you get new features added like incursions which generate more ISK you get a spike in prices which is easy to spot. The problem here is that people are just nitpicking like in real life and not looking at the bigger picture.

The problem isn't with the game features, it's with the game itself and the way it's designed, all MMORPGs that try to mimic real life markets are the same, I would say most of those statistics you have there are made up too, hope my explanation helped some but that's the way I see it.

TLDR: Both items of value and ISK can be spawned out of nothing and that is causing the whole market to be inflationary

Because in real life gold and silver have REAL value.

And that's why there was never a global depression when we used the gold standard.

Im going to go smoke some pot now, and use the pages of my history book roll the joint. I can just use wikipedia now like everyone else. [sic]

EvE economy is not broken but your post is.

1) Compounding 1% a month does not make 12% a year

2) 12% inflation a year in "many RL countries is pretty good" makes me wonder what you are smoking.

And ISK disappears into nothing too.

DrEyjoG has done some great presentations at FanFest about the economy. I think they are all up on YouTube.

If the whole market was inflationary, you would see a steady rise in prices since the beginning of Eve. You have instead seen a steady decrease in prices.

Latest Economic Devblog with Eve Economy Main Price Indexes

The last economic update was with Nov data (which is not recent enough), but hopefully there will be an economic presentation at FanFest again.

CCP_Diagoras has been putting up some really interesting stats for Eve, and many of them have been economic related. If people were looking at these it would end a few of the misconceptions that exist out there.

TL;DR - You're wrong about the underlying phenomenon of inflation in Eve over the entire historical period.

from a monetary operations perspective there's nothing wrong with the eve system, it is in fact great (and lol at the gold people).

* CCP is the monopoly issuer of all ISK, it controls all of what you call 'sinks' (rl: taxes) and 'faucets' (rl: gvt spending).
* The inherent value of ISK comes not from some noxcium convertability (lol gold), but it's usage in the 'sinks' (to get a bpo/skillbook/clone/?? requires you to spend isk).
* Ratting etc is essentially a job guarantee, nobody is unemployed in eve.


in fact the eve system could be used to explain the nature of modern fiat money in a monetarily sovereign country to a great deal of people stuck in some pseudo-gold-standard paradigm.

1.01^12 = 1.127, so thats 12.7% inflation in a year, and the british economy almost collapsed (if you believe the fear mongering media) at less than 6% inflation. So, no 12% is not good at all for RL countries.

See my Sig.

EVE IS DYING BECAUSE I ******* SAID SO!

All of the sinks in the game combined are almost nothing to stop inflation. Some pilots simply don't get podded that often and don't need to clone themselves so much. Insurance cost practically nothing. Platinum insurance on some of the most expensive ships in the game is considered pocket change to many.

The cause is that hundreds maybe thousands of people at a time are constantly running incursions making billions of ISK for little risk. Every month billions of ISK are spontaneously created out of nowhere to pay incursion runners.

Look, PLEX cost roughly 250 mil each before Incursions. Now, they are over 500 mil each. Yet some people claim that has nothing to do with ISK being shat out by CONCORD.

Although to be fair, the EVE economy is superior to other MMO economies. Seriously runescape? Your most expensive item is a freaking paper hat?