Economics in TTRPGs

 BASICS

An economy is a closed system where goods and services are produced and traded. For instance, the local economy of your town, the regional economy of the Mediterranean, the global economy of Earth, or hypothetically the galactic economy the Milky Way. How well or how poorly people are living (called the standard of living) within an economy depends on production. Production means what people can make and how much of it they can make. People have to make stuff to trade stuff, and they have to trade stuff to have other stuff.

COST OF LIVING

If the average person in your setting earns a wage of 5 Silver Pieces per day, then the cost of food, water, and shelter should total less than that. Otherwise, no one buys anything because they can't afford to, and so no one will earn anything because nothing is being bought, and the economy doesn't work.

SUPPLY AND DEMAND

If there is a market demand for a product or service, then the market will find a way to supply it. If there's no market demand for something, there will be no market supply. Do you really think the that the average person needs healing potions? Not if the average person earns 5 silver pieces per day, and the cost of a healing potion is 50 gold pieces. This means alchemists and alchemists with work are extremely rare.

SILVER OR GOLD?

Your setting's currency system ought to have a silver standard rather than a gold standard. At the time of writing this, an ounce of silver is worth $30.00, and an ounce of gold is worth $2,466.00. That means that the value of gold is 82 times that of silver. If a gold piece is a US dollar, then a silver piece is a coin with a value of 1.25 cents, not the neat 1 to 10 conversion rates given in your TTRPG book. Values are based on SCARCITY. Food, water, and shelter are much more common than gold. Would you trade a $10 silver coin for a cheeseburger or an $820 gold coin? Only merchants and nobles use gold coins.

FIXING THE ECONOMY IN YOUR TTRPG

Whatever you do with money in your TTRPG, don't worry about it feeling realistic, just worry about it being simple and feeling fair to the players. If possible, big IF, you want players to be able to develop an intuitive understanding of the value of a silver or gold piece in-setting, similar to how they might have an appreciation for the value of a dollar. Apply some basic principles of economics to your setting. Healing Potions are not a common household item like cough medicine. Common household objects, meals, and stays at the traveler's lodge don't cost 1 whole gp. Emphasize that people make a lot of their own stuff.