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442,329 by controlling interest to keep inflation as close to 1.5% as I could (which isn’t always easy). 442,306 by just immediately setting interest at -0.5%

442,329 by controlling interest to keep inflation as close to 1.5% as I could (which isn’t always easy). 442,306 by just immediately setting interest at -0.5% and leaving it there entire time. Inflation varied widely, but seemed to correct itself around 12% and -4% and spent a lot of time near 0%. Can anyone explain an economic theory why that happened, or is the game not reflective of reality?

user3939382 4y ago
Didn't Japan have negative interest rates?
- tapland 4y ago
  A lot of places did in recent years
  - jnordwick 4y ago
    Nobody has had negative interest rates without policy prescriptions that may show up as a negative rate, but on balance sheets do have costs. 1. There have been negative yields for short periods of time, but a yield isn't the same thing. Yields can go negative for technical reasons related to trading, but the if you look at rates on fresh bond offerings, they'll still be slightly positive. 2. There can be government laws that require lending, penalties and reserve requirments, etc that all change the cost to carry. So while the interest rates shows up as negative, after adding in these other items the adjusted rate is still positive. For example, German mortgages went negative a few years back, but it a requirements for some banks to original home loans to increase ownerhsip and the penalties would have larger the the rate charge, so they loaned out at -0.5% instead of taking a 1% hit (can't remember the exact numbers). I don't know anywhere that there has actually been negative interest rates without some other sort of interventions pushing towards them.
- sschueller 4y ago
  Switzerland had -0.75 until last week when they went to -0.25.
BenoitEssiambre 4y ago
In the blog post (https://benoitessiambre.com/simcb.html https://benoitessiambre.com/simcb.html) I explain why it's difficult to get inflation to rise very much under normal circumstances. I think it's mostly because I don't have a government doing deficit spending. You can reach higher scores (through lower menu costs) if you try to maintain lower inflation (like 1% or lower), however keeping it too low can make it harder to keep stable and you will be penalized through menu costs if it destabilizes.
- jsjohnst 4y ago
  > penalized through menu costs if it destabilizes Yeah, some of my more aggressive tries had this happen and got lower scores. What’s the highest you’ve seen? And thank you for building this!!!
  - BenoitEssiambre 4y ago
    My current high score is 446834. This was not trying too hard, just playing a handful of times. I do have the unfair advantage of being intimately familiar with the economic model.
jsjohnst 4y ago
443,276… this one the strategy makes sense too… stay at 2% until 115 month and drop to 0.5% by 120, when the production drops 12%. Stay at 0.5% until 175 and crank interest to 1.0% by 180, when people spend 10% less. Stay at 1% rest of the game… Edit: New highest known score… 443,385, basically same strategy. 2.25% at beginning, down to 0% during drought, up to 1% when buyers spend less, then jiggle your way till end.
imtringued 4y ago
The negative interest rate works because your orchards don't go bust which in turn means there are enough apples for everyone putting downward pressure on prices.
yobbo 4y ago
The game has no relation to reality, but also remember that economic theory is only a rough description of what "seemed to make sense" at some point.

user3939382 4y ago

Didn't Japan have negative interest rates?

tapland 4y ago
A lot of places did in recent years
- jnordwick 4y ago
  Nobody has had negative interest rates without policy prescriptions that may show up as a negative rate, but on balance sheets do have costs. 1. There have been negative yields for short periods of time, but a yield isn't the same thing. Yields can go negative for technical reasons related to trading, but the if you look at rates on fresh bond offerings, they'll still be slightly positive. 2. There can be government laws that require lending, penalties and reserve requirments, etc that all change the cost to carry. So while the interest rates shows up as negative, after adding in these other items the adjusted rate is still positive. For example, German mortgages went negative a few years back, but it a requirements for some banks to original home loans to increase ownerhsip and the penalties would have larger the the rate charge, so they loaned out at -0.5% instead of taking a 1% hit (can't remember the exact numbers). I don't know anywhere that there has actually been negative interest rates without some other sort of interventions pushing towards them.
sschueller 4y ago
Switzerland had -0.75 until last week when they went to -0.25.

BenoitEssiambre 4y ago

In the blog post (https://benoitessiambre.com/simcb.html https://benoitessiambre.com/simcb.html) I explain why it's difficult to get inflation to rise very much under normal circumstances. I think it's mostly because I don't have a government doing deficit spending. You can reach higher scores (through lower menu costs) if you try to maintain lower inflation (like 1% or lower), however keeping it too low can make it harder to keep stable and you will be penalized through menu costs if it destabilizes.

jsjohnst 4y ago
> penalized through menu costs if it destabilizes Yeah, some of my more aggressive tries had this happen and got lower scores. What’s the highest you’ve seen? And thank you for building this!!!
- BenoitEssiambre 4y ago
  My current high score is 446834. This was not trying too hard, just playing a handful of times. I do have the unfair advantage of being intimately familiar with the economic model.

jsjohnst 4y ago

443,276… this one the strategy makes sense too… stay at 2% until 115 month and drop to 0.5% by 120, when the production drops 12%. Stay at 0.5% until 175 and crank interest to 1.0% by 180, when people spend 10% less. Stay at 1% rest of the game… Edit: New highest known score… 443,385, basically same strategy. 2.25% at beginning, down to 0% during drought, up to 1% when buyers spend less, then jiggle your way till end.

imtringued 4y ago

The negative interest rate works because your orchards don't go bust which in turn means there are enough apples for everyone putting downward pressure on prices.

yobbo 4y ago

The game has no relation to reality, but also remember that economic theory is only a rough description of what "seemed to make sense" at some point.