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I am not sure how well suited my question will be to the platform, but it's a question nonetheless, concerning economics.

I am, rather we are, group of people moderating a real world text-based RPG. Up until now we had pretty straightforward economy mechanics; we had set growths, and all players had to do was to compound it. The system soon ran its course as the game gained in popularity, and with people wanting a system which accounts for in-game decisions, policies, etc.

We've been using GDP PPP rather than market exchange rates. Because our game extends in future, and developing a currency market is pretty much impossible for us.

That said, GDP PPP figures lead to inflated budgets and massive militarization all over Asia, which are hard to account for. We're focussed on the diplomacy side of things, thus military industrial-complexes and conventional industries greatly affect our play.

In the end, my question boils down to: What do we use (GDP PPP v. GDP MER) for an RPG that aims to simulate real world diplomacy?

Note that we want to go way into future, possibly 2050s, and have pretty much no way to simulate a currency market. But, at the same time, we would want our game as realistic as possible. Accounting for real-life volatility in markets will be hard, but we'll up to it if there's a way.

If you guys have anything to contribute, please do. And, thank you.

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    $\begingroup$ Quite an ambitious goal. You may want to look at how the game Democracy 3 has modeled the economy. Also, I believe at the current stage, your question is not well phrased. What do you mean by "use GDP PPP"? Use it for what? To rank users? Or to determine production of military units? Most likely, an introductory textbook in Economics such as Frank + Bernanke, Principles of Economics may help you a lot. $\endgroup$
    – HRSE
    Nov 30 '15 at 13:18
  • $\begingroup$ Pretty much military is the end game here. People use influence of their economies to improve their state, and modernize their military. So, production of military units has been limited by the size of one's economy. Trouble arises when we have availability of two measures, purchase power parity and market exchange rates. While it makes lot of sense to use market exchange rates, say Pakistan wants to buy weapons from USA which will be done in USD, accounting for volatility is hard. Thanks for your time, I hope what I'm asking is clear now. $\endgroup$
    – abae
    Nov 30 '15 at 13:55
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    $\begingroup$ Still a bit unclear what role exactly GDP plays in the game. Using GDP PPP makes sense for transactions within a country, but not across. If GDP determines how much military equipment can be bought then GDP PPP is problematic, because much of this is traded on global markets, where PPP doesn't matter. Hence PPP makes poorer countries seem wealthier than they are on inernational makrets. I would suggest to use GDP PPP for internal transactions and simply use GDP USD for global markets and keep it fixed or give it a time trend for the next years if you're willing to assume not much will change. $\endgroup$
    – BB King
    Nov 30 '15 at 21:13

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