Gabe's Economic Guide

Want to know how to handle your economy in GPS4? Look no further! This guide will cover taxes, trade, debt and everything else you need to know to run your country's economy.

Overview

So, you booted up GPS4, probably loaded a country like the U.S or China and decided to have a go at being the topshot of the world economy... Only to frustrate yourself into giving up after ramming your economy into the ground or simply not understanding how to do anything.

This guide is an updated version of my own GPS4 economic guide on youtube, featuring the newest updates on the game's economy. You can see the video below:

So, let's begin, my friend!

Finance Overview & Growth

Let's start by opening the Finance Overview, shall we?



Here you have the following very important stats:

-The Stock Market



This shows how are your companies profiting over time. If you have a DOW JONES target or any other stock market target for your country, this is important information for your economic policy so write down your results every quarter if you want to.

-Growth Rate for the year



This shows how much your country is growing as a % of GDP over the year.

Please note the "over the year", as it is important: If you start the game with a guaranteed 6% growth, there is no need to rush over to push for export contracts or going on a spending drive to spur growth. Growth accumulates over the year, so take things slowly, even if your economic plan has a growth target through the year that you must meet.

-Imports, Exports & the Trade Balance


Needless to say, this shows how your country is doing on trade.

This information is important if you want to turn your country into a export-focused economy, if you want to re-balance your trade, or any other major decision on trade.

Pro-Tip: always wait until Q3 or Q4 of the year before doing any major trade contracts, or else the inflation will accumulate very quickly over the year.

-MAIN PRODUCTION (% of National Sales)



This shows the greatest industries of your country.

Germany has a big Auto industry, Brazil has agriculture and Japan has big tech. This information is great when doing trade contracts so you can now what to export and import, as well as affect your decisions on your economic policy.

Currency & Inflation

Now, let's go to the Currency Tab.



Here, depending on where you are, you can either have the option to enter the Euro, if you are an E.U country outside the EuroZone, and the interest rates.

The Interest Rate



The Interest Rate is set by your country Central Bank and affects your economy in a variety of ways:
->Bringing the interest rate upwards will make credit more expensive & scarce, slowing down consumption and also it will help deflate bubbles in your economy. Also, it will make govt.bonds more profitable, appreciating your currency.
->Bringing the interest rate Downwards will make credit cheaper & more avaiable, spurring economic growth

So what do I do?
If:
-Your inflation is way above your target (ex: inflation at 4% when your target is 2%)
-You feel like there is a bubble in your economy (usually happens with large trade contracts ingame)
-you want to increase the value of your currency.
Then go ahead and increase the rates.

If:
-your economy is deflating rapidly (ex: -1% inflation)
-growth is painfully slow
-Unemployment is too high
Then go ahead and decrease the rates.

-Joining the Euro

So you want to join the Euro? Great! All you have to do is click the button and wait for the Ministry of Finance/Economy to complete the transition for you for the next week or month. After that is passed, you'll receive a message from the Ministry of Finance saying that the transition is complete and you are now part of the Euro-Zone. Yup, it's that easy.
Unless the E.U thinks your economy isn't strong enough, but it's not like that stopped Greece, y'know? ;)

Be aware now of the following:
-You can not set the interest rates for the Euro
-Interest rates are set at 5% by the ECB in-game

Note: To add some criticism to Eversim: Altought the E.U meetings are a welcome addition to the game, they are very lazily implemented. There is no meeting for the quarter interest rate and the stability pact applies to all countries inside the E.U and not the EuroZone only, which can be confusing.

Note2: I do not have a full grasp on what joining the E.U might do to your country in-game, but if someone knows more than I do, please comment below and i'll gladly add to the guide and give you a mention. Thank you!

Employment & GDP per Capita

Let's go to the Work Tab now.



Right off the bat you have two very imporant informations regarding the state of your economy:
-GDP PER CAPITA
From Investopedia:
"Per capita GDP is a measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country. The per capita GDP is especially useful when comparing one country to another, because it shows the relative performance of the countries."

This, along with the H.D.I, is a good measure of the wealth of your country.
Example: The World Bank classifies a High Income Economy any country with roughly more than 13K USD per Capita.

-Unemployment Rate

The Unemployment rate is a calculation of the % of your population that is currently out of work, either due to study, choice or lack of opportunity. A healthy Unemployment rate is always between 3% and 5%. An extremely low unemployment rate might cause inflation on wages & prices as manpower gets more scarce, which is a sign of an overheating economy.

You can take the following actions to increase unemployment:
-Raise the Minimum Wage
-Increase interest rates (through the Currency Tab, previously mentioned)
-Increase Work Hours

Alternatively, the Work tab also provides with tools to strengthen your country safety net for working families:
-Give grants for young people, handicapped or seniors to go to work
-increase or decrease the unemployment grants and the time the grants are avaiable
-Raise the Minimum Wage
-Increase the Employment Agency budget
-Increase the budget on the fight against child labour
-Increase the budget on the fight against sexual & racial discrimination on the workplace.

Trade Contracts

In GPS4, you can trade with other nations freely by either through the Agriculture/Industry tabs or by right-clicking a country, hovering the mouse over "economy" and choosing "Create new Contract". You will get a screen like the one below:



You can import or export freely as you feel like, but you must pay attention to the following:
-How much your country or the opposite country has avaiable of the product
-Can you produce enough in the Trade Contract time limit?
-Your Sale/Purchase Price and the opposite country sale/purchase price as well.

Trade contracts are ideal to:
-import cheap products to drive down inflation (i.e Food, clothing and Fuel)
-import cheap a much needed raw material for your industry(i.e: Uranium, Oil, Iron, Steel, etc)
-Export excess production for a profit
-Increase Production of a product that does not meet demand.*

*you must be extremely careful when doing so as not to overheat the sector or the economy. If you cannot produce enough, you will hurt your economy when the contracts go bad.

I also recomend not to do any major trade contracts until Q3 or Q4 of the year, as to avoid unecessary inflation adding up from Q1.

Energy

A competent Energy Policy is extremely important to a country. Low energy prices benefit not only the industry but also the consumer. Everyone is happier with a low-cost electric bill.

Check the Energy Tab



The Energy tab provides you with everything you need related to the country's energy infrastructure, economy and legislation.

I highly recomend checking your Energy trade balance by going directly to the Energy screen instead of the information provided below your energy minister.

In order to keep a healthy energy infrastructure, you need to always have a high energy trade balance, the more supply you have, the cheaper energy will become. In order to do so, you'll need to go to construction tab and build more power plants, of any type you want to.

Also, here you can import/export important natural resources such as Oil, Uranium and Coal, as well as set trade tariffs and subsidize important sectors.

-Legislation on Shale Oil & Gas

It is possible to allow or disallow the exploration of shale Oil & Gas in your country in the legislation tab.

Taxation

Taxation can affect your economy in a lot of ways. Each individual tax will affect either a particular class of society or a particular industry. It is important to note that tax changes will affect not only your overall budget but society as a whole.

In this screen you can raise or lower any tax in the revenue screen, create a new tax on the "Create" screen, or pass legislation regarding taxation in your country.

If you want to pass a new budget on parliament or congress, I strongly suggest to edit it as a Reform instead of changing every single tax individually. This has a far more immediate result and has a stronger chance of bipartisan support. In order to create a REFORM you have to click on the drop-down menu below a stack of books and click "New Reform", or choose an existing reform.



Pro-Tips:
-Always pass new budgets every quarter, this will organize you to always improve your economy and increase taxes as your economy grows if needs be.
-Pass your new budgets as reforms instead of passing laws individually

[upsidebear]

I'm playing with Chile in the game of Covid since 2020. So surprisingly unemployment increases dramatically (without covid) and I cannot build public works because the workforce is going to zero. I tried to nationalize the building and public works industry and it doesn't work. Can someone help me?.Thanks in advance

[An Actual Idiot]

@Salma Good point I will look into it

[AlittaalittA]

@Instinct- Do you beat OPEC price ?

[AlittaalittA]

@GreatRedSun - nope, closed organisation

[matthoddy]

I like playing as my home country south Africa but I still don't under stand the economy and how to deal with budgeting and other economic tabs any tips on how to start the economy out when starting a game as south Africa?

[TheRevelo]

added you cause of a question

[The Abnormal Stoic]

is there any way to join the g20?

[somedude2019]

Thanks for this. Really helps.

[An Actual Idiot]

How do you boost production, oil for example you introduce shale oil and drill some wells and my oil in my trade window doesnt increase

[gardinershow700]

What's the deal with the Employment Agency and budgeted "tools" to cut employment discrimination and increase equality. I those budget toggles allow you to play as a socialist as to increase regulation and hire more government workers.