BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

Virtual Deflation

Market Movers

by Felix Salmon
Main
The Goldman Sachs Special Sauce   Why Are ARMs So Expensive?

Recent Blog Posts

Links

Nov 15 2007 12:00am EDT

Virtual Deflation

Can you think of an economy where the money supply is increasing but consumer prices are falling dramatically? Eyjólfur Guðmundsson can: it's called EVE Online. Over the course of the third quarter of 2007 – which is equivalent to about three years IRL, money supply rose from ISK75 trillion to just over ISK90 trillion. At the same time, however, both producer and consumer prices have been falling.

Aaron Schiff asks the natural question:

What aspect(s) of the game’s design have lead to breaking the relationship between increasing money supply and inflation?

Since we don't have numbers for GDP in EVE, nor for the velocity of money, it's hard to get a good answer. But maybe Guðmundsson will address the question in his next quarterly economic newsletter.

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.


Connect With Portfolio.com
Like Portfolio on Facebook

Come on, like us—you know you want to.

Follow Portfolio on Twitter

Follow us and if you're an innovative entrepreneur, we'll return the favor.

The Mix

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

Slideshows

500 Startups Hits New York

Dave McClure's brainchild makes its way to New York and introduces East Coast money folks to some intriguing new companies. View Slideshow