Life is not in an equilibrium
Much of economics is built upon the idea of equilibrium: supply equals demand, and if there are opportunities to drive down price to equilibrium, they will immediately be taken. Economists assume this because it is hard to predictions otherwise. Important assumption though this is, this can be hard to empirically test; all such tests are necessarily indirect approximations. So what happens when you have a virtual economy and can empirically test this? Well, it turns out that the economy is frequently out of equilibrium:
The data makes it look like external shocks take you out of equilibrium (unsurprisingly) and that equilibrium returns fairly quickly. But just look at how often the economy is out of equilibrium! It’s all the bloody time! It almost looks like instead of a fixed point we’ve got a limit cycle with varying amplitude. This shouldn’t be a surprise, but it is nice to get real data. Next the question is: which are the equilibrium and which are the non-equilibrium situations, how often do they each occur, and how big are the differences between markets?