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Has anyone been able to pin the average yearly inflation in Eve?

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Idol1
Caldari Provisions
Caldari State
#21 - 2013-05-16 17:42:23 UTC
You have to look back thru all the old expansions to see how many more ways isk is coming into the game. Wormhole products sold to npc vendor, complexes, missions (along with higher level missions thus higher paying) ect... and compare that to how many ways isk is going out of circulation.

Shouldn't be too hard for someone with a good knowledge of the game to do.
Vaerah Vahrokha
Vahrokh Consulting
#22 - 2013-05-16 18:02:22 UTC
In the Fanfest panel, Dr. Ejyo shown that inflation is not a big concern nor it's that huge or relevant as people love to say.

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MacLuven
EL Bernays School of Strategic Communication
#23 - 2013-05-20 15:14:33 UTC  |  Edited by: MacLuven
mechtech wrote:
MacLuven wrote:
Monthly Eve Inflation Rate Graph (CPI, Lifetime to Feb2012)

This is an easy graph to create if DrEyjoG and the Econ guys are still providing the data.


Eh, that's BS. Maybe it's true from a purely monetary standpoint, but when I started I remember barely being able to afford a T2 frigate after a month of play, and a battleship was still a big deal that I didn't acquire for months.


Sorry, in what way is it BS? You're talking about your personal wealth as a way of discussion inflation in the Eve economy.


Quote:
I think the pure numbers, and what people mean when they say "inflation" can be quite different.


I think the problem is that a lot of people are working off of a shaky definition of "inflation" - they use it in reference to any rise in price of anything for any reason, which is, obviously, the incorrect use of the word.
Anastasia Aleksandra
Caldari Provisions
Caldari State
#24 - 2013-05-20 15:44:50 UTC
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?

Angelique Duchemin
Team Evil
#25 - 2013-05-20 15:49:51 UTC
Anastasia Aleksandra wrote:
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?



You mean deflation?


The amount of ISK in circulation increases constantly while the number of goods and people remains stable.

The very sun of heaven seemed distorted when viewed through the polarising miasma welling out from this sea-soaked perversion, and twisted menace and suspense lurked leeringly in those crazily elusive angles of carven rock where a second glance shewed concavity after the first shewed convexity.

Anastasia Aleksandra
Caldari Provisions
Caldari State
#26 - 2013-05-20 15:56:39 UTC
Angelique Duchemin wrote:
Anastasia Aleksandra wrote:
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?



You mean deflation?


The amount of ISK in circulation increases constantly while the number of goods and people remains stable.


Yes. Given an infinitely increasing money supply and a constant number of goods and people, what factors in EVE's economy could lead to an unreasonable rate of inflation?
Angelique Duchemin
Team Evil
#27 - 2013-05-20 16:08:15 UTC
Anastasia Aleksandra wrote:
Angelique Duchemin wrote:
Anastasia Aleksandra wrote:
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?



You mean deflation?


The amount of ISK in circulation increases constantly while the number of goods and people remains stable.


Yes. Given an infinitely increasing money supply and a constant number of goods and people, what factors in EVE's economy could lead to an unreasonable rate of inflation?


For example ships built from pure materials that are then insured and when destroyed a huge portion of their value is drawn out of thin air to replace them.

The very sun of heaven seemed distorted when viewed through the polarising miasma welling out from this sea-soaked perversion, and twisted menace and suspense lurked leeringly in those crazily elusive angles of carven rock where a second glance shewed concavity after the first shewed convexity.

Anastasia Aleksandra
Caldari Provisions
Caldari State
#28 - 2013-05-20 16:31:12 UTC  |  Edited by: Anastasia Aleksandra
Angelique Duchemin wrote:
Anastasia Aleksandra wrote:
Angelique Duchemin wrote:
Anastasia Aleksandra wrote:
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?



You mean deflation?


The amount of ISK in circulation increases constantly while the number of goods and people remains stable.


Yes. Given an infinitely increasing money supply and a constant number of goods and people, what factors in EVE's economy could lead to an unreasonable rate of inflation?


For example ships built from pure materials that are then insured and when destroyed a huge portion of their value is drawn out of thin air to replace them.


Maybe. That's a good example of insurance fraud but I don't see how that would unreasonably drive up the average market price of goods.

For the average market price of goods to increase, a seller must make a conscious decision to increase the price at which their goods are sold. If CCP were to gift every user $100,000,000 ISK but no sellers increased their prices, there would be no affect to the average market price of goods. Also, given the hypothetical situation above, if a single seller did increase their prices, they would have be a seller who was able to influence the market to meet their prices - other sellers could always undercut and drive the average market price of goods right back down.

The only thing that I can think of that would result in unreasonable inflation would be a radical decrease in the supply of a critical good.
Angelique Duchemin
Team Evil
#29 - 2013-05-20 16:37:09 UTC
When people have more to spend they spend more. Any increase in ISK will effect the prices as a whole unless someone just sits on the ISK.

The very sun of heaven seemed distorted when viewed through the polarising miasma welling out from this sea-soaked perversion, and twisted menace and suspense lurked leeringly in those crazily elusive angles of carven rock where a second glance shewed concavity after the first shewed convexity.

Vincent Athena
Photosynth
#30 - 2013-05-20 17:32:58 UTC  |  Edited by: Vincent Athena
Sola Mercury wrote:
Tatminator wrote:
[quote=mynnna]

Bounties are a bit of neither if I know mechanics right. If i'm correct bounties are paid for by players so it's really only change of hands rather than increase or decrease in pool.


She/he speaks about bountys players collect by killing red crosses.

I think the most anti-inflationary effect comes from massive ISK piles sitting unused in old players wallets.

CCP's economics people have said many times that its not the total ISK in the game that drives inflation, but the velocity of money. That is how fast people spend it. So yes, large quantities of ISK sitting doing nothing do control inflation.

Based on the plot linked near the top of this thread, we have actually had on average deflation over the lifetime of the game.

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Adunh Slavy
#31 - 2013-05-20 18:05:00 UTC  |  Edited by: Adunh Slavy
Anastasia Aleksandra wrote:
I don't have much of an education in economics but...is it even possible for inflation to be a risk at all?

  • Are there any risks to ISK becoming a secondary or less-preferred currency? To what?
  • Also, is there a finite amount of ISK in the game? If not, there's no real risk of monetary inflation since the quantity of currency in the game would never decrease.
  • There's no central bank in the game to buy-back ISK, is there?



No - Simply because the market interface prices everything in ISK. ISK can be transported any where instantly and to anyone with complete security and atomicly.

No - ISK is functionally unlimited, but its production is quite unlike real world fiat currency. There is no chance of a systemic hyperbolic event. CCP would have to shut down production of all raw materials to see anything resembling hyper inflation in Eve.

Sort of - CCP could start purchasing ISK if they wanted to and soak it up with anything they wanted. ISK sinks are the most likely vector of soaking up excess ISK from the system. The so called Tobin-Tax, as it relates to Dust, is the most visible sort of sink that performs as a monetary valve at this time. Its its function, however, is not to soak up ISK from Eve, so much as slow the flow to Dust and upset the pricing assumptions made by devs.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt
Anastasia Aleksandra
Caldari Provisions
Caldari State
#32 - 2013-05-20 19:52:41 UTC
Vincent Athena wrote:
Sola Mercury wrote:
Tatminator wrote:
[quote=mynnna]

Bounties are a bit of neither if I know mechanics right. If i'm correct bounties are paid for by players so it's really only change of hands rather than increase or decrease in pool.


She/he speaks about bountys players collect by killing red crosses.

I think the most anti-inflationary effect comes from massive ISK piles sitting unused in old players wallets.

CCP's economics people have said many times that its not the total ISK in the game that drives inflation, but the velocity of money. That is how fast people spend it. So yes, large quantities of ISK sitting doing nothing do control inflation.

Based on the plot linked near the top of this thread, we have actually had on average deflation over the lifetime of the game.


In EVE, the quantity of money is always increasing but the creation of goods is a function of the number of capsuleers actively converting resources to goods and services. If an increase in the velocity of money could be the result of either an increase in the quantity of money or an increase in the consumer price index, wouldn't that make the rate at which resources are converted to goods and services the anti-inflationary effect?
Angelique Duchemin
Team Evil
#33 - 2013-05-20 19:56:43 UTC
I believe the rate at which we buy ships. Get them blown up and buy new ones remain in balance. That's the demand that drives the construction of new ships and the prices of raw materials too. But the amount of ISK just increases.

The very sun of heaven seemed distorted when viewed through the polarising miasma welling out from this sea-soaked perversion, and twisted menace and suspense lurked leeringly in those crazily elusive angles of carven rock where a second glance shewed concavity after the first shewed convexity.

Kara Books
Deal with IT.
#34 - 2013-05-21 00:11:02 UTC
Sabriz Adoudel wrote:
The PLEX/ISK exchange rate is IMO a measure of inflation.


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Adunh Slavy
#35 - 2013-05-21 12:50:21 UTC
Something that came across my path this morning, some of you may care to read it. Talks about the hyperinflation in Diablo.

http://mises.org/daily/6435/A-Virtual-Weimar-Hyperinflation-in-a-Video-Game-World

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt
Angelique Duchemin
Team Evil
#36 - 2013-05-21 20:41:09 UTC
Kara Books wrote:
Sabriz Adoudel wrote:
The PLEX/ISK exchange rate is IMO a measure of inflation.


Bingo Ding Ding Ding Ding!


That's not a good estimate either. Whenever plex prices start going up; there's a sale all of a sudden.


There's nothing natural about plex prices. Not in the least. CCP needs the plex prices to reman stable. High or low is bad for them.

The very sun of heaven seemed distorted when viewed through the polarising miasma welling out from this sea-soaked perversion, and twisted menace and suspense lurked leeringly in those crazily elusive angles of carven rock where a second glance shewed concavity after the first shewed convexity.

Chihiro Chugakusei
Fortune Hunters - Navy Operations
#37 - 2013-06-01 03:08:38 UTC  |  Edited by: Chihiro Chugakusei
My battleship has gone up 10% in price in the last week. Most ships are going up too and have been going up for some time. When I logged on for the first time in 2 years, a few weeks ago, everything had gone up in price by 500-800% since the last time that I had played.

Keep it up, +1
mynnna
State War Academy
Caldari State
#38 - 2013-06-01 04:37:43 UTC  |  Edited by: mynnna
Chihiro Chugakusei wrote:
My battleship has gone up 10% in price in the last week. Most ships are going up too and have been going up for some time. When I logged on for the first time in 2 years, a few weeks ago, everything had gone up in price by 500-800% since the last time that I had played.

Battleships have gone up in price in the last few weeks because minerals are going up, and that's because battleship mineral requirements are going up in odyssey, which means people are building vast quantities of them.


And I honestly doubt "everything" has gone up 500-800% in the past two years. In fact, I know for a fact that that isn't true. Now, minerals and thus most tech 1 goods are more expensive than you'd remember from two years ago, but that's because CCP removed drone alloys, which were an enormous source of minerals in the game. Reduced supply resulted in higher prices. But not THAT much higher.


Neither factor has anything to do with inflation as being discussed in this thread.

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