The "Parallel" Economy
As we embarked on 清明节to provide offering to our ancestors/loved ones who had passed on, I was wondering what would be the economy of the hade/hell/underworld (for this entry, I would just be using "hell" as I find it easiest to type) be like?
Let us make a few assumptions.
1. All offering can be delivered to the designated recepients as much as possible (as long as it does not upset the econ. balance)
2. All "residents" receive offering.
3. Offering can be received constantly though it reaches the peak during the Hungry Ghost's Festival and of course 清明节.
Here are some probably phenomenons (pardon me if I get the Econ wrong, after all I didn't take A level econ...)
Let us make a few assumptions.
1. All offering can be delivered to the designated recepients as much as possible (as long as it does not upset the econ. balance)
2. All "residents" receive offering.
3. Offering can be received constantly though it reaches the peak during the Hungry Ghost's Festival and of course 清明节.
Here are some probably phenomenons (pardon me if I get the Econ wrong, after all I didn't take A level econ...)
- There's significant hyperinflation that puts Zimbabwe to shame, due to the constant influx of great amount of cash. This is evident by the stacks upon stacks of billion/trillion dollars note that we burned for our loved ones. This will obviously pushed up commodity price and I think it's likely that "residents" will use commodity like say gold/silver etc. which were not used as offering as extensively as a medium of exchange. Strangely, this is a trend predicted by Jim Roger of the real world where he believes that actual currency will become obsolete.
- "Capital control" would be imposed probably limiting the amount of cash each can receive during the 2 "offering periods", in order to ease the hyperinflation as mentioned above. To circumvent this, it is likely there's widespread corruption between the "residents" and the official.
- Due to the sheer amount of offering, hell will accumulate significant current account surplus (impossible to get our money back...) so it's likely to set up a "sovereign wealth fund" to optimize the rate of return.
- Since you can't die again, it's likely that there's a big problem of moral hazard. On the other hand, since ur dead for all eternity (depending on ur belief/religion), maybe you will really be forced to think long-term which is probably good in the long run....
- Due to the influx of offering, it's likely that the economy never develop beyond barter trade. There would be negligible incentive for innovation since there's always new "paper ipod", "paper ipad" being "offered". Moreover, what's the point of earning money when u already had so much?
- There's probably a "Hell Central Bank" (HCB) to formulate monetary policy perhaps chaired by Keynes/Adam Smith. To solve the problem of both point 1 and the previous point abt the negligible incentive, it's likely that they introduced 2 currency which are both legal tender concurrently. Each person is entitled to use x amt of "offered currency" beyond which the money would be rendered void while there's no upper limit on hell's issued "devil currency". Purpose? Promote normal econ. development and don't rely on such "remittance" that much.
- Speculation and bubble is probably much more frequent and traumatic. As everyone had so much money (assuming HCB don't implement the solution proposed in the previous point), not many would bother working and were likely to speculate blah blah. This is likely to cause periodic financial crisis since most would know nuts about investing.
- Wages/labour is likely to be much more expensive because nobody would bother to work...so "foreign worker" is likely to be in high demand. It is likely that to fulfill the greater aim of controlling inflation, hefty worker's levy would be imposed.