Inflation 101 (Skip to the middle for TLDR of Inflation and responses to PA's logic)

Introduction to Inflation: Unraveling the Phenomenon of Rising Prices

Inflation is a ubiquitous and intricate economic phenomenon that affects the lives of individuals, businesses, and nations on a daily basis. It is a multifaceted concept that revolves around the gradual increase in the overall price level of goods and services in an economy over time. Understanding inflation is crucial for policymakers, economists, investors, and the general populace alike, as it shapes economic decisions, influences financial markets, and has profound socio-economic consequences.

At its core, inflation is a reflection of the diminishing purchasing power of a unit of currency. As prices rise, each unit of currency can buy fewer goods and services, leading to a reduction in real wealth and living standards for consumers. In this introductory exploration of inflation, we will delve into the key facets of this economic phenomenon, including its causes, consequences, measurement, and policy implications.

Causes of Inflation:

Inflation can arise from various sources, often categorized into demand-pull and cost-push factors. Demand-pull inflation occurs when aggregate demand for goods and services surpasses aggregate supply, leading to increased prices as businesses respond to heightened demand. On the other hand, cost-push inflation results from rising production costs, such as increased labor or raw material expenses, which are then passed on to consumers through higher prices.

Consequences of Inflation:

Inflation has far-reaching consequences, impacting various aspects of an economy. It can erode the value of savings, as money held in low-interest accounts may not keep pace with rising prices. Moreover, inflation can distort economic decision-making, leading individuals and businesses to make suboptimal choices due to uncertain future price levels. Additionally, high or volatile inflation can hinder long-term economic growth and exacerbate income inequality.

Measurement of Inflation:

Economists and policymakers rely on various metrics to gauge inflation, with the Consumer Price Index (CPI) and the Producer Price Index (PPI) being among the most commonly used. These indices track changes in the prices of a basket of goods and services over time, offering insights into the general price trends in an economy.

Policy Implications:

Central banks and governments play a vital role in managing inflation through monetary and fiscal policies. They employ tools such as interest rate adjustments, money supply control, and fiscal spending to achieve price stability, aiming to keep inflation within a target range conducive to economic growth and stability.

In the pages that follow, we will explore these facets of inflation in greater depth, shedding light on its complexities and implications for economies worldwide. Understanding inflation is fundamental to making informed economic decisions and navigating the ever-changing landscape of global finance and commerce.

TL:DR the 101 on Inflation:

Inflation is the decrease of purchasing power {of a certain currency} with the increase of prices for goods {available in said purchasing power}. If anything, what PA is describing here is deflation*, not inflation - but I guess they couldn't even get their nomenclature right for how fast they tried to pull these "facts" out of their bums. If they couldn't even get the nomenclature right, how are we supposed to even believe the facts that they are trying to present? But let's say take the facts at face value and dissolve them one by one, since even then they have as many holes as swiss cheese in them.

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*Deflation is the opposite of inflation, characterized by a sustained decrease in the general price level of goods and services within an economy. During deflation, the purchasing power of money increases as prices decline. It often results from reduced consumer spending, decreased demand, or excess production capacity. While falling prices may seem beneficial, deflation can have negative consequences, such as lower business investments, wage reductions, and increased debt burdens. Central banks typically aim to counter deflation by employing expansionary monetary policies, like lowering interest rates or increasing the money supply, to stimulate spending and prevent economic stagnation.

Refutments of PA's Logic:

1. "The challenge for us is to ensure a healthy balance of the game economy" - Pearl Abyss

The economy of BDO is and has been (for the past year or so) in the healthiest position it has ever been. This was achieved by adjusting Central Market Prices to reflect the true value-of-procurement, henceforth balancing out the supply-demand cycle much better than ever. An increase of 50% for enchanting Debo/BS/FG is only going to bring back instability with these (and many other) items once again not reflecting the true cost of achieving them - hence becoming absent from the market, once again. Cron stones have retained the same difficulty of procurement throughout 2016 to today, while the difficulty of procuring end-game gear has grown exponentially (culminating into the abomination that is Pen FG).

2. "When Cron Stones were first introduced in 2016, they were 1 million silver, which was later adjusted to the current price of 2 million silver in 2019." - Pearl Abyss

What PA conveniently forgot to add here, is that this was a non-change, as at the same time with the increase, there was a decrease of the Crons necessary to attempt enchantments. Additionally, they are forgetting to add the fact that Crons used to be coupled with MP prices of the items themselves. And, last but not least, what they are forgetting is that the current endgame items require an average of ~100-300% more Cron stones than the items available in 2016.

3. "Since then, our in-game currency, silver, has become more and more accessible due to updates and improvements to our game such as Elvia Realm updates, monster zone revamps, and more recently, Dekhia’s Lantern. That, coupled with the increased average gear score (correlated with silver income), led to inflation within the in-game economy." - Pearl Abyss

Again, we have a conflation of facts that are seemingly related, but in actuality unrelated. First, Dekhia (Thornwood's) 1b/hr with blue is being conflated with the 700m made in every single other Dekhia or non-Dekhia spot (which is a difference of 30%). Secondly, the increase in avg Gear Score is being conflated with the access to Dekhia (or other 1b/hr gains), while only a miniscule portion of the population is able to access those numbers. Thirdly, I thought the point was to decrease the gap between gear scores, for which this change only punishes (even more) those that started playing the game late and didn't benefit from 50% cheaper crons for the past year or so {of being able to make 1b/hr). Last, but not least, players gaining more silver/hr doesn't lead to inflation, especially in a completely (dev) controlled economy like BDO - decisions made by the dev team to. Also, where is the evidence for inflation in item cost/demand-supply that we're supposedly balancing with this 50% increase in a {potential} money sink?

4. - Pearl Abyss

/Facepalm. First, the trendline is a smooth move used by Data shills all over the world to somehow misrepresent data and is an immediate red flag to anyone who is involved in (big) data (processing) whatsoever. Second, where is the actual detailed chart with a month-by-month analysis to see how much this data is skewed by various other adjustments PA is making to the game (beyond buffing trash/per/hour in grinding). Thirdly, does this data have the same effect with players who do not grind and only use lifeskilling for their gains? Last but not least, Where is the chart showing the (increase) of prices for endgame gear? Sure, silver gains have gone up 400-500% since 2019, but the prices of the top items have become 1000-10000% higher than 2019.

All in all, this chart is very disingenuous, both in how it's presented, but also in the data it represents and the data that is lacking for a full picture of BDOs economy.

5. "We know that this has been a hot topic of interest. After much consideration, we concluded that to ensure the value of these items better reflects the current state of our in-game economy, we needed to implement a targeted adjustment on Pearl Items as well as Cron Stones purchasable from NPC Blacksmiths as follows on September 13, 2023 (Wed)." - Pearl Abyss

Nani? Where was the consideration exactly? Where was the carefulness exactly? Being careful and considerate means communicating this with the community extensively and convincing the 75-90% of players against these changes that you're logic is actually sound. Instead, we're placed in a do-or-die situation where only one of us has a gun. Decreasing player's purchasing power towards a certain (critical) consumable by 50% is not a better reflection of the economy, it's just decreasing their purchasing power. It doesn't serve as a tool to tackle the general inflation of the game, as artificial and sudden adjustments such as these only cause market to destabilise (as it already has in anticipation of these changes with some items disappearing completely) and further inequality (with whoever had benefited before from 50% cheaper crons, gaining an artificial value increase of 50% on whatever they used them on).

6.

Even this table is disingenuous with an attempt to sneak in the vendor cron increase at the bottom after 3 items that could've just as easily been merged into one. It's also really bad optics showing that you're nerfing the ingame availability of an item by 50%, while increasing the p2w value of it by 94%.

7. "We will continue to keep a close eye on the in-game economy and introduce changes as needed." - Pearl Abyss

How about you don't? Just automate the MP better and f-off completely from touching the economy unless the player base asks you for something. Literally, nobody asked for this, and the only ones supporting it either got jebaited by the propaganda you spewed in this update, or are devil's advocate contrarians that will troll in your support regardless of what kind of cr*p you pull.

Some final notes:

Ask any economist, or game-economy designer, and they will tell you that price adjustments are literally the last thing you're supposed to do in an inflating or deflating economy. There are so so so many mechanisms that can be applied prior to that, that it's literally called the 'last resort' in every single economy textbook. Increasing prices as a policy response to inflation is generally not advisable because of its adverse effects on consumers, economic inequality, uncertainty, and other economic factors. Instead, policymakers typically employ a combination of monetary, fiscal, and supply-side measures to address inflation while minimizing negative side effects. If we've reached a point where this is the best mechanism for a silver sink we can think of, then many things have seriously failed in the meantime. It's very indicative how PA is trying to sell us snake oil here by omitting key details from the data represented, as well as forgetting to mention important facts that surround the presented data (such as the decrease in crons needed for gear, or the increase in prices for endgame gear relative to the silver gain at a current point of time)

However, we know that this is not true as the BDO economy (aka Supply and Demand of Items) is in the healthiest state that it's ever been. Furthermore, this price increase does nothing to solve the actual existing problems of the economy and the hundreds of items that have an insane demand and zero supply or vice-versa. In fact, it's quite obvious to anyone with a gram of prediction skills, that this will only work to worsen the problem in several of those items.

This is a cash grab, pure and simple. They are trying to increase p2w viability while making f2p (non-NA) access to crons even more difficult (50% more, might I add). It's sad that they are doing this after garnering such good favor with the community and various content creators, but if they think that this is not going to be picked up upon - as evidenced by the 3/4ths of ppl being utterly livid {even if on NA} - they have a surprise coming at them. What I find cute is that they are referencing 2019 for the cron increase (which led to a fall in the player base for 5-25% depending on the month) and the p2w increase in 2022 (which led to a fall of 17%).

Congratulations on reaching the end of this wall of text - You're a trouper! If you comment in support, thank you. If you comment in rebuttal, make sure you've read everything so that you don't come through as a PA shill.

At this point, it would've been more fair™ and acceptable© by them to just say:

"We want to try to make more money from milking the whales" 

Then to try to sell us this inflation BS as a justification for the changes.

I mean, does anyone believe the inflation BS??? It's all about trying to milk more money.

I'm thinking of, getting orzeca, and instead of going for the grind I was gonna do for TET FG and PEN Distos (only upgrades left rly, screw Debo), just call the game finished after Orzeca and quit, or just go lifeskill. The big grind I was gonna do to max out was gonna be a total of 600 billions...now, with cron increase...it'll be 900 billions...this is INSANE, they don't realize how much this cron difference makes for ppl trying to TET Fallen gods, that aren't completely RNG carried...

Thanks for the work you put into this!

It's gross how they create power creep, then propose absurd solutions to make it possible to deal with it.  I'd almost wish they would just make this a subscription game that was just fun to play, like SWTOR.  Then, I'd just know tha they were in it for the money, and who knows?, they might even get us a better product.  Right now, it feels like lazy people trying to get the most out of the least effort they can put in.  Consider all the buggy updates this past year...... and all the "solutions" to "problems" that just break the game.

I'm getting tired of all the smoke and mirrors.  They should just say that they are tired of this game, and they want us to keep paying them money despite of it.  

This game used to be so good.

Everyone know where this inflation comes from and everyone asking for more and somehow everyone is shocked to what its lead.

OP how PA should make money ? BDO is commercial product to make money, if people stop spending money - game getting close, because they here to make money not for your entertainment.

commi market that we have in bdo has nothing to do with economy. it resembles economy... in north korea. Devs twist and turn prices as they see fit so any inflation or deflation is created by pa. so their excuses for price incrise is pure bs.
also i fail to see logic behind those changes. like if you have money and need crones, why you would buy outfit and then turn it to crones if you can buy crone stone box? also are outfits the best item to turn real money to ingame silver? are ppl realy buying outfits to sell them on market? on eu it looks like fairy tale))) i play bdo for year and did't saw any outfits on sale, i got a few horse gear boxes and that's it. also there is pearl shop item preorder limit, one item, for some time i waiting for permanent horse whistle and defenetly not gona drop it to preorder outfit. 
there is another problem, every one know that enhancing in bdo su... let's say wild and crones are mostly used for pen bs or pen accesories. sure there are new players that cron tuvala...) but they get smart real quick. also 9/10 vids about enhansing tell you that you should buy pen from market and not bother with clicking.
so how pa will encourage players to use more crones?
my bet is soon we'll notice that success rate of all enhansment will go down.

I read it on the official forums soem tiem ago that this is jsut convenience, so what is your point again?

More people need to see this.

These changes will make the game so much worse for anyone not open to spending hundreds in cash on outfits. People need to be vocal about this issue and show PA with their own actions that this is a very bad idea. 

I am not going to spend a single cent on this game unless they reconsider what they're about to do. Just thinking about this upcoming change has been killing my motivation to keep playing the game, I just don't feel like my time as a player is being valued anymore and I am not going to swipe my card to fix this artificial issue that PA themselves created, it's especially egregious as an EU player, where outfits just don't get sold on the central market.

What a shame.

This is true.  And how sad it is, because they're in the gaming business, which should..... I don't know...... entertain?........

Everyone stops playing BDO because of these trash pay to win changes. The game becomes too WHALE friendly, too grindy, too bad. Right when the game was on a good path and kinda left the Pay 2 win realm, they decided "F U we the same as Kakao Games, just cash grabbing the f out of this game"