NEGATIVE INFLATION

[9610rick]

Is having negative inflation and negative interest rate bad???

[gardinershow700]

Negative interest rates are bad because then it means the banks are making no money and can't finance there operations. And negative inflation is bad because then it means the economy is not moving and is in a downturn.

[[N13] M.I.A.]

Originally posted by 9610rick:

Is having negative inflation and negative interest rate bad???

Negative inflation is a good thing for state and population because value of currency (sometimes tied with exchange rate towards other currencies) is on the rise thus state makes less profit, but at the same time needs to spend even less on funding while achieving same results, but has negative influence on businesses since they have to cut their spending and to fire or cut employees' salaries or shut down. The opposite apllies for "positive" inflation. I don't recommend going less than -1% and more than 3% inflation in a fully privatised economy.
In a fully state-controlled economy (like if you finish by nationalising services segment in North Korea), even having -50% deflation won't matter and only does good (game-wise, but didn't test for prolonged periods like a couple of decades) if you keep improving production so your GDP has moderate increase or at least stays same, but higher inflation (more than 4-5%) will hurt you much.

Negative interest rate means private/semi-prtivate banks can hold deposits, but charge depositors for keeping money as well as state has to subsidise banks so they give out more loans to people and businesses. Having to have too low or negative interest rate means the economy has reached effective capacity and growth is moving towards recession thus state has to subsidise loans and penalise savings to revitalise the economy.

[giray_hereke_]

Even though I have 5 percent inflation, is the budget surplus 150 bs that good or bad?

[[N13] M.I.A.]

Originally posted by giray_hereke_:

Even though I have 5 percent inflation, is the budget surplus 150 bs that good or bad?

Surplus message means that you have accumulated this sum to your treasury which will either be used automatically to cover public debts (if you have any, except IMF/WB ones afaik) or can be freely used in construction projects or budgeting/nationalisation.

You can have a good surplus even with high inflation. Inflation just means currency's purchasing power value will decline over time so you will have to adjust salaries and social allowances (on top of that inflation already lessens your proficit because your spending will rise with each week/month, depending on longevity and severity of inflation) according to yearly/half-year accumulated inflation or people will suffer because of that.

[giray_hereke_]

wages increase the world trade organization bans me what will it be?

[[N13] M.I.A.]

Originally posted by giray_hereke_:

wages increase the world trade organization bans me what will it be?

You mean you got kicked from WTO for raising minimum wage? I can't tell for sure then, maybe you did too big raise, do it step by step if raise.

[giray_hereke_]

Teachers, police, research and civil servants reached 3000 in the game I play now. What you're doing is pushing unions.