a stab at economies

[Ishmael]

The talk of ecomonics has spurred me on to try my hand at making
something up using supply and demand as the main driving points. I figure that
supply/demand can give strong clues as to trade and trade routes. It can also
be used to figure prices; as demand goes up, so do prices and as supply goes
down, so do prices. A price/cost multiplier of demand/supply for ordinary costs
seems appropriate. Standard prices exist when supply=demand.
The problem then becomes how to determine supply and demand.
_______________________________________________________________________________
Relating to pc trade, each sector will get its own MT style trade table to
determine product being shipped and amount based on import and export volume of the
world.
_______________________________________________________________________________
Here's the text so far. I figure it'd be better to link to it so tables aren't mangled, etc.

http://moukotiger.googlepages.com/traveller

I know, more complex than is good for play, but I figure a spreadsheet could do
the drugery work, and its mostly all set-up for background so far.
_______________________________________________________________________________

http://moukotiger.googlepages.com/home

 

[Hemdian]

Interesting. But I'd like to question your first assumption: 1 unit of population demands 1 unit of goods. Looking at our world it appears that as a country modernises, its population becomes richer, and their per capita consumption increases. That's so for food (increase in meat in diet), consumer goods, and energy use (domestic use increases directly, industrial use increases as a byproduct of increased consumer goods demand).

In other words ...

Baseline Demand = Population x Consumption

... where Consumption is proportional or corelates to TL.

Baseline Supply would be similar ...

Baseline Supply = Population x Productivity

... where Productivity is proportional or corelates to TL.

It is where these vary that you get surpluses and deficits, and it is these that are traded.

 

[rust]

Looking at our world it appears that as a country modernises, its population becomes richer, and their per capita consumption increases.

Not necessarily, it only happens if the per capita income indeed increases (or,
more precisely, the "buying power" of the per capita income), which is not al-
ways the case.
In our real world we have seen quite a few cases where countries modernized,
but the rapid population growth still reduced the per capita income and per
capita consumption.

 

[robject]

About ten years ago, I started estimating traffic by pairing up worlds, if that helps.

 

[rust]

About ten years ago, I started estimating traffic by pairing up worlds, if that helps.

It would be very interesting to read more about it.

 

[rust]

I'm certain no economist...so there is no guarantee that this will be any good.

I have no doubt that it will be much better than what we have now.


Edit.: Ah, finally a proof of the Precognition ability - I quoted Ishmael long before he
had made his posting !

 

[Ishmael]

Interesting. But I'd like to question your first assumption: 1 unit of population demands 1 unit of goods. Looking at our world it appears that as a country modernises, its population becomes richer, and their per capita consumption increases. That's so for food (increase in meat in diet), consumer goods, and energy use (domestic use increases directly, industrial use increases as a byproduct of increased consumer goods demand).

As tech increases, the amount of goods produced per labor increases ( supply goes up..price drops for an unchanged demand ).
As the population becomes richer, they may purchase more than 1 unit, and increase their standard of living ( happier pop and possibly more productive pop ).

Consumption is based on consumer's purchasing power, not tech
Production does correspond to tech, but I account for that with the exchange rate table.
24,000cr(local) production at tech15 starport A is worth 24,000CrImps
24,000cr(local) production at tech 8 starport D is worth 3,600CrImps.
Whats interesting is that a high pop, low tech world can outproduce a lo-pop high tech world ( value of output ) and flood the market with goods.

The 1 unit of pop demands 1 unit of goods assumes supply=demand; a good starting point. The variable 'demand' modifier simulates the fickle consumer and afterward, demand/supply will drive the purchase price of the 1 unit of goods. As populations and output begin to vary, output will begin to be influenced by 'standard of living', which is based on whether the populations demand is met.

I'm still working on it and my post is a work in progress open for critique. Some of it may change. I'm making a spreadsheet for it now ( to track buying power and standard of living stuff....this economy system will have to be run with a spreadsheet I'm afraid).

btw..I'm certain no economist...so there is no guarantee that this will be any good.

 

[sid6.7]

i don't know if this is what you want but they are a very good read...

http://www.io.com/~sjohn/2space.htm

and

http://www.io.com/~sjohn/demog.htm

 

[Icosahedron]

i don't know if this is what you want but they are a very good read...

http://www.io.com/~sjohn/2space.htm

and

http://www.io.com/~sjohn/demog.htm

Oo, those are interesting. <squirrelled away for future perusal and use>.
Cheers.

 

[Chaos]

Not necessarily, it only happens if the per capita income indeed increases (or,
more precisely, the "buying power" of the per capita income), which is not al-
ways the case.
In our real world we have seen quite a few cases where countries modernized,
but the rapid population growth still reduced the per capita income and per
capita consumption.

Indeed. In macroeconomic growth theory, the thing that matters is always the growth rate of capital minus the growth rate of population.

Also, technological advances increase productivity per worker, but these more advanced production techniques are usually more capital-intensive. For example, you can grow more food with modern farming equipment than just with your bare hands, but modern farming equipment also costs an awful lot of money. Remember the old saying "it takes money to make money"?

 

[Daneel Olivaw]

... as supply goes
down, so do prices.

You should be congratulated for helping to improve what has been a necessarily vague abstraction of the economic flow between worlds.

If I may, supply and price are inversely related - as supply decreases, price increases, because a good's relative scarcity increases its value and, therefore, the price consumers are willing to pay for it.

Just some info which I hope is helpful in your endeavour.

 

[Ishmael]

yeah, I know...I mistyped it and didn't catch the error before I hit 'send'.
I also suggested that demand/supply could be a multiplier for a standard price ( one where supply=demand ).

Its already in a spreadsheet I'm working on.
I've gotten a bit carried away and have to scale it back to focus on the main issue I'm trying to solve...trade volumes for imports and exports. I'm guessing a small percentage of it will be pc trade except on tiny low-pop worlds.
Still working on it...I'll post what I have in a couple of days just so people can see progress.

 

[jatay3]

What about differing commodities? Wine producers can produce higher value for the same population then producers of groat fodder because of higher demand.
A district that produces Lambic Reds will have a different economy then one that produces Milligan's Mudwater.

 

[Ishmael]

I'm only splitting things down to the following as opposed to the numerous ( innumerable? ) types of commodities. I'm only after shipping volumes and basic types. I think this is already complex enough, or too much, considering its for getting an idea of pc level trade goods.

Perhaps groat fodder is cheaper because of huge supply, and not from low demand. Whereas the wine might be expensive, not from great demand, but because of limited supply.

Agriculture
Manufacturing
Resources
Military
Other ( service industries/unemployed )
_________________________________________________________________

I've done the tax stuff and figured import/export volumes ( in number of 'units' shipped in/out ). I need to go back and redo the -demand- numbers to take military procurements into consideration ( I forgot..duh! ). It shouldn't change things much.

Its turned into something of a world econo-sim with ref making decisions about tax rates and some government spending. Labor overall purchasing power after buying food/goods/resources (like gas, etc.) will have an affect on a populations happiness and approval of their government.

The actually trade portion for pc's will end up being a second page on my sheet. It's part of a bigger worldbuilding sheet I'm making for myself, so other's milage may vary, but its easy enough to modify.

http://moukotiger.googlepages.com/worldbuilder.ods

 

[rust]

Whow, that really looks very, very interesting and potentially useful !

Unfortunately I am not a "spreadsheet wizard", and it will take me some time
to fully understand it ...

 

[jatay3]

Actually with wine, the demand comes partly from the lack of supply. To a limited extent with luxery items price can become a "perpetual motion machine"-that is people buy it to show how much they can buy. Obviously that is limited otherwise the price of wine would be infinite and you could get rich by selling one bottle. But that factor exists.

 

[Lapthorn]

...

In other words ...

Baseline Demand = Population x Consumption

... where Consumption is proportional or corelates to TL.

Baseline Supply would be similar ...

Baseline Supply = Population x Productivity

... where Productivity is proportional or corelates to TL.

It is where these vary that you get surpluses and deficits, and it is these that are traded.

Thanks chaps, this is very interesting.

Another factor that will influence demand is the availability of finance. IRL, if you look at economies in eastern Europe, many are running whacking great trade deficits (e.g. Bulgaria's is above 25% of GDP). Businesses are borrowing to invest and consumers to consume, because everyone expects incomes to rise as these economies converge with rich western Europe. Rich-country banks have gone into these places and are growing lending by 60% or 70% a year, providing the finance.

Let's put a Traveller spin on it - the Bank of Sylea goes into newly-contacted T4 or T5 world and makes loans to the government to buy shiny new weapons. ("Oh, you don't want them, Mr President? No problem. But those other guys the Imperium helped you to overthrow last year were interested... Ah, we have a deal.") The disparity in incomes between T4-World and Sylea is such that the government is faced with huge debt service costs relative to the size of the local economy. They need to start growing their economy, or rather allowing Sylean firms to develop it for them without interference. That, or have a visit from the Imperial Marines when the first debt payment is missed...

Gives you a nice dynamic for imperialism in a Traveller setting.

Also, although I haven't crunched the numbers for this properly, gives you a rationale for the free trader. Demand on a T4 or T5 world is so low that the megacorps won't find it worth their while to run their freighters to those worlds, particularly gives comms lags; but there will be some demand for the odd offworld trinket that a bottom-feeding free trader could meet...


Marchand

 

[Ishmael]

I've updated my spreadsheet for people to look at. I've made it into an Excel file for those who don't use OpenOffice. I may simplify it some later, I dunno.

Its part of a larger sheet that I'm working on for general world-building.

http://moukotiger.googlepages.com/worldbuilder.xls

______________________________________________________________________________________________________

http://moukotiger.googlepages.com/traveller

 

[redwalker]

The talk of ecomonics has spurred me on to try my hand at making
something up using supply and demand as the main driving points. I figure that
supply/demand can give strong clues as to trade and trade routes. It can also
be used to figure prices; as demand goes up, so do prices and as supply goes
down, so do prices. A price/cost multiplier of demand/supply for ordinary costs
seems appropriate. Standard prices exist when supply=demand.
The problem then becomes how to determine supply and demand.
_______________________________________________________________________________
Relating to pc trade, each sector will get its own MT style trade table to
determine product being shipped and amount based on import and export volume of the
world.
_______________________________________________________________________________
Here's the text so far. I figure it'd be better to link to it so tables aren't mangled, etc.

http://moukotiger.googlepages.com/traveller

I know, more complex than is good for play, but I figure a spreadsheet could do
the drugery work, and its mostly all set-up for background so far.
_______________________________________________________________________________

http://moukotiger.googlepages.com/home

Thanks for the creative input.

What was the theoretical basis? Did you have a big textbook of input-output analysis handy or did you wing it from intuition?

 

[Ishmael]

I made it up from intuition mostly.
I know rare things are most expensive than common things.
I know things people want badly cost more than things people don't care about.
Other than that, I just took things from the economy stuff in Striker and taxation stuff from Pocket Empires. Then I fit it together as best as I could.
I haven't settled on a model for shipping costs, tho.

Has anyone took a look at the sheet yet?
Some feedback on what's right and what's wrong would be nice.