Inflation over centuries

[rancke]

I'm not quite sure which forum this post belongs in, but I hope it fits well enough here.

I'm writing a fluff piece about an official job on Regina that dates back to 309. I've figured out how much the office cost the treasury in the Classic Era (in local credits). The question that perplexes me is, how much did it cost back in 309? The same? Less? How much less?

I'm assuming Regina's tech level was 12 back in 309 and that it is 12 now.


Hans

 

[Fritz_Brown]

I would guess that the 3I has re-valued the CrImp every hundred years or so. You can't leave 800 years of inflation unchecked (especially not to a Vilani). The CrImp would appear to be totally a fiat currency. Not sure how it revalues across such a wide expanse (especially with the communication lag), though.

 

[Dragoner]

I would guess that the 3I has re-valued the CrImp every hundred years or so. You can't leave 800 years of inflation unchecked (especially not to a Vilani). The CrImp would appear to be totally a fiat currency. Not sure how it revalues across such a wide expanse (especially with the communication lag), though.

In the US economy, we accept a small rate of inflation to keep the unemployment rate low, the Imperium doesn't need to do this as it has extra space to move people into, and as an impetus, it may use unemployment as a population control to keep people moving away from the more developed economies and out into the colonies.

 

[sabredog]

The CrImp would have to be fiat currency just to keep the valuation level across the various economies of so vast an empire. The only problem with that, though, is that fiat currencies don't usually last long and can cause a lot of problems on the local labor and resources valuation level.

It presents an interesting problem, too, as to what would actually cause inflation in a currency the Imperium revalues every 100 years that doesn't also cause economic failures among the subject worlds that have to follow that revaluation. If the CrImp rests and goes down what downs that do to the rich or industrial worlds? How do the noble and mercantile families and organizations feel about that?

 

[Dragoner]

Even commodity backed currencies usually become a fiat currency in the end, most gold backed currencies were tied to metal on hand and not market speculation (which would be rather insane imo). Though one could pull the example of inflationary/deflationary cycles from history as the way the CrImp stays relatively stable, with local banks just there to print enough in boom times to keep liquidity.

 

[aramis]

Given the interest rates for ship loans (≤1% APR, compounded monthly) and interest needing to exceed inflation, the inflation rate is expected to be mighty slim. I'd say it's probably about 0.1 APR, if that. which gives 10.5% inflation a century. It could be as low as 0.01% APR, which gives 1.01% per century.

 

[Fritz_Brown]

No wonder the megacorps are so aggressive (mercs!) about new business. About the only way to make a profit, it seems.

 

[rancke]

When did the Imperium turn TL13? In 400? If Capital had a TL of 12 in 309, the Imperial credit has increased 43% between then and the Classic Era (from 0.70 of an 1105 CrImp to 1.00 of one). That would be an inflation of 4.56% per century.

However, I'm working in local (planetary) credits. Would that make a difference? As I said, I'm assuming Regina's TL was 12 back then and is 12 now.


Hans

 

[Magnus von Thornwood]

Tl-c?

When did the Imperium turn TL13? In 400? If Capital had a TL of 12 in 309, the Imperial credit has increased 43% between then and the Classic Era (from 0.70 of an 1105 CrImp to 1.00 of one). That would be an inflation of 4.56% per century.

However, I'm working in local (planetary) credits. Would that make a difference? As I said, I'm assuming Regina's TL was 12 back then and is 12 now.


Hans

I am not so sure that the backwaters of the Imperium would be TL-C at 309. In fact given that Regina was originally TL-A in CT I would place Regina's TL at TL-A or even TL-9 in 309.

Have you checked to see if Don's Integrated Timeline gives any information?

 

[HG_B]

The question that perplexes me is, how much did it cost back in 309? The same? Less? How much less?

No way to really guess. It depends on whether or not the Imp. gov allowed monetary inflation to occur as it is totally controllable.

 

[rancke]

I am not so sure that the backwaters of the Imperium would be TL-C at 309. In fact given that Regina was originally TL-A in CT I would place Regina's TL at TL-A or even TL-9 in 309.

Given that Regina's TL was retconned from TL 10 to TL 12, I believe that this is now the correct figure for the Classic Era. However, to head off another round of that old discussion, I carefully expressed it as a personal assumption.

As for Regina's tech level in 309, that really is an assumption, albeit based on canon history. Canon makes Regina the dominant world in the Regina Cluster at the time, and I'm assuming that its success is based on being a trade hub with excellent ship repair facilities available. I see no reason why a colony world can't have retained its original tech level (or dipped and recovered in two centuries), although it would have been rare for one to do so. Regina is one colony world in a hundred that beat the odds.

I actually find it much harder to accept that a powerful subsector capital can still only be TL 12 by the Classic Era. Though it helps a little that its space TL appears to be 13 (capable of building jump-4 ships).

Have you checked to see if Don's Integrated Timeline gives any information?

I'm pretty sure it doesn't.


Hans

 

[Magnus von Thornwood]

Ah the retcon.

Yeah, I wasn't trying reopen the TL retcon, but use it. Personally, I put the TL mess up on old data that slipped by the Scout's fact checking section.

Now, as for the actual TL, the reason I suggested TL-A is that I just don't see Regina, Subsector Capital and all as having that high a TL some 700 years ago. Especially if it is a colony world. Seems sort of improbable that it stay stagnant for so long. But that is just me.

 

[rancke]

Now, as for the actual TL, the reason I suggested TL-A is that I just don't see Regina, Subsector Capital and all as having that high a TL some 700 years ago. Especially if it is a colony world. Seems sort of improbable that it stay stagnant for so long. But that is just me.

Yes, it is sort of improbable that it stays at the same TL for so long. But it's not very much more probable that it takes 700 years to advance from TL10 to TL12. Tech level 12 was reached by the Terran Confederation, two millenia before Regina was colonized. Sylea dipped to TL 9 during the Long night, but recovered to TL12 by -150. There's no reason to believe that the society that colonized Regina wasn't fully TL12. That a colony world takes some time to construct the infrastructure to match its parent society is quite likely. That many of them never do is... possible. But I don't see it as impossible for a few lucky ones to get there.


Hans

 

[McPerth]

One thing we must not forget is that probably many worlds where unemployement might be a true problem (I guess mainly hi pop worlds) will probably have their own currency, even though the ImpCr is accepted, so that they may have their own economic policy (even more than one if balkanized).

As even today, at TL 7-8 we can cash local money in an ATM at nearly any point of the world, regardless in what currency we have our accounts, I don' envision large problems due to this (at least in planets with TL 7+, and in lower ones probably you'll need either barter or cash, probably in local currency).

This may reduce (if not outright offset) most of the problems low inflation might produce, at least for them, as each currency would have its own inflation. ImpCr will be the standard where all currencies are compared to.

 

[Peter Newman]

Given the interest rates for ship loans (≤1% APR, compounded monthly) and interest needing to exceed inflation, the inflation rate is expected to be mighty slim. I'd say it's probably about 0.1 APR, if that. which gives 10.5% inflation a century. It could be as low as 0.01% APR, which gives 1.01% per century.

All we need to do is compare Milieu 0 prices to Milieu 1100 prices

Milieu 1100 [CT the Traveller Book] vs Milieu 0 [Marc Miller's Traveller Core]

Dagger Cr 10 vs Cr 50
Foil Cr 100 vs Cr 675
Body Pistol Cr 500 vs Cr 1500
Shotgun Cr 150 vs Cr 550
Laser Rifle Cr 5,000 [1] vs Cr 6,500
Cloth Armor Cr 250 vs Cr 100
Vacc Suit Cr 10,000 vs Cr 5,000
Battledress Cr 200,000 vs Cr 200,000 (estimated)

Thus we see that while weapon prices have gone down, implying _deflation_ or the greater purchasing power of the CrImp circa 1100 than circa 0, or BOTH; the prices of some other items have gone up (Vacc Suit, Cloth armor), and other items cost the same (Battledress).

Turning to a more general standard of living in Milieu 0 you could live at an 'Ordinary Level' for Cr 400/moth (200 for good food and 200 for good lodging). General living expenses (except ships life support costs) don't seem to be listed in The Traveller Book. Maybe we could use the MT costs?

[1] Rifle Cr 3,500 + 1,500 for the LR Power Pack but in Milieu 1100 the price includes both.

 

[rancke]

Incidentally, I ended up making the stipend 6 crowns per week in 698 and 450 crowns per annum in 1105.


Hans

 

[McPerth]

All we need to do is compare Milieu 0 prices to Milieu 1100 prices

Milieu 1100 [CT the Traveller Book] vs Milieu 0 [Marc Miller's Traveller Core]

Dagger Cr 10 vs Cr 50
Foil Cr 100 vs Cr 675
Body Pistol Cr 500 vs Cr 1500
Shotgun Cr 150 vs Cr 550
Laser Rifle Cr 5,000 [1] vs Cr 6,500
Cloth Armor Cr 250 vs Cr 100
Vacc Suit Cr 10,000 vs Cr 5,000
Battledress Cr 200,000 vs Cr 200,000 (estimated)

Thus we see that while weapon prices have gone down, implying _deflation_ or the greater purchasing power of the CrImp circa 1100 than circa 0, or BOTH; the prices of some other items have gone up (Vacc Suit, Cloth armor), and other items cost the same (Battledress).

Turning to a more general standard of living in Milieu 0 you could live at an 'Ordinary Level' for Cr 400/moth (200 for good food and 200 for good lodging). General living expenses (except ships life support costs) don't seem to be listed in The Traveller Book. Maybe we could use the MT costs?

[1] Rifle Cr 3,500 + 1,500 for the LR Power Pack but in Milieu 1100 the price includes both.

In comparing such costs we should also compute the lowering of the prices due to increased TLs, that may account for some sots decreasing along the time.

Also the cost of several products could vary for reasons other than inflation (as availability and demand). Sure starships are relatively cheaper in Millieu 1100 than in Millieu 0, just due to being more common. In Millieu 0 I envision few (if any) supplus ships being on the market, while I envision as a fairly common occurence in Millieu 1100.

 

[SpaceBadger]

GT: Far Trader has a lot of economic theory stuff, about how the CrImp is adjusted by the regional banks and so forth. I have no idea if what is stated would really work or is just verbal handwaving.

 

[Ishmael]

Pocket Empires discusses exchange rates relative to tech level, infrastructure and resource levels.
That should give relative purchasing power in canon between the tech level changes.