Words of Wisdom on D&D Economies

A few words of wisdom while I catch up on posts:

There is no question that the prices and costs of the game are based on inflationary economy, one where a sudden influx of silver and gold has driven everything well beyond its normal value. The reasoning behind this is simple. An active campaign will most certainly bring a steady flow of wealth into a base area, as adventurers come from successful trips into dungeon and wilderness. If the economy of the area is one which more accurately reflects that of medieval England, let us say, where coppers and silver coins are usual and a gold piece remarkable, such an influx of new money, even in copper and silver, would cause an inflationary spiral. This would necessitate you adjusting costs accordingly and then upping dungeon treasures somewhat to keep pace. If a near-maximum is assumed, then the economics of the area can remain relatively constant, and the DM will have to adjust costs only for things in demand or short supply - weapons, oil, holy water, men-at-arms, whatever.