I'm Back... for a WoW Recession?

I'm Back.

Hey guys. To all 6 of you that will read this I hope you had a good holiday.

I'm going to start writing here at this blog again as well as The WoW Economist. I feel like this is a better forum to write stuff that would be less interesting to mainstream readers. I'm going to continue my other work, but my main focus is still using my ramblings for the basis of a paper on virtual economies.

I think most of the discussions about inflation and deflation are way off. What is especially strange is the discussion of recession in WoW. According to wikipedia, a recession is " a significant decline in economic activity spread across the economy lasting more than a few months, normally visible in real GDP growth, real personal income...(etc.)" That's of course an abbreviated definition, but it is the part that is germane to our discussion. It is my opinion that we don't have the tools to accurately measure economic activity so the term can't be used to describe our situation. Most economic activity doesn't take place in the market. In that respect, the wow economy is like a third world country. Familial ties and bartering are far more common than market activity. I provide my goat's milk to my cousin and he provides me with eggs. Or my neighbor trades me eggs from his chickens for cheese. Blizzard is able to monitor all of these transactions. They are the ultimate Big Brother. But we don't have the tools.

The Goblin disagrees, but it isn't the first time, and won't be the last. I think it may just be a difference of terminology rather than a difference in ideas.

Either way the deflation discussion is premature. Perhaps inflationary pressures won't be what I thought, but there will a higher price level than in the Burning Crusade. Prices were extremely high after launch which is normal but not sustainable for most goods. Now prices are plunging with buyers not around during the holidays and those willing to pay the premium already have what they need in many markets.

Overall equilibrium prices will be higher. Enchanting prices on my realm will be much higher, because I have the resources to make it so. It is a buyers market right now, and those of us with the resources should still be stocking up.