Search Posts
If the monetary supply stayed constant while population increased then prices would almost certainly fall. Not because of increased population, but due to the (presumably) increased productive capacity of the entire economy. The more goods available while keeping the supply of currency stable leads to falling prices. Most people fear deflationary markets, however it tends to reward those who choose to save their capital for future investments or purchases. Inflating the monetary supply has the exact opposite effect. It robs the value of the Coin and makes saving ones capital an unwise investment, thus creating a consumers market. Granted, the developers will have vastly more transparency as to the movement of Coin through the economy than their real life central banking counterparts. Central management of the money supply is always attempted in order to grow the supply of the currency at the same rate of production. This seems to be what the folks at Goblinworks are aiming for.
I am actually glad that there will be none of these points of reference because they would end up being set at some arbitrary rate by the game designers. As someone who is passionate about studying economics, I am very excited about the prospect of prices being set strictly by producers of goods. I imagine prices will fluctuate a bit when the game first launches, but these market prices will most likely stabilize over time. It will be interesting to watch and see how this economy evolves. Hopefully we will get more specifics in the near future on how drains and faucets for coinage are going to work. The Goblinworks blog seemed to indicate that the total amount of coin would be slowly ever increasing so expect market prices to be ever inflationary. And if the monetary supply does always increase, will players begin to hoard mass quantities of widely traded goods as a way to preserve their wealth from such inflation? |
