Why should inflation be countered? Inflation doesn't have a bad influence on the economy at all. I don't see why a moneysink would be needed at all. I'm not saying a moneysink would be a bad idea, but it isn't needed. If they want to add one, they should, but they shouldn't just do it to 'fix' something that isn't a problem.

 

You sell all of your items, leave the pile of gold in the bank for a year and then tell me that inflation isn't a bad thing.

What the hell is a toin coss?

One thing I think you've failed to realize is that money that is in game but is never traded doesn't contribute to inflation. You know, people with active accounts who have cash supplies and never use it. The biggest piece of evidence that I have to support this is the EXP weekend - in the days leading up to it, the price of everything miraculously rose, even though there was no new way to get money in game. After EXP weekend, trading came to a standstill and the price of everything reverted back to the pre-exp weekend amounts.

 

The other way to "fix" inflation is to introduce more items, or make the rates of items entering in game faster. If the rate that rune scimitars entered the game increased two fold, the value of the GP would rise against the value of the rune scimitar.

 

 

 

I've said this before, and I'll say it again: Inflation does not hurt active players. The price of everything might *rise*, but the time it takes to get everything doesn't change.

Im going to try and input my ideas on this subject the best I can.

 

Runescape is a game where people want to make money ( I know I do) So to add something like a tax or any other method that is not skill or game based (IE construction or your idea with the Regal Clothing) would not be highly accepted. It's something in my opinion the average runescape player would not understand. I can see the riots now.

"We play the game to make monize!!"

"We pay to make money!!"

Ect...

You will have this all over runescape from kids that are not seeing it's actually helping the economy. The average player dose not care about anyone else. They are out in the game for themselves and nothing more.

I actually love the idea of taxing, the amount is up for the debate, however I just don't see the average player understanding and accepting the idea.

 

Your idea on Regal clothing actually is awesome. However, I believe all the items should be untradeable, and super expensive to make. The only down side is if it's that expensive to make, the average player won't be able to make them. So it would only be a drop in the bucket with what needs to be done.

 

The only option I can see is another skill that is a money sink skill. I know construction and summoning where money sinks, and It did help for a little bit but. I feel as though that there is so much money out there, it would be really really hard to make a new skill or idea to get rid of that much money and still be popular with the general public.

im more for adding more useful high lvl content for construction and integrating it into the world more.

 

Also, shops in the game are WAY underused. we need high lvl gear that you can only buy from shops and cant trade.

One thing I think you've failed to realize is that money that is in game but is never traded doesn't contribute to inflation. You know, people with active accounts who have cash supplies and never use it. The biggest piece of evidence that I have to support this is the EXP weekend - in the days leading up to it, the price of everything miraculously rose, even though there was no new way to get money in game. After EXP weekend, trading came to a standstill and the price of everything reverted back to the pre-exp weekend amounts.

 

The other way to "fix" inflation is to introduce more items, or make the rates of items entering in game faster. If the rate that rune scimitars entered the game increased two fold, the value of the GP would rise against the value of the rune scimitar.

 

I've said this before, and I'll say it again: Inflation does not hurt active players. The price of everything might *rise*, but the time it takes to get everything doesn't change.

Actually, if you re-read the first post I make a comment about banned accounts removing gp from the economy. Not using your gp has a similar impact as having it banned, though the option of that money coming into play later is on the table so I didn't mention it being for or against inflation. The EXP weekend was supply and demand at work. People knew that fast XP skill items would be in demand so they raised their prices on it, likely using junk trades as the GE itself would have been slow to respond. That wasn't about inflation, that was the free market at work.

 

Introducing items only counters inflation on that item. That's not a solution, that's just supply and demand. The same can be said with introducing more players to create more gp sponges (granted, they also make gp). Ok, so maybe it's better to think of this all as a balance between player activity, items in the game and gp in the game. The situation is very dynamic so one solution will not work for all cases.

These ideas are actually really well thought out. The PvP tombstone idea is actually amazingly good seeing as it would promote people from start using higher valued items again (Old PvP feel) as well as incorporate a money sink into PvP which generates GP. The GE tax should have been there from the start as many people have said. If you want the convenience of using the GE you should pay a little extra to ease the inflation. A normal tax rate of 1-2% is pretty much enough to help inflation out by a lot.

 

In general I love these ideas.

The EXP weekend was supply and demand at work. People knew that fast XP skill items would be in demand so they raised their prices on it, likely using junk trades as the GE itself would have been slow to respond. That wasn't about inflation, that was the free market at work.

 

In the weeks leading up to EXP weekend, 1 gp bought less of everything. That is inflation.

 

 

There's a well known equation that deals with inflation,

M*V = P*Q

 

I.E. the money supply multiplied with the velocity of money is equal to the average price level times the number of transactions.

Leading up to EXP weekend, the money supply *really didn't change*, but the velocity of money did. The price level on everything increased, and the number of transactions *slightly increased*. When the price level on everything increases, that's inflation.

The EXP weekend was supply and demand at work. People knew that fast XP skill items would be in demand so they raised their prices on it, likely using junk trades as the GE itself would have been slow to respond. That wasn't about inflation, that was the free market at work.

 

In the weeks leading up to EXP weekend, 1 gp bought less of everything. That is inflation.

 

 

There's a well known equation that deals with inflation,

M*V = P*Q

 

I.E. the money supply multiplied with the velocity of money is equal to the average price level times the number of transactions.

Leading up to EXP weekend, the money supply *really didn't change*, but the velocity of money did. The price level on everything increased, and the number of transactions *slightly increased*. When the price level on everything increases, that's inflation.

1 small problem to that argument. In the EXP weekend, the prices of all high level items fell. Check prices on Godsword/GWD/Barrows

They could put crimson charms on a vendor for 6k each.

Dragon bones for 5k.

Heck they could just put consumeables on the ge with no real seller; the cash would just vanish.

We don't actually have any issues with inflation right now, so what's the point of trying to remove cash from the economy? It'll just make things worse.

When the price level on everything increases, that's inflation.

 

Technically, no. Inflation means an increase in the supply of money. Often, prices rise because of an inflated supply of money but it isn't necessarily so.

 

Gp in Rs is not quite the same as dollars, gp cannot be arbitrarily printed. The increased in supply is due to the gathering of gp being easier to get and from an increase in the number of players. In that sense, gp is like any other item: say coal or bones. The difference is that gp is more universal, it can be used at shops and has no direct use in any skill (unlike bones or coal).

 

The price of iron ore before the ge was about 100 gp per ore, at the moment it is about 200 gp per ore. I wouldn't attribute this to inflation even though the price has risen. The supply and demand dynamics are probably more important with iron ore. Iron ore isn't particularly rare, unlike a party hat where the price always increases. Supply of gp is enormous while the supply of party hats is tiny. But we could price party hats in terms of gp or iron ore and still come to the same conclusion. The price of iron probably hasn't inflated as measured against party hats it has lost more value.

We don't actually have any issues with inflation right now, so what's the point of trying to remove cash from the economy? It'll just make things worse.

 

Actually, we DO have a problem with inflation. The problem is that cash is absolutely worth nothing. That seems like a big problem to me.

 

A game based around making money, because money revolves around everything in RS. A game where money is the answer to how good of a player you are, because with money you can level up faster. And money is completely useless, and you're forced to use junk items and street price just to play.

We don't actually have any issues with inflation right now, so what's the point of trying to remove cash from the economy? It'll just make things worse.

 

Actually, we DO have a problem with inflation. The problem is that cash is absolutely worth nothing. That seems like a big problem to me.

 

A game based around making money, because money revolves around everything in RS. A game where money is the answer to how good of a player you are, because with money you can level up faster. And money is completely useless, and you're forced to use junk items and street price just to play.

Money is worse less than it used to be in the past, but prices are perfectly stable and there are no real issues at the moment.

When the price level on everything increases, that's inflation.

 

Technically, no. Inflation means an increase in the supply of money. Often, prices rise because of an inflated supply of money but it isn't necessarily so.

 

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the price level rises, each unit of currency buys fewer goods and services; consequently, annual inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

(emphasis added)

http://en.wikipedia.org/wiki/Inflation

 

Inflation does not have to be an increase in the supply of money.

In the equation I posted (that's pretty well accepted by economists), MV = PQ

 

That is to say, P = MV / Q.

IF (and this is a big if) the velocity of money and the transactions that occurred were held constant, inflation would exactly equal the change in the supply of money.

 

 

 

In the current economic crisis, its known that the supply of money has greatly expanded (and by some estimates tripled). Why haven't we seen inflation? The velocity with which the money is moving is practically zero.

 

 

Actually, we DO have a problem with inflation. The problem is that cash is absolutely worth nothing. That seems like a big problem to me.

Can you please explain to me why it matters if a shrimp costs 5 gp or 6 gp?

When the price level on everything increases, that's inflation.

 

Technically, no. Inflation means an increase in the supply of money. Often, prices rise because of an inflated supply of money but it isn't necessarily so.

 

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the price level rises, each unit of currency buys fewer goods and services; consequently, annual inflation is also an erosion in the purchasing power of money a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]

(emphasis added)

http://en.wikipedia.org/wiki/Inflation

 

Inflation does not have to be an increase in the supply of money.

In the equation I posted (that's pretty well accepted by economists), MV = PQ

 

That is to say, P = MV / Q.

IF (and this is a big if) the velocity of money and the transactions that occurred were held constant, inflation would exactly equal the change in the supply of money.

 

 

 

In the current economic crisis, its known that the supply of money has greatly expanded (and by some estimates tripled). Why haven't we seen inflation? The velocity with which the money is moving is practically zero.

 

 

Actually, we DO have a problem with inflation. The problem is that cash is absolutely worth nothing. That seems like a big problem to me.

Can you please explain to me why it matters if a shrimp costs 5 gp or 6 gp?

 

 

Let's have an exaggerated scenario. If the inflation rate, or the rate of net GP flowing into the game is such that everyday, the price of every item gets a zero added to it. Shrimp's 5 gp and iron ore's 200 gp today, 50 gp and 2000 gp tomorrow, 500 gp and 20000 gp the day after. One iron ore is still equivalent to 40 shrimps, but anyone with 5 gp on his hand today won't be able to get anything tomorrow. The purpose of GP is to act as a universal currency, and with inflation no one wants GP on his hand. Unless you think that barter-trading is the way to go, inflation should be curbed.

THERE IS NO INFLATION RIGHT NOW.

 

We don't need to "fix" what ain't broken.

Inflation does not have to be an increase in the supply of money.

In the equation I posted (that's pretty well accepted by economists), MV = PQ

 

That is to say, P = MV / Q.

IF (and this is a big if) the velocity of money and the transactions that occurred were held constant, inflation would exactly equal the change in the supply of money.

 

In the current economic crisis, its known that the supply of money has greatly expanded (and by some estimates tripled). Why haven't we seen inflation? The velocity with which the money is moving is practically zero.

Actually, we DO have a problem with inflation. The problem is that cash is absolutely worth nothing. That seems like a big problem to me.

Can you please explain to me why it matters if a shrimp costs 5 gp or 6 gp?

Well, I guess looking at the 180 day graph of the top traded items, you see quite a few items with stable prices (deaths, yews), a few that go up (mithril, DRAGON BONES!), and a few that drop (Bloods?). Granted, we are looking at a dynamic situation of not only GP but Items entering the game. Items constantly entering and leaving the game can help for a stable economy.

 

Ok, what about items that don't enter so fast? I think rares and boss drops might qualify. Of course the rares are constantly going up, in addition to most of the 3rd age items. All the other high priced items seem to experience a drop over the last 180 days on average. Then it slowly shows stabilization near the bottom of the list.

 

Mike_Ike seems to have a good point. There's rares and certain items that drastically rise in price. One due to be a closed market while the others may just be reaction to a game update and market forces. Granted, that's only from a cursory look at the graphs so those that look at it all the time may have a better say on the average prices of items.

 

About the shrimp: I personally think for low priced items, the GE should allow for decimal bids ie I want to by 10k fire runes at 5.55 gp each (550k). Instead I must bid either 5 gp or 6 gp (either 500k or 600k). That's a big difference for items bought and sold in bulk.

Why should inflation be countered? Inflation doesn't have a bad influence on the economy at all. I don't see why a moneysink would be needed at all. I'm not saying a moneysink would be a bad idea, but it isn't needed. If they want to add one, they should, but they shouldn't just do it to 'fix' something that isn't a problem.

 

You sell all of your items, leave the pile of gold in the bank for a year and then tell me that inflation isn't a bad thing.

You should spend all your cash on high-end items and use them for a year and then tell me that inflation is a bad thing.

 

For some it's good, for some it's bad, but your axample doesn't show that inflation is bad, just that it CAN be bad for people who aren't smart enough to do something sane with their money

 

It;s positive for some and negative for others. This doesn't mean it's damaging the economy. Certainly not when it balances out, which is the case with inflation.

Don't take money from legit players, if you want to fix the economy:

KILL THE BOTS!!!! Make their owners pay £500 to Jagex!

IP BAN THEM!

BRING BACK HARSH RANDOMS!

 

Cool story.

 

 

THERE IS NO INFLATION RIGHT NOW.

 

We don't need to "fix" what ain't broken.

 

Orly? This rare hyper inflation didn't just come out of nowhere. Since godwars came out the amount of 100m+ players has skyrocketed. Everyday average players have now become successful merchants due to the ease of working the G.E.

 

You can't honestly tell me this past year or two hasn't brought in massive amounts of money into the game.

They could put crimson charms on a vendor for 6k each.

Dragon bones for 5k.

Heck they could just put consumeables on the ge with no real seller; the cash would just vanish.

Which proves that more items DO counter inflation. Say there is x amount of money and y amount of items. If y increases, and x stays the same, the price per item (x/y) is bound to fall.

THERE IS NO INFLATION RIGHT NOW.

 

We don't need to "fix" what ain't broken.

 

Orly? This rare hyper inflation didn't just come out of nowhere. Since godwars came out the amount of 100m+ players has skyrocketed. Everyday average players have now become successful merchants due to the ease of working the G.E.

 

You can't honestly tell me this past year or two hasn't brought in massive amounts of money into the game.

There was inflation the last two years. Not right now. Price levels are quite stable. Adding deflationary measures now would do the opposite of what we're aiming for - it would introduce instability to a stable system.

There was inflation the last two years. Not right now. Price levels are quite stable. Adding deflationary measures now would do the opposite of what we're aiming for - it would introduce instability to a stable system.

Hmm, let's say that inflation has stopped and now we have equilibrium in a majority of items (it'll be impossible with all items just due to the dynamic nature of the game). Anti-inflationary measures also have the added benefit of giving more purchasing power to the gp. That in itself could be considered good as a means to encourage methods to produce gp. Not get gp (ie merchanting), but things that actually make it (PvP, alchemy, monster drops).

 

Still, if inflation stabilized over the last 6 months at least gives proof that from the GE opening (and closing of PvP) on up to PvP worlds followed by PvP statuettes seriously unbalanced the economy. That is until the release of auto-skull and +1 worlds likely being the stabilizing effect.

Let's have an exaggerated scenario. If the inflation rate, or the rate of net GP flowing into the game is such that everyday, the price of every item gets a zero added to it. Shrimp's 5 gp and iron ore's 200 gp today, 50 gp and 2000 gp tomorrow, 500 gp and 20000 gp the day after. One iron ore is still equivalent to 40 shrimps, but anyone with 5 gp on his hand today won't be able to get anything tomorrow. The purpose of GP is to act as a universal currency, and with inflation no one wants GP on his hand. Unless you think that barter-trading is the way to go, inflation should be curbed.

 

MV = PQ

 

 

Inflation is defined as the rate of change in the price level of goods, i.e. dP / dt.

This means that the amount of currency, M, is one variable in the entire thing. The inflation rate does not necessarily equal the rate of GP entering into the game. If you want to have a discussion about economics in runescape, at least get your terminology correct.

 

If inflation is 2% per year, it isn't a problem for active players. If you're worried what inflation is doing to the value of your bank, don't hold any currency. The player with 5 gp on hand in your hyperinflation scenario should immediately buy a shrimp, problem solved. For every day transactions, it doesn't matter if 35,000 gps buy a rune scimitar or 70,000 gps buy a rune scimitar, as long as it takes the same amount of time to get that rune scimitar.

I do agree with the notion of a GE tax, but only on specific items and only on specific trades (probably non-consumable trades over 5M). But this brings to light a major fault in most major money sinks.

 

It won't hit the demographic that needs to drain cash out of the game (merchants, hoarders, etc), but rather everyone else. If it's popular, and it's known to be a major drain, then the wealthy elite simply will sidestep it, whereas everyone else will happily dive right into it. It's something similar that happened with Construction; yes, that skill is the Mother of All Money Sinks, but it affected everyone besides the merchants.

 

As I see it, the only way a money sink would be effective is if it were used in conjunction with something that limited the amount of wealth someone could hold at once. Say a cap on the number of held rares, for instance. That plus a money sink/tax on the GE would be more effective, as it has an effect on all players.