Economy Mechanic

The Economy is a major mechanic in TNO, reworking Hearts of Iron 4's factories to become more realistic and flexible. Whilst an economic mechanic has existed since the release of TNO, it was extremely exploitable, lacked consequences for misuse, and was reworked into its present state in Patch v.1.2.0 "Toolbox Theory".

GDP

The GDP of a country measures and decides its economic capabilities. Each state has its own amount of GDP. A nation's GDP is the GDP of all of its states combined.

Production Units

Civilian and military factories have been removed as buildings and are instead now Production Units. Depending on their GDP and Power, a nation will get production units. A percentage of the production units will be allocated as Consumer Goods. Nations can decide how much of their production units are diverted to Consumer Goods by using 30 Political Power to adjust Consumer Goods Production. The higher the production, the more GDP growth and Stability a nation will have. The production units that are left can be assigned to military or civilian production, respectively taking on the attributes of base game military and civilian factories. Production units assigned to be military factories can also be converted into military workshops, halving the factory output but doubling the amount of factories.

Power

Your country has a specific amount of Power. Power is created by buildings like Thermoelectric Plants and Nuclear Reactors which can be increased through research. Each production unit needs at least 1 Power.

GDP Growth

Every month, an economy will grow or decrease by a percentage, referred to as GDP Growth. The more money the government spends, the higher the GDP growth, due to investment into the economy. To capitalize on this, it is recommended to have a deficit from 1-10%. Other factors also impact GDP growth however.

Inflation

Inflation is a vital factor in your economy. The amount of inflation you have directly subtracts your GDP growth, decreasing it, and also has negative effects on other parts of your economy such as factory output. Therefore it is in your best interest to keep inflation as low as possible. This depends on how you use your Central Bank, or how much money you print. There is a slider on how much your country prints money. Increasing it will dramatically increase inflation but will also give more money to the government to spend and pay off debt. But money creation is unimportant and will likely never be touched by the player, because the Central Bank's policy is far more reliable and useful.

The Central Bank has 4 different policies: Fresh Off the Presses, which is the default and gives a flat 1% GDP growth, Count Our Pennies, which decreases inflation overtime and becomes more effective the longer it's used, Fight Poverty, which decreases poverty overtime, and Power Things Up, which increases power.

Economy Types

See: Economy types

Centralization

How centralized your economy is depends on how it starts off and the content it has. Centralization and decentralization have their own benefits.