The Tip.It Times

Issue 3699gp

Inflation—Is it That Bad?

Written by and edited by Tip.It

On June 16th, we experienced a drastic change to the drops in our PvP system. Instead of receiving drops such as the dragonfire shield, we can now obtain artifacts we can exchange with Mandrith, in Edgeville, or his brother, Nastroth, in Lumbridge. With this we also saw an increase in the amount of money you could earn off each kill, which in turn sprung an increase of people known as "trickers" into the PvP world. This combination of drops being worth more and more, and an increase in people killing others for drops, causes an increase in the amount of money in the game, which is also known as inflation. Usually inflation is seen as a bad thing; the value of your gold starts to go down as items start to rise. However, this time it isn't as bad as it may seem.

When inflation occurs, demand starts to rise because of the excess gold in the economy, causing prices to rise. When demand increases and the supply doesn't change, or, in our case, it may even go down a bit due to people flocking to PvP worlds to partake in the action, causing prices start to rise uncontrollably. Nevertheless, with prices rising, so does the profit people make from obtaining the item in demand. For example, the prices of many Godwars Dungeon items have gone up, but the prices of yew logs have also. Even though the item you want may be three million GP more than its previous price, you would be making more profit cutting logs than before. The economy seems to balance out, and no one besides people with large amounts of stagnant gold end up being hurt. Most of the time it doesn't even hurt the people with the stagnant gold, as most of them will invest in items, or spend it on a skill so the impact on them is lessened.

The majority of people who PvP "trick" are higher-leveled, meaning that they will most likely spend the money they take in on a skill such as Prayer or Summoning. The increase in spending on skills takes some of the extra gold off the market, and sends it to NPC's like Pikkupstix. The amount of GP leaving the game coupled with the rather small amount of RuneScape that actually participates in the PvP trick everyday, makes the amount of gold that actually comes into the game, and stays in the game, far less than many may think.

The effect on the economy of the recent inflation, compared to the deflation of items after the release of such skills as Construction, is very minor. When Construction was released on May 31, 2006, people rushed to buy the planks and materials needed to train it. To obtain the money needed, they sold off such items as partyhats and expensive armors like Dragon. This caused the prices to plummet due to the increase of the items on the market, which in turn dropped many players’ overall bank value. The major deflation after Construction continued on for many months and made people who hunted monsters, such as the Kalphite Queen, earn less off that rare Dragon chain. Even though your gold was worth it, this went on for many months and caused cumulative damage, unlike the recent inflation that has been going on for roughly three weeks but has been promised to be fixed.

People have overreacted about the effects of the statues on the economy. This recent inflation may have caused some prices to rise and supply to drop, but the truth of the matter is that the economy tends to balance itself out. The economy isn’t hurt as bad they believe, or have been led to believe. Although inflation remains to be a problem, it's not as bad as it seems and will be dealt with in due time.

Do you have any thoughts or comments about this week's articles? Want to discuss these articles with your fellow RuneScapers? We invite you to discuss them in this forum topic.


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