No, I’m saying if you are going to point to the real world example of a rapidly rising money supply and inflation then complain that RL doesn’t map over to the game you are being an incoherent fool. You reference RL when it suits you…but you reject it when it suits you.
And again…who controls the money supply in game? Here is a hint, it isn’t CCP.
Im not complaining about inflation though.
I wasn’t commenting on the current situation. I was just stating that ISK gets more purchasing power it might make the professions that generate ISK more attractive.
Please don’t qoute me out of context and then attack something I didn’t say. With this I was referring to the fact that there are ISK sources and “jobs” provided by the NPCs of this game that are always available at an infinite supply and at the same rate and not dependent on the player economy (the availability of it!!).
Yes, it is down because it was probably extremely farmed with bots and do to the almost perfect safetly that local gave the ratters there. But this is no big deal in my opinion.
Again, the reason people are jumpy about inflation in video games is because it can destroy the currency which leaves the game in a strange distorted state if people switch to items as a currency replacement.
On the other hand if we have deflation, we have an infinite supply of jobs and ISK generation methods that become more attractive the more value ISK has. And at the bottom line there is probably insurance fraud where you can directly convert minerals to ISK.
In summary: no one cares about deflation because it is no problem in a video game but if there is inflation that may become one. This is not the real world.
Dude, what’s up with you? Calm down a little. People try to have an actual discussion with you but instead of addressing what was said you just go full crazy and make no sense anymore.
Look, you are clearly smarter than I am when it comes to economics (I have no freakin clue about it). But even I can see when someone compares two things that just don’t map. One of your main statements was:
The reason why the economy collapses are just not given in EVE. It is like we have a completely separate NPC economy that is not influenced by the player economy at all and has an infinite supply of jobs at the same rate. Deflation is NO concern because of this in EVE.
Sure. If that is the only effect. But ISK usually gets more purchasing power for a reason…and that reason is usually a shrinking of the money supply. If it is shrinking for “normal/natural” reasons then yeah, your overall observations are largely correct. The purchasing power of ISK goes up, people are drawn into ratting more and things return to “normal”. But if there is an exogenous shock–i.e. CCP does “something” then it can have a system wide effect that shifts us to a completely new regime. Suppose CCP make ratting in super capitals even more efficient. We’d see a sudden surge in the money supply and inflation would be a problem. Suppose CCP made it impossible for super capitals to warp into an anomaly. We’d likely see a sudden drop in the money supply and deflation would be a problem. In economics we call this sort of thing a “unit root” problem.
No, not an infinite supply. At any given moment there is a finite number of rats. And there is only so much time in a day. There is an upper limit.
And the “jobs” of ratting are only taken by players who see a benefit in doing so, that is the issue with the blackout. Players saw those “jobs” as providing insufficient benefit for the cost so they stopped.
Banning bots had an effect to be sure. But ratting income from August 2018 to August 2019 was down about 72-73%. Ratting income in August 2018 was ~57 trillion ISK. In August 2019 it was ~16 trillion ISK. I seriously doubt that is all botting.
Totally agree.
And this happens IRL too. Which is why I find the “this is a video game not RL so economics doesn’t apply.” It applies for inflation…why wouldn’t it apply for deflation?
Okay, I’ve shown the infinite is not quite accurate. Just say “lots” or something. And the money supply will shrink if players do not think ratting is providing enough benefit. It is a case of individual rational behavior but in aggregate it is “irrational” (not really as rationality is an individual concept that really doesn’t map over to groups, especially large ones).
We have never had deflation in the game, but there is plenty of reason to suspect it might be a problem. If deflation becomes large enough I don’t have to rat to increase my purchasing power…I just wait and the purchasing power of my ISK goes up.
It is the exact opposite of hyperinflation. There people want to spend their money quickly before it loses value. With sufficiently bad deflation people don’t want to spend their ISK.
We don’t have an NPC economy really anymore. There was a tiny one back in the day. And early on there were lots of NPC buy orders. But now the economy is entirely player driven. Even the money supply is via the players.
You keep saying there are an infinite number of jobs…but there isn’t. There are only those jobs that players decide to take. If they decide that one of those jobs, ratting, is no longer worth the time then the money supply will start to shrink.
Think of it this way, there are ISK sources and sinks. If the sources slow down too much the sinks dominate and the money supply shrinks. Now, if that happens because say, some players get sick of ratting and move on to something else then the money supply shrinks…purchasing power goes up and ratting looks more attractive. Then your observation that ratting will increase is most likely true. In fact, this is exactly what would happen when we had commodity backed money supplies (e.g. gold, silver or sometimes both–bimetallism). Suppose a couple of mines played out. Now there is less gold. As the real economy keeps chugging along the money supply shrinks in relative terms. This makes gold more valuable. This increases the incentive to go out and look for new mines/veins of gold (or silver or both). When a big mine is found the money supply grows. It might even lead to inflation if it is a particularly productive mine. And that in turn could make some of the less productive existing mines shut down. It was a surprisingly well balanced system that worked reasonably well.
But here players have docked up their ratting ships en masse as a result of the blackout. To get players back out there ratting the money supply will have to shrink quite a bit. It is what is typically called an exogenous shock. It affects all (or quite a few) players and has a system wide effect. Using the gold standard story from above, imagine if someone discovered gold was causing cancer. It would have a rather bad effect on the economy until things were sorted out and everyone moved over to silver or the like.
Fortunately CCP has ended the blackout and the money supply will likely start growing again, hopefully. Of course, one possibility is that since players may very well have been looking at adaptations to blackout and cyno changes…if those changes lead to even better ratting techniques…well we could actually see a problem with inflation with the return of local. These things are often unpredictable and have all sorts of nonlinear relationships.
Insurance fraud is linked to the price of minerals.
If there is deflation, there is a delayed reduction in price of minerals.
But yes, nobody cares about deflation in this game. It just means that there was a modification of the generation of isk or its usage.
To be smart is to know one’s limit, accept them, and act according to them. The idiot think he has none.
Not over time. infinite time → infinite money. The limit is only your time.
Also yes there is literally an infinite supply of rats, through missions.
That’s assuming you can afford to wait. And believe deflation will keep on going infinitely. Basically it’s the same as for inflation, you are making a gamble. And people losing money because of gamble is no concern for the game -.-
He does not say we do. He says “it’s like”. You are completely missing his point, that is, NPC prices are not affected by players actions.
There is. Just because there is no someone filling that job, does not mean there is not a job to be done.
And regarding making ratting in super capitals even more efficient. That actually happened, by accident. CCP made changes to carriers and super carriers and there was a sudden surge in the money supply. CCP saw it and abruptly nerfed fighters (IIRC). There was a massive outcry on the forums. Lots of people were rage posting to the thread announcing the problem and the changes. I was one of the few people pointing to the MERs and the sudden surge in the money supply and that inflation was going to spike if it wasn’t nipped in the bud.
I like to believe that fighters application nerf had something to do with this @Suitonia blog:
https://suitonia.wordpress.com/2018/10/25/how-broken-and-oppressive-is-light-fighter-and-heavy-fighter-application-maths-edition/
Although it did affect ISK farming capabilities as a side-effect, so one can argue that it was CCPs intention to begin with.
Thanks for the calm response 
. I agree with most of what you just wrote. I have some points I would like to address though:
You are obviously right that the actual jobs are limited because they only exist if they are taken. It was meant more from a supply point of view. There is no upper limit on how many lvl 4 missions the game will generate if demand is there and the ISK payout will not get smaller because the NPCs run out of money. It literally scales infinitely as in it is not possible to exhaust the supply of missions.
I didn’t mean an economy with items. What I meant is that they are completely independent and still “give their ISK away” even if the players hold on to it. They always value ISK at the same rate, and are not influenced by the behavior of human players unless CCP changes them.
Well sure, that may look like an issue and maybe it is. I completely agree with you about the mechanisms behind this. But I just don’t see what negative consequences it could have apart from maybe the market slowing down significantly. It would actually be very interesting to see what happens, after all it’s not like people will starve or something because of it.
I mean at some point insurance fraud will probably start to work again as a hard floor on the deflation.
nah you make error as hell - this is not real world. People dont sell time here - people rat because they like ratting and gladly will rat if they dont neet to rival with bots and other inventions like blackouts ect. Sure people who only play exel will lose a lot of isk, but who cares? game ultimately are for gamers not for economists powered by bots.
Sometimes when you stare at a problem too long you start seeing things that aren’t there.
You don’t have to, but those that do would get more purchasing power than those that don’t.
The game wouldn’t deflate to nothingness. And you would not experience a great depression. There is no cost of living in eve, no one’s going to get ‘laid off’ and anyone can get a venture or rookie ship and start mining or missioning. Players would also become more aware of costs/sinks and change their behaviour.
I was quite happy with some deflation, and a blackout is still the way to go IMO, though i knew the amount we experienced was too much too soon and we underestimated how carebeary null-sec was. But we could have tweaked rewards/sinks/faucets rather than doing a full reverse.
Things get cheaper.
There is less money. Less money exists.
People stop eating, drinking, moving, [expletive deleted], [expletive deleted], wearing clothes, smoking crack, etc.
smoking crack or [expletive deleted] a hooker = investing
Loaning money makes more things happen than not loaning money.
Have I misinterpreted anything you’ve said?
No, no they don’t. Deflation means that nominal prices decrease, yes, but nominal prices across the board decrease, as do wages.
And industry becomes less rewarding.
In fact, there will be a race to sell items before they lose value. Which could snowball into a crash.
All the things get cheaper (including the cost of labor).
The utility of things doesn’t change in a deflationary phase. In a deflationary phase, the decreased availability of currency precipitates a general reevaluation of the nominal price of goods and services, but their actual utility is unchanged. I.e. the end consumer of goods and services is actually more likely to consume those goods and services given the increased utility of his money to procure such goods and services. And producers of such goods and services . . . have to eat. In order that they may do this, they continue to produce. And, on the one hand, in deflation, they have reduced nominal earning capacity, but on the other hand, the nominal cost of production has gone down.
The only people hurt by deflation are those who have previously hoarded goods and production capacity, as the nominal worth of their hoard decreases and they have no way to recoup the currency they invested except by selling their hoard for fewer, but more useful dollars than they bought it for. Even this is fine so long as they paid out of pocket, as the deflated unit of currency now represents greater purchasing power, trading their hoard back for fewer units is offfset by the greater real value of those units versus the same quantity prior to the deflation.
The only significant problem is when the hoarders acquired their hoard with borrowed currency. Then, they can’t pay that currency back, because it no longer exists, let alone exists under their control.
Everyone else is fine in a deflationary scenario.
“Cheaper” and “lower nominal prices” are not the same thing; something being priced 2% less than it was a year before doesn’t mean it’s cheaper when your income and/or the cost of other goods you can buy with the same money are also decreasing by a similar proportion. In real terms, the goods are not at all cheaper.
It’s good when goods and services are cheaper because of increases in productivity, i.e. what was seen after the industrial revolution. It’s not good when things are (only nominally) cheaper because of a monetary contraction. The buying power of a unit of currency would increase, encouraging hoarding of money; this is different from what is called “saving” in the Solow model as presented in a typical undergraduate macroeconomics course, where savings are assumed to be invested, increasing the productive capacity of the economy. In a deflationary scenario, hoarded money is simply stuffed in a sock drawer or safe, not invested.
This is errant nonsense and is not at all supported by the data. At all.
Of course there is a “cost of living” replacing ships, modules and ammo, crystals, etc. You are talking nonsense.
I find it amusing. People will appeal to “Real Life” when it comes to inflation but will spew garbage when it comes to deflation.
Other than Salvos and Anderson Geten you are the the next worst poster on the forums.
“wages” in Eve are not subject to inflation or deflation - payments from NPC entities are static, unless you are a miner or industrialist in which case your “wage” is affected by overproduction as well (like we have oversupply of minerelas thanks to moon mining and all the stuff that comes from null keeping prices at all-time low despite inflation).
So in case of deflation and possible price drop that would just mean that your buying potential is actually rising. I’d say it is a positive moment for the game.
But neither are they more expensive.
People would still want money even if that money was worth slightly less tomorrow than today. Nominally, they might be more inclined to hold on to money, but what they are really holding onto is utility. If the utility of money was increasing relative to the utility of all other things, that would be a good reason to favor the acquisition and conservation of money over things whose utility was decreasing relative to money.
So, how does one go about acquiring more and more money in such a scenario?
I’m not an economist, so I’ll simply stick to my perception of things without making grand claims:
I don’t like inflation. If it is good for the economy in the general sense, then I’m happy for “the economy”. For me as an individual, it still sucks. My “wage” consists of lvl4 missioning. Which has been a stable wage for all these years. Old “jobs” like nullsec ratting paid more. So do other jobs like incursions. But I don’t do those atm. With inflation my ability to PLEX decreases.
The only good thing are the increased selling prices for most of my assets. Having spend ISK on stuff, when I earned it, meant that a 5 year break didn’t make me poor overnight. Too bad, most of my stuff also blew up within a week of buying it 
Maybe I should just get back into null and start “krabbing”. I do still have a super logged off somewhere in EVE… With a higher wage, inflation isn’t an issue that much.
TL;DR : If inflation is good for the economy, it can still suck for individuals inside that economy.