EU Economics System

Angleter

EUROPEAN UNION

ECONOMICS SYSTEM

This is an introduction to the EU's RP economics system, an explanation of its terms and where the information comes from, and a guide on what you can do to improve your nation's economy, and customise it to suit your nation as much as possible.

POPULATION

Under the RP population system, your RP nation's population is based on your nation's population on NationStates (NS). It is calculated as follows:

Up to 400 million NS population: NS population x 0.05

Above 400 million NS population: (NS population - 400 million) x 0.005 + 20 million

So if Nation A has an NS population of 362 million, and Nation B has an NS population of 4.5 billion, then their RP populations are as follows:

Nation A: 362 million x 0.05 = 18.1 million
Nation B: (4.5 billion - 400 million) x 0.005 + 20 million = 20.5 million + 20 million = 40.5 million

AVERAGE SALARY

This is the average income of your nation on NS, in its own currency, divided by six. For example:

Nation A (NS average income of 265,768 snickers): 265,768 / 6 = 44,294.67
Nation B (NS average income of 61,789 crisps): 61,789 / 6 = 10,298.67

Note that the final figures are rounded to the nearest hundredth.

LIVING SPENDING

This is the first custom feature. You can choose how expensive living costs are as a percentage of income. On average, living costs in a European-style nation are around 36% after tax (or 25% before tax). The 36% figure is recommended if you are unsure.

REMAINING INCOME

Average salary minus living spending.

**GROSS FIXTURE CAPITAL INVESTMENT / SAVINGS (GFCI)

GFCI is the physical manifestations n an economy. Those savings enable institutions to invest in physical assets in the economy like new technologies, etc. The real-life OECD average is around 20%, with more prudent savers being liable to put away as much as 27% of remaining income into savings.

Nations that have highly consumer-based economies tend to have lower savings, while nations that tend towards higher savings (such as real-life Australia) have higher levels of GFCI in their economies. Note that this money does not go away completely from your economy.

SAVINGS TOTAL

The raw amount of savings from remaining income, calculated from GFCI (which is measured as a percentage).

DISPOSABLE INCOME

The money that citizens use to spend in the economy in the consumption figure.

GDP

GDP is calculated thus:

Consumption + GFCI + Government consumption in the economy = GDP

Unfortunately, international trade is not currently a part of the RP economics system. You are free to RP trade, but it will have no effect on the size of your nation's GDP. In fact, many real-life economists leave trade out of GDP calculations as it has a comparably negligible effect on GDP.

Consumption

Disposable income multiplied by population.

GFCI

GFCI multiplied by population.

Government consumption in the economy

This is not the same as government spending. This only accounts for how much your nation's government spends on goods and services independent from itself. So, for example, spending on aircraft for the military would count, but spending on hiring civil servants would not.

The figure is calculated as average salary, multiplied by population, multiplied by government consumption as a % of GDP. This latter component is another custom figure.

The real-life OECD average for government consumption as a % of GDP is 18%, and the world average is 17.9%. However, the real-life EU average is 20%, and the average for less economically developed countries is 11.9%.

Therefore, if your nation has an average salary of over 20,000, then you should set this figure at 20% or more. If your average salary is lower, then you should set this at 18%.

GDP

Calculated from the above components according to the above formula.

GDP per capita

GDP divided by population.

NS Euro to Currency X

The exchange rate on NationStates for your currency in relation to the NS$.

RP Euro to Currency X

The value of the RP Euro is set at NS$1.3, so this figure is NS Euro to Currency X divided by 1.3.

GDP in Euros

GDP multiplied by RP Euro to Currency X.

GDP per capita in Euros

GDP in Euros divided by population.