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   Did Anyone Other Than Citigroup Have Liquidity Puts?

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.

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More