Economic model and Recessions

from Stardock Forums
I maybe way over thinking this one but according to basic Keyesian economic thought I should be able to cut taxes and spend my way out of a recession regardless of what the other Civ's are doing. That hasn't/doesn't work and I end up in a full blown depression (No Resources) and bankrupt.

Does the recession event (nightmare) happen totally randomly from begining to the end or can certian events end one once it is triggered? Is there any relationship?
190 views 6 replies
Reply #1 from Stardock Forums Top
The recession will eventually end. In the meantime, just make sure that you don't go into deficit spending and build stuff that will help your economy. Starbases with the trade bonuses will help if you can afford to build the constructors.
Reply #2 from Stardock Forums Top
Keyesian economics doesn't apply in GalCiv, because the price of everything is fixed. One BC always equals one production unit.
Elemental: Reforged
Reply #3 from Stardock Forums Top
Keyesian economics doesn't apply in GalCiv, because the price of everything is fixed. One BC always equals one production unit.
Reply #4 from Stardock Forums Top
The Keynesian advice of spending your way out of a recession was given in the context of the Great Depression, which was a unique circumstance in itself. GalCiv recessions are random events more akin to external supply shocks that you really can't do much about. As far as the pricing struture goes, I don't think it's relevant at all. You can always regard BCs as a basic unit of production instead of some monetary unit too.
Reply #5 from Stardock Forums Top
plus i think it was mentioned somewhere on usenet the economy is supply side based while kensyian is demand side.
Reply #6 from Stardock Forums Top
Heck, for that matter, Keynesian theory has been shown not to apply very well to the real world.

Cutting the over tax rates when above about 40% will stimulate the realization of profit and thus encourage investment, but the spending increases - even of the Fed Govt - are *way* too small to have any real effect on the economy.

Galciv does model the Laffer curve in taxation (why Income rolls off at rates over about 50%), but the populous does not respond like investors, and the slower appearance of social programs tends to affect their morale negatively.


~SDC~