Inflation

[Cetacea]

Playing Prussia in the early '50s my inflation soars! 21% in 1853. Every once in a while I get messages like the one attached. What does it mean, how does it work, and what can I do to prevent / redress this?

[pesec]

Playing Prussia in the early '50s my inflation soars! 21% in 1853. Every once in a while I get messages like the one attached. What does it mean, how does it work, and what can I do to prevent / redress this?

It means you ran out of private capital before expenses for production were paid. To still be able to produce, your capitalists increased prices for your population, gaining the much-needed capital, but also causing inflation.

To prevent that from happening, make sure you have enough private capital at the end of each turn to pay for maintenance (don't use it all).

[Cetacea]

Thnx, Pesec. Any idea what inflation's effects are and how it can be lowered, other than by means of the occasional event 'economic sunshine' (or what's the name)?

[pesec]

Import subsidies for coal, steel and goods decrease inflation. After enacted, decision will regenerate after some time and can be enacted again.

As for effects of inflation, I haven't had it yet. Does it make everything more expensive to produce?

[cebuguy]

Mmmm yeah. Inflation does seem to be a number with a word attached to it that we know from life is never good, we get uncomfortable when it is high.
But what does it actually do in the game?

[Sir Garnet]

To prevent that from happening, make sure you have enough private capital at the end of each turn to pay for maintenance (don't use it all).

To put in in very practical terms, the private capital (and goods and other inputs, for that matter) shown at the top of the game screen when you press END TURN is all that is available to be used for production during turn processing.

If factories or other industries are missing inputs, they shut down, with one exception: if there is not enough private capital available, private capital is added (think of it as printing money) to make up the difference in needed working capital and the result is price inflation.

International sales and domestic sales come later in the turn order and replenish private capital (purchases from abroad use up private capital).

So check F4's line 2 for the private capital reduction and do the math, or just leave a private capital cushion.

The same concept applies to military maintenance - if you don't have enough cash or good left at the end of the turn for both production and maintaining troops, they will suffer.