The truth is our monetary policies is what's driving our fake economy to new highs. Without our government printing money and giving it to companies, banks, or even the wealthy, the stock market and housing market would have not reach new highs. I mean really who in the right mind would buy Twitter stocks when Twitter has not made $1 in profits since its inception? But yet today, Twitter is worth billions of dollars. Of course if the government wants to give away cheap and easy money then investors will be willing to make purchases on even the most unprofitable businesses.
Unfortunately in today's markets, savings receives a bad rap. Many believe savings is bad for the economy but this is untrue. Saving is not bad for the economy in fact a good savings rate is very important for the economy. An economy without savings cannot grow to produce capital investments that would be used to create future economic growth. To clarify, if an economy consumed everything it produces there would be nothing left to save and use for future production and growth.
Before the creation of the U.S. Federal Reserve, it was the market who set the money supply. When banks were low on cash deposits the market would increase the interest rate on saving deposits to encourage consumers to place their money in the banks. The banks would then lend out their cash reserves to sound businesses or entrepreneurs. However, unlike today with low interest rates and the Federal Deposit Insurance Corporation (FDIC), banks have no incentive to lend their money to steady and sound businesses. Instead banks are willing to take risk they otherwise wouldn't in order to increase their earnings. If a bank fails or declares bankruptcy, the FDIC will insure all bank deposits up to $250,000 and foot the bill towards American tax payers.
So you see supply, demand, and monetary policies can all greatly effect an economy. Every economy whether virtual or real has to deal with the laws of economics. The truth is, if left untempered the economy will grow and flourish on its own. It isn't until the government or MMO developers try to fix market behavior is when the economy crashes. The truth is governments and MMO developers are not real participants of the economy and since they do not participate they are unable to foresee the consequences and market backlashes of their own actions. The best economies of the world or in MMOs are when there's little government or developer involvement. It is always best to let the free market or the many individual players determine the values and prices of goods circulating in the market, for they who are the ones that can provide market stability.