Monthly Economic Report - 2023 05

Here it is, our third monthly economic report. Sorry for being late with it, I just came back from a vacation :slight_smile:

Last reports:


I wanted to investigate inflation, since it often comes up in discussion, but is rarely substantiated beyond “XXX is YYY more expansive than in ye olden days!1!”. You could track the price of a basket of goods, but that seems prone to supply fluctuations. Instead since the report provides full insight into money and resources created, here’s another angle. Disclaimer: I have no idea about economy, I’m pulling this all out of my butt.

I’ll take inflation for this post to mean “there’s more money produced than corresponding goods in a given time frame”. If the whole economy prints $100 in a week, but only produces $10 of additional value, prices have to increase long-term and vice-versa. To make this comparison we need to assign a value to produced resources. I’ll use the unit averaged price of the resource across all CXs, neglecting currency conversions. Thanks to lowstrife this introduces errors less < 2%, and we have no chance of getting this accurate anyway. The other issue is that resource extractors (REs) spend consumables, shipping and repair costs and therefore the value added to the economy by REs is not immediatly the price of the resources but after subtracting those costs. I have no reliable intuition or data for this margin across all RE industries, but from toying with prunplanner a bit, I’ll assume something between 50% and 75% is profit for REs. So with all this in mind, we can make a simple balance: if the sum of all money supply changes is more or less than the sum of (margin * days * mean production * avg trade price) over all extracted resources, we’ll have inflation or deflation.

The sheet that holds the corresponding data from molp’s report and calculates the average price is here:

The verdict strongly depends on what you put in for the RE margin, from 2% inflation at 50% margin to -2% deflation at 75% margin. What I take away from this mostly is that there is definitely not a run-away inflation happening.

I am not sure, if the assumption to only look at RE is valid in general. After all other industries also value to their respective products, which can counteract inflation. If that’s the case, it’ll be hard to quantify but surely we’d be in deep deflation territory and it would be worthwhile to rethink the periodic calls for more money sinks that sometimes pop up in chat.

A few more unrelated things I’ve noticed while making the sheet:

  1. CX trade (disregarding double counting due to resellers) seems in the range of 10% (H2O) to 50% (O) of the extracted resources.
  2. CX trade increases steadily since last year (when I started to collect data). So CX is for sure not dying as is sometimes put out. It’s unclear whether the increase is from new players or more products hitting CX, since we do not have production stats that far back.
  3. H2O trading doubled within 1-2 months between last december and january quite abruptly. The price stayed (roughly) constant throughout though, so it seems a big producer shifted from corp production to CX selling. Also water riggers add on the order of half a billion NCC to the economy every month, the highest among all REs.
    (Use the plot sub sheet to check out trends for other goods)

I’ll try to add the past and coming months, but it sort of depends on motivation. :'D

EDIT: I just noticed that I forgot to include mineral production in the linked sheet. I guess then with the current calculation it would give strong deflation. Not sure if there’s anything that could balance that.

EDIT2: Fixed and also included the last month.