[MUD-Dev] DESIGN: Active and Inactive currency

[Paul Schwanz]

Freeman, Jeff wrote:

> My assumption is that it's generally a bad thing for money to be
> inactive.  A healthier economy has a better ratio.  We know how to
> control inflation in a faucet-sink-drain economy (faucet less
> money, drain more), but what do you to get a better ratio of
> active to inactive money?  I suppose that introducing less money
> and removing more money works up to a point, but it's got to be
> counter-productive sooner or later.  i.e. If money becomes too
> scarce, won't players react as they do to all shortages: Hoard it
> and thereby convert more available money to inactive money, the
> opposite of your intended goal?

IANAE, but...

In the real world, we have an incentive not to have inactive money.
We know that it takes money to make money.  Everyone is encouraged
to put their money to work in order to earn interest.  It seems to
me that interest rates can be adjusted to find the right balance of
incentive to spend immediately and incentive to save.

Personally, I've always liked the idea of having player-created
paper currency in games, backed by some sort of valued/usable (maybe
even perishable?) resource.  In such a case, banks don't function
merely as additional storage for hoarding, but are the
player-operated locations where you can exchange paper for resource
or vice versa.

I wrote a concept piece set in Atriarch some time ago to try to
explain this sort of approach.

http://www.kanga.nu/archives/MUD-Dev-L/2001Q2/msg00126.php

I *think* this sort of approach would make money and banking much
more interesting as well as more closely representing our
expectations and intuitions regarding an economy, but again, IANAE.

--Paul "Phinehas" Schwanz
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