There was a post the other day on Kill Ten Rats discussing MMO economy and the rampant inflation that seems inevitable in today's games.
The problems stems from the fact that you can't have an economy with an infinitely open source and sink for goods and gold. There needs to be some sort of a mostly-closed enviroment (though, of course, it's always wise to leave options open for outside manipulation in case things start going wrong). Those gold coins dont make themselves. For every stack of gold coins added to the world, there needs to be a chunk of gold ore or a gold goblet that was melted down to create those coins. For every sword that's made, a plowshare or something equivalent should be removed from the world. And, once the sword is made, it goes somewhere. Either into the hand of a player or an NPC.
NPC vendors shouldnt just buy everything a player owns and then toss the items into the limitless void. Items should either be available for resale to other players or NPCs, gathering dust in a storeroom (where it can later be retrieved or stolen) or be broken down and used to create other items.
The concept of a semi-closed self-sustaining economy goes hand in hand with the idea of Logical Loot. If Mobs are dropping gold coins and Gloves of God-Spanking from their butts, any attempt at an economy is immediately thrown out the window. Instead you have simply created a whack-a-mole vending machine with infinite resources, and a player economy that will end up suffering from a rampant level of inflation that makes post-war Germany seem like a stable system.
But monster drops arent the only key to creating such a system. The resource harvesting and crafting systems have to work together as well. If you're going to have unlimited harvestable resources, then there needs to be a throttle on them to keep players from constantly flooding the market. Practicing your crafting skills shouldnt result in a lot of useless bracers or other items (anyone remember walking through the woods in UO an finding piles of bookcases sitting around?)
I think that the concept of attempting to balance gold fountains against gold sinks has proven that it wont work effectively. So its time for MMO developers to start thinking in new directions if they want to avoid the uber-inflation that is rampant in pretty much every MMO. And the first step of that is creating a cause and effect, sensical, self-sustaining economic system. Not an easy task. But it is needed if we want to move beyond the amusement park ride type MMOs.