09-03-2007, 04:07 AM
Quote:For a given amount of products, if money is flowing in and not out, then all you have is inflation. If you're buying products with them from outside, then money is flowing out. If you could have increased production locally with the money, then what you had was a shortage of cash, and the sensible thing to do would be to save money anyway
Even on a local scale, closed economies only seem like a good idea. They aren't really.
-Jester
You are forgetting that goods may still flow in and out. A net gain of money in the closed economy could mean that the money will be hoarded, and hence devalued... Or spent on purchasing more goods, bringing in more wealth into the community.
As opposed to that net surplus of money leaving that community, and getting spent by other people on purchasing goods for themselves, I'm not quite sure there's only a 'seeming'.