Economy

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This article may contain outdated information that is inaccurate for the current version of the game. It was last updated for Vanilla.

Economy interface

In EU4, the national and international economy underpin almost every function of a country, and often fuels international diplomacy. Understanding and nurturing your country's economy yields better national finances, allowing you to boost your standing in the world and further grow at a faster pace. Economics in the game revolve around the income and expenditure of ducats, the game's international currency, into and out of your country's treasury.

Income[edit]

Income is the sum of all money gained monthly. Unlike in EU3, all income is liquid and does not need to be minted.

Taxation[edit]

Main article: Tax

Tax comes directly from the population and produces a relatively dependable baseline income. Each province has a base tax and a tax income efficiency. The yearly province tax amount is simply (base tax) * (tax efficiency).

Production[edit]

Main article: Production

Production is a measure of the amount of income generated by local trade good producers. Unlike in EU3, production income is added directly to the state's income each month.

Trade[edit]

Main article: Trade

The Trade Value produced by each province flows into the trade network, where it is eventually collected by capitals and Merchants and converted into ducats. Careful management of trade can make it your most powerful source of income by far.

Tariffs[edit]

Main article: Tariffs

Distant overseas provinces do not generate production income. Instead, they produce tariff income equal to 0.20 times the production income they would have produced plus tax before modifiers. The exception is if the province produces Gold, in which case full income is earned. One ship per overseas province is required for tariffs to be collected at full efficiency. For all intents and purposes, tariffs do not play a significant role in the economy due to the stiff overseas penalty and are so small compared to the other income sources that they can be virtually ignored.

Other[edit]

  • Gold: Gold is a special "trade" good. Gold does not produce any Trade Value; instead, it is converted directly into ducats. Gold production income is equal to 40 ducats per year per unit produced, with the exception of pagan and shamanist countries which receive income equal to only 1 ducat per year per unit produced. Income from gold causes inflation per year equal to half its proportion of the country's income; at 100% income inflation would increase by 0.50% per year.
  • Vassals: The overlord receives 50% of the vassals' tax income, although the vassal does not actually lose any income. Feudal monarchies receive an additional 10%, and the French national idea "French Language in All Courts" increases this by 10% as well.
  • Harbor Fees: Agreeing to a Fleet Basing Rights treaty grants an income equal to 0.2 ducats per month per owned port.
  • War Subsidies: Countries that have a strategic interest in another country's wars may grant war subsidies to that country.
  • Looting and Blockading: Looting a province (caused by marching an army onto hostile territory) provides an instant amount of money equal to that province's base tax. However, you cannot gain money from looting if the province has already been looted in the past year, or if the province borders the attacking country's territory. Blockading a province (caused by positioning a navy in a port's sea zone) provides a monthly income[how much?].
  • Bank Loans: Taking a loan grants an amount of money equal to 12 months' income by default. Acquiring the National Bank idea can trigger an event in which loans can be changed to grant money equal to 6 or 24 months' income.

Expenses[edit]

  • Advisors: Advisors have a base monthly salary equal to the square of their skill level, increased by 1% per game year since 1444. So, for example, a level 2 advisor in 1546 would cost 4 × (1 + 102%) = 8.08 ducats per month.
  • Interest: Loans have a default interest rate of 4% per year, paid monthly. The interest rate is increased by 1% for every point of negative stability, can be decreased by 1% each for both the Debt and Loans economic idea and the Bookkeeping administrative idea, and can be otherwise affected by various events, decisions, and unique national ideas (minimum 0.25%). An unlimited number may be taken at any time, although each loan taken increases inflation by 0.1. A loan may be paid back in full, plus the total remaining interest owed, at any time during the loan period. If a loan expires and the borrower cannot (or chooses not to) pay the principal, the loan will be extended for an additional 5 years at the current interest rate, and inflation will increase by an additional 0.1. If the combined interest of loans exceeds a country's income, the country will be forced to declare bankruptcy.
  • Harbor Fees: Signing a Fleet Basing Agreement with another country will cost an amount equal to 0.2 ducats per month for every port belonging to the other country.
  • Diplomatic Expenses:
    • War Subsidies; sending ducats to foreign governments
    • Support Rebels; expending ducats to increase reinforcement rate of foreign rebels (revoltrisk increase occurs with any financial support above 0.00)
  • Colonial Maintenance: Colonies cost money to maintain until they become full cities. The base monthly cost for each colony is equal to 0.66 ducats per Base Tax. The cost is further increased quadratically for each active colony beyond the second - the third colony will cost the normal amount, the fourth will cost four times normal, the fifth will cost nine times normal, and so on. Colonial maintenance can be reduced, but at the cost of colonial growth. At 0% funding, colonies will shrink by 50 each year, and at 100% funding they will grow by 50 each year. Colonial maintenance does not affect growth from colonist agents.
  • Missionary Maintenance: Each active missionary costs 5 ducats per year at full funding. Reducing missionary maintenance reduces missionary strength, for -2% strength at 0% funding.
  • Army Maintenance: Each fielded regiment has a monthly maintenance cost equal to 2% of the regiment's cost to produce (after production cost modifiers, but before mercenary cost modifier), increased by 5% for each Military technology level. Each regiment above the force limit also increases maintenance costs by an amount that increase with each regiment above the force limit[Exact values needed]. If a regiment takes casualties, its maintenance is reduced by the proportion of the losses taken. However, reinforcement costs an increased amount.[Exact values needed]
  • Fleet Maintenance: Fleet maintenance works the same as army maintenance but with several exceptions. First, naval maintenance increases at discrete steps rather than continuously. It is increased by 10% at Diplomatic tech levels 0 and 3, by 20% at levels 9 and 15, and by 25% at levels 19, 22, 25, 27, 29, and 31 (total +210%). Second, each vessel type has its own maintenance modifier. Third, vessels do not cost increased maintenance to repair, but also do not cost reduced maintenance if damaged.
  • Counter-intuitively, War Taxes do not increase tax income. Instead, they decrease army and navy maintenance by 20% each.

Inflation[edit]

Inflation is an increase in the price of goods over time. In gameplay terms, inflation makes all expenses cost more. Low levels of inflation (around 10%), though not ideal, are reasonable. Around 20% or higher, this could signify an economic catastrophe, and measures must be taken to avoid total collapse.

On contrary with real life inflation, in game one does not mean constantly increasing prices, however it is a flat increase in your expenses. In real life certain incomes would increase with inflation as well. This resembles that the in game "ducats" have a constant value over the course of centuries and serve as an absolute indicator of value. In the real history the value of gold was just as volatile as anything else. The in-game inflation simply represents the inflation over the time between collecting income and spending them, therefore representing that the income has lost value while it was sitting in the player's treasury.

Gaining inflation[edit]

Inflation is increased by the following:

  • Each loan taken or extended increases inflation by +0.10.
  • Income from gold increases inflation by 0.50 per year times the proportion of income from gold. (The mechanism seems to be based on gold standard.)
  • Monetary compensations claimed in a peace treaty cause a one-time increase of inflation.
  • Various events can increase inflation.

Reducing inflation[edit]

Passive[edit]

Several effects reduce inflation over time.

  • The National Bank Economic Ideas reduces inflation by -0.1 inflation per year.
  • The Master of Mint advisor reduces inflation by -0.1 per year.
  • The Tax Assessor unique building reduces inflation by -0.05 per year.
  • The Gold Standard decision reduces inflation by -0.04 inflation per year.
  • Various events, decisions, triggered modifiers, and mission rewards can reduce inflation.

Active[edit]

If passive means are unavailable or insufficient, the Reduce Inflation button in the budget panel reduces inflation by -2.00 in exchange for -75 Administrative Power.

  • From Patch 1.2, the Economic idea group bonus is now -33% cheaper inflation reduction.
  • The Resilient State administrative idea now gives -10% cheaper inflation reduction.
  • The Dutch Revenue Stamps national idea now gives -15% cheaper inflation reduction.
  • The Aragon Reforming the Administration national idea now gives -15% cheaper inflation reduction.

Bankruptcy[edit]

A country will go bankrupt if it has negative cash and cannot take loans. Bankruptcy gives a number of negative effects:

Entering bankruptcy also reduces inflation by 25%, and reduces all monarch power to 0.

Financial Ruin[edit]

There are two events related to bankruptcy. Note that these events don't automatically cause bankruptcy; it's entirely possible to receive them without going bankrupt.

At war:

Trigger:

  • Has at least 1 active loans
  • Has at least 2 provinces producing gold
  • Is at war
  • Inflation is more than 20
  • Does not have the country flag Bankruptcy

Mean time to happen

  • Base mean time to happen of 600 months
  • Multiplies value by 0.9:
    • Inflation is more than 25
  • Multiplies value by 0.9:
    • Inflation is more than 30
  • Multiplies value by 0.9:
    • Inflation is more than 35
  • Multiplies value by 2.0:
    • Has the idea National Bank
  • Multiplies value by 0.8:
    • Has at least 3 provinces producing gold
  • Multiplies value by 0.8:
    • Has at least 4 provinces producing gold
  • Multiplies value by 0.8:
    • Has at least 5 provinces producing gold
  • Multiplies value by 0.85:
    • Has at least 2 active loans
  • Multiplies value by 0.75:
    • Has at least 3 active loans
  • Multiplies value by 1.15:
    • Has the Treasurer advisor
  • Multiplies value by 1.1:
    • Has at least 1000 ducats in the treasury
  • Multiplies value by 0.95:
    • Has less than 500 ducats in the treasury
  • Multiplies value by 0.95:
    • Has less than 250 ducats in the treasury

Option: We are on the verge of bankruptcy:

  • Sets the country flag Bankruptcy
  • Changes stability by -3
  • Changes treasury by -1000 ducats
  • Random owned province:
    • Spawns 2 revolt size of peasant rebels
  • Changes inflation by 5

Alternative:

Trigger:

  • Has at least 2 provinces producing gold
  • Inflation is more than 15
  • Has the idea Viceroys
  • Does not have the idea National Bank
  • Does not have the country flag Bankruptcy

Mean time to happen

  • Base mean time to happen of 600 months
  • Multiplies value by 0.9:
    • Inflation is more than 20
  • Multiplies value by 0.9:
    • Inflation is more than 25
  • Multiplies value by 0.9:
    • Inflation is more than 30
  • Multiplies value by 0.8:
    • Has at least 3 provinces producing gold
  • Multiplies value by 0.8:
    • Has at least 4 provinces producing gold
  • Multiplies value by 0.8:
    • Has at least 5 provinces producing gold
  • Multiplies value by 0.95:
    • Has at least 1 active loans
  • Multiplies value by 0.85:
    • Has at least 2 active loans
  • Multiplies value by 1.15:
    • Has the Treasurer advisor
  • Multiplies value by 1.1:
    • Has at least 1000 ducats in the treasury
  • Multiplies value by 0.95:
    • Has less than 500 ducats in the treasury
  • Multiplies value by 0.95:
    • Has less than 250 ducats in the treasury

Option: We are on the verge of bankruptcy:

  • Changes stability by -3
  • Changes treasury by -1000 ducats
  • Random owned province:
    • Spawns 2 revolt size of peasant rebels
  • Changes inflation by 5
  • Sets the country flag Bankruptcy
Economy