Recessions

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Charles Lewis
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Recessions

Post by Charles Lewis »

Our current economic mess has had me pondering how we could do something like this in VBAM. Since we are not in a position to turn VBAM into a full-blown speculative exercise in intragalactic economics, this is the criteris I used to guide my efforts:
  • 1. random
    2. avoidable
    3. easy to track
    4. straightfoward to resolve/end (note I didn't say "easy"
I decided to link the chance for a recession to an empire's shipyards and their activities, as that seemed an obvious area of interconnected industries and a lot of ancillary dependent activity.

When a shipyard goes idle, i.e. no activity schedule this turn whether it is new construction or ongoing construction, there is a chance the idleness will ripple out into the local economy and cause a local recession. Once the local economy is in recession, there is a chance of it spreading as subcontractors and ancillary support services also get affected. The rule goes something like this:

Recessions
R1.0 Any turn that a shipyard does not have any new or ongoing construction orders, there is a 5% (cumulative) chance of the local system economy going into recession.

R1.0.1 Any system current suffering a recession suffers a -25% penalty to system output and must take a morale check (TN 4) each turn or lose a point of morale.

R1.0.2 Any system adjacent (i.e. one jump away on most maps) to a local system in recession has a flat 5% chance to enter recession; 10% if connected by a trade route.

R1.1 If a construction order is placed at an idle shipyard in a system currently suffering a recession, the recession has a 5% (cumulative) chance per turn of ending.

R1.1.1 Any system in a recession adjacent to a system that ends its recessionary status has a 10% (cumulative) chance per turn of ending its own recession; 20% (cumulative) if connected by a trade route. Note that multiple neighboring systems ending their respective recessions offers multiple chances. i.e.[/e]two neighbors both connected to a system by trade routes would offer 2 20% chances that would grow each turn until the target system's recession ends.

R1.1.2 A local system's recession can also attempt to ended by spending EPs on a local stimulus package. Each EP spent provides a 2% chance of ending the recession in that system, and up to 45 EPs can be spent per turn (for a max 90% chance to end the recession via a stimulus package). A stimulus package provides an additional chance to end a recession in a system on top of any opportunities due to neighbors ending their recession (regardless of mechanism).

R1.2 Recession can be avoided in the first place by spending twice the normal maintenance cost each turn the shipyard is idle to represent the costs involved in keeping labor forces in place and supply chains running in the absence of specific orders.

R1.3 Any system that recovers from a recession is immune to future recessions for 12 turns after its recession ends.

_____

Thoughts? Comments?
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Post by mriddle »

You may want to consider Census.. a Census 1 world in recession seems less likely to cause a neighboring Census 12 world to go into recession..

or what about
chance of recession = 1 - (Census/4 )/(Productivity used locally/2 +1) ie it will be a growing idle population that is the trigger.. ie you can not spend all of the EP in one place..
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Post by Charles Lewis »

That's a thought, but a larger scale way of looking at this potential problem. My original idea is actually more along the lines of worst case scenarios for the auto industry collapse and subsequent events, while going with a Census basis like you propose would be more a general systemic recession.
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Post by Chyll »

Sitting at work so can't go hunting, but weren't there already some basic economic downturn/recession rules out there already?

Not as comprehensive as this, but may provide another reference.

Giving it somre thought, I belived they were tied to forcing an economy to stay at wartime setting for an extended period. So, probably a different issue.
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Post by Charles Lewis »

No, there were some rules I came up with a while back that allowed a power to go into deficit spending after a war to buy time to get their force structure back into something that could be supported by a peacetime economy. The basic restriction was that you couldn't invest in anything new of any sort until the deficit spending had stopped and any resulting debt was paid off.
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Post by Chyll »

That sounds like what I was thinking of, Charlie. 8)

And if you created those (like I said don't have the reference at hand) then I'd say you've considered them as much as necessary in the context of your proposal here. :D
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Post by Chyll »

Given further thought, I am cautious on this idea.

Now, I have always assumed that there is a lot of "background" activity within an empire, including economic, that is civilian/non-governmental and outside the scope of VBAM. Even trade routes are driven by diplomatic/policy decisions.

The factor proposed to drive the checks are shipyard utilization at a given system. There are other avenues to absorb spending within an empire's budget. For instance, a turn or two of significant tech investment could drive a system into recession, even though the money is "circulated" into the economy. The spending still reaches the background economy, just not through the shipyards.

Additionally, this implies that systems without a shipyard could never enter a recession on their own. From a modeling perspective I understand it, but there could be other factors - agricultural, mining, etc. - that realistically could be as or more significant as recessionary triggers.

All that said, I do not see another clean way to put in the system specific layer that you have provided. Its a layer of complexity (or two) but still pretty slick.

There's probably other arguments besides my samples here. This isn't to say that I don't like the proposal (actually I do). I just am not 100% certain that it doesn't over simplified.
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