Definitive Guide to Economy
Core Tenants
Debt is just a number and gold reserves do nothing for you
Similar to the IRL saying of “make your money work for you” you do not want gold reserves because that money is just sitting in a bank account, whereas using that money instead to continue building will help boost your economy, just make sure to keep an eye on your interest rate. Personally I aim for a controlled fall (losing money at a reasonable pace) instead of spending as much as possible, you should never be going over your gold reserves stockpile limit and ideally you will be in debt for most of the game unless there is a reason for you to have extra gold reserves (examples included upcoming wars, or to pay off the debt of an ally).
Important Note: Insignificant powers receive a +25% interest rate modifier, Minors receive no modifier, Majors a -25%, and GPs a -50%. LZF provides a -25%, and petite bourgeoisie gives another -10% that can be boosted to -20% in addition to reductions in certain techs. You want to stack as many modifiers as possible, if you cannot stack these modifiers be much more conservative with your debt spending.
Autarky for what you have, trade for what you don’t
While it may be tempting to expand and colonize (there are definitely situations where you would want to expand and colonize) it is far easier to simply trade for resources you don’t have. Whereas building up the resources you do have and exporting said resources will help boost your economy. Under no circumstances should you be totally reliant on trade for essential resources: Iron, Wood, Tools, and later Steel and Glass. Some nations naturally will be better at this due to what resources they have, however wood is always a good resource to expand and export that is available to almost all nations.
Build efficiently
Logging camps take 200 construction, iron mines 400, tool workshops 600, and Motor Industries 800, it is more efficient to build cheaper buildings manually and let your investment pool build more expensive buildings. There are situations where you want to build factories but you want to build them reactively most of the time instead of proactively, building 1 steel mill and 1 motor industry when you research and begin to build railroads is a perfect example. This of course changes once your resources are fully exploited and you transition your build to a finished goods economy, however keep in mind there are factories that cost more construction than others. Sidenote, Never build agri buildings unless for a plantation good and even then only build what you need, your investment pool will take care of the ag industry.
Let your investment pool work for you
To expand on tenant 3, you want your investment to build expensive buildings (Factories mainly) and use your construction to build cheaper value buildings or government buildings (barracks, naval bases, ports, admin buildings and universities) railroads are excluded from this as they can be built by investment and should be built as needed. By having a demand for a good your investment will be more likely to build that good, whereas if you build that good the money and opportunity cost will be wasted on something the Al could have done and would have been encouraged to do.
Get rid of your peasants
A laborer is far more valuable than a peasant because instead of producing food for themselves they produce goods which benefit you and have to buy their essential resources which can be made far more efficiently in plantations/farms and factories than in subsistence farms. While working in an industry your workers will earn a taxable wage while peasants do not.
Balance your budget around medium tax
While it may be tempting to go max tax it is better to balance around a budget that has room to grow, instead of balancing with no room to increase when you are in debt and need to pay interest off. Personally I use consumption taxes as a last resort and prefer to use authority on state decrees. It is important to keep in mind that you want your people to have more money as that will lead to them buying more goods. Your main tax will be income tax, which only has a 5% difference between very low, medium and very high.
Losing money while building is perfectly fine and a red number is not always a bad thing
While there is a time where you want to stop building, that time is not as soon as your budget becomes red. When you are in debt your interest cost (different from interest rate) will grow, keep in mind that unrecognized powers receive a +25% interest rate increase. When building you are creating an artificial demand for resources which when you stop building become a surplus that can be exported creating you even more money that did not exist and was not accounted for by the game when you were building.
Do not use labor pms until you are out of peasants
As stated in Tenant 5 you want as few peasants as possible, as long as there are some peasants you want to keep buildings at the highest employment possible. Since the PM’s use resources and lower the amount of workers they are bad until you run out of peasants, at which point they are fine however do not do all factories at once do one industry at a time, otherwise you will have mass unemployment.
The middle class is the backbone of your economy
Your middle class starts small but will naturally expand as the game goes on, you want your pops to have more money to spend on goods instead of just surviving. The more money your middle class has to spend the bigger your economy will grow while not being as politically inclined or powerful as the upper class. Having universities will help your lower class receive qualifications that will help them get jobs that are considered middle class, however remember not to build over innovation cap unless you are having problems with employment of certain jobs (a building not employing due to a lack of engineers or officers is a perfect example of this).
Do not overbuild construction sectors
Construction sector workers are paid directly from your government wages, overbuilding them too early will lead to a downward spiral as you are spending too much money on wages instead of the actual building. Do not lower gov wages, this doesn’t actually help and does a lot of harm no matter how tempting it may be. Do not build more construction just because someone has more than you do, you’re not a sheep don’t follow others just because they tell you to.
Starting Moves (Before Unpause or Immediately After)
Spend your authority on decrees
The Royal Conference mod adds several new decrees and allows you to stack multiple production increases while also decreasing the cost. The only benefit to having high authority is decreased enactment time for laws which is fairly useless if you are already reformed and mid if you are reforming since it caps at 25%. In my opinion consumption taxes are a waste of authority in most situations and should only be used as a last resort to balance your economy if you’ve stopped building and are still losing money.
Queue research
If you do not have Atmospheric Engine that is your number 1 priority, since it doubles your mine output and changes mines from a landowner building to an industrialist building. Usually I queue Railroads making sure Atm Engi is first, followed by working towards skirmish infantry (Intensive ag, Munitions factories, and Skirmish inf tech in this order). It is very easy to become distracted during a MP game so queueing tech is important to not waste research time, there is also no downside to swapping to a different tech (besides opportunity cost) so feel free to add techs based on your situation.
Stagger build mines and construction sectors
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