Central Banks

Each active country has a central bank with an appointed Central Bank Chair — a player-held position that controls the country's prime interest rate. The prime rate ripples through bond prices, corporate margins, exchange rates, and inflation.

The Central Bank Chair Role

The Chair is the most economically powerful non-executive position in the game. Unlike elected offices, it is an appointed position with a 4-year term (192 turns).

Benefits of holding the Chair:

• +0.5 national political influence per turn
• +3 actions per turn (the "chairActionBonus")
• A platform to set monetary policy

Drawbacks:

• Chair infamy (scrutiny) rises when inflation or GDP growth deviate from targets
• High infamy halves your NPI bonus and costs 1.5 actions per turn
• Poor monetary policy is politically visible — it affects your favorability

How Infamy Works

The Chair's infamy (scrutiny) tracks how well you are managing the economy. Each turn:

scrutinyDelta = (inflationRate − 2.0) × 0.5      // high inflation → more scrutiny
              + (2.0 − gdpGrowth) × 0.5           // slow growth → more scrutiny

Targets: 2.0% inflation and 2.0% GDP growth. Every 1% deviation from either target moves infamy by 0.5 points per turn.

Natural decay is 5% per turn (same as character infamy). Good economic conditions let infamy fall naturally; bad conditions push it up faster than decay.

Positive effects (infamy reduction) are dampened at high scrutiny:

dampener = max(0.1, 1 − chairInfamy / 150)

At infamy 75, positive effects are cut in half. At infamy 150+, they are reduced to 10%. Once scrutiny climbs, it is hard to shed.

Infamy penalty threshold: Above 25 infamy, chair bonuses are halved (+0.25 NPI instead of +0.5) and 1.5 actions are debited each turn.

Chair Selection

When a term expires, a new Chair is selected from two pools:

Lobbying funds shift weights within each pool: spending $500,000 on lobbying doubles your selection weight.

The selected candidate must accept the offer. If they decline, the next eligible candidate is offered the post. Political pool declines re-run the weighted draw with decliners excluded.

Term length: 192 turns (4 game years) Nomination window: Opens during the last 48 turns of the current term

Setting the Prime Rate

The Chair sets monetary policy by adjusting the prime rate. This is done through the character's available actions on the Central Bank page. The prime rate affects:

1. Corporate Bond Costs

Coupon rates on new corporate bonds = prime rate + credit spread. Raising rates makes borrowing more expensive for corporations, reducing expansion capacity. Lower rates make bonds cheap and encourage investment.

2. Sovereign Bond Coupon Rate

Sovereign bonds pay exactly the prime rate — no spread. New bond issuances each quarter carry whatever the current prime rate is. Higher rates mean the government pays more interest, widening the deficit.

3. Exchange Rates

Higher prime rates strengthen the currency:

macroTarget drift += (primeRate − baselinePrime) × 0.02

A 2.5% rate hike above baseline strengthens the exchange rate target by 5%. The actual rate converges at 5% per turn, so the full effect takes many turns to materialize.

4. Inflation

The prime rate is a direct inflation management tool. High rates dampen borrowing and spending, reducing inflationary pressure. This relationship is captured in the per-turn inflation recalculation, which feeds GDP growth data and prime rate into an inflation model that updates every turn.

5. Corporate Profit Margins (via Inflation)

Inflation affects all corporate sector margins:

Controlling inflation keeps corporate margins healthy. Letting inflation run creates economy-wide margin compression.

6. Corporate Growth Costs

Revenue growth costs scale with the prime rate. Higher rates increase the cost of growing each sector's revenue, slowing organic expansion across all corporations.

Central Bank and Fiscal Policy

The Chair does not control fiscal policy — that requires legislation passed through the legislature. But monetary and fiscal policy interact:

• High deficit spending stimulates the economy (boosting growth and margins) but can fuel inflation
• High inflation forces the Chair to raise rates, which raises borrowing costs, which can slow growth
• High national debt crowds out private investment, reducing margins across all sectors

A Chair who raises rates aggressively to fight inflation may tip the economy into a slowdown. Too slow to act, and inflation compounds. This is the classic monetary policy tradeoff — played out in real time across all active countries simultaneously.

Savings and Credit Lines

The central bank system also manages player savings accounts and lines of credit. Interest on savings deposits flows through the central bank's reserve balance. These are secondary functions separate from the main Chair role.

See also: Currency Exchange, National Metrics, Sovereign Bonds, Corporate Bonds, Government Approval