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Economics

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  • $\begingroup$ Every hour, the total gold to the whole universe increases by total_workers * worker_wage (created by thin air). So there is no inflation because the total gold in a universe increases with the same deterministic way. People "store" their provided work in the form of gold. Prices for goods are always the same which is the proof that inflation doesnt exist. $\endgroup$ Commented Dec 11, 2016 at 5:56
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    $\begingroup$ Nominal prices are the same because they are fixed by a command economy (developers). Real prices will rise though as the value of goods depreciate. Inflation will show itself in other ways. And just because gold increases in a known way doesn't mean there won't be inflation. People knew the Zimbabwe government in the 1990s was printing absurd amounts of money, and look what happened to them. Price fixing didn't help either. $\endgroup$ Commented Dec 11, 2016 at 6:15
  • $\begingroup$ This happened to zimbabwe because the creation speed of money was > the creation speed of goods. If both had the same creation curves eg both goods and money were an ascending function and increased with the same proportion, then would inflation be possible? $\endgroup$ Commented Dec 11, 2016 at 7:03
  • $\begingroup$ You're conflating two different effects. The supply of more goods as an exogenous shock to production will decrease prices and can offset price rises from money creation, yes. But increases in real productivity to create more goods is not exogenous to inflation in this case. The relationship between money creation and goods creation is not as straightforward as you make it out to be. Even if their increases were "proportional" as you say, there could still be inflation. $\endgroup$ Commented Dec 11, 2016 at 7:07