What I have not seen mentioned here is that inflation (and deflation) often result from changes in player spending habits.

Fixing the amount of money in existence, particularly on a per capita basis, is a start. But if players spend money like crazy, they'll inflate it. If they hoard it (or take a few weeks off from the game) they'll deflate it. If you have 5 gold coins in your game and a player earns fast and spends fast, he can go through the same 5 coins in one session, earning and spending 500 in a few hours. If he does nothing, that's the same as having zero coins in the game.

Fixing the money supply is not good enough. In the "real" world, gold works better than paper because governments cannot inflate it. But if people stop spending and start hoarding, the price of gold skyrockets. There's the same amount in existence there ever was, but there's none on the market. Paper money does not need to have this problem.

The only sure way to keep inflation and deflation under control is monitor your prices (however you measure them) and feed in more cash when they fall and and take it out when they rise, using the sources and sinks discussed elsewhere. This is a lot more complicated than, say, just fixing the money supply. Worse, inflation in a game is more perception than actual rising prices. ("It took me 6 months to save up for my first Dragon Bane Sword. Now I buy them by the dozen.") Perhaps measuring average player expenditure per week would track it. Be sure to do this by level. Otherwise the spending of your level 40 players would inspire such deflation as to destroy your level 1's. The idea would be took keep the level 1 (and 2 and 3) financial experience the same over the years.