Economics is the one thing I have only ever seen one game do in a way that made any sense. Eve actually based a good potion of its economy on the actual gathering of resources, but still has many shortcomings. The mistake the vast majority of games make is that their economy is based around the killing of monsters. Basically, most of the money in game worlds comes from monsters which spawn regularly in their respective locations. The reason this is silly is because it instantly sets the game up for hyperinflation. Usually, money is either based on a real desired commodity (like gold, which has value because it is usable, pretty, and does not become corroded), or a currency issued by a government which is "backed" by real desired commodities. So, you either go get the stuff directly, by digging it from the ground, or in more sophisticated systems, a central government mints currency and promises a given return on its use.
In most online economies, this process is replaced by the rather backwards process of money actually deriving from monsters. If you want money, you have to go kill stuff. Economies then later pop up extracting the gold that is produced in this way. In essence, this isnt much different than mining (instead of digging gold from the ground, you are digging it out of the pouch of some poor innocent Orc family that you put to the sword). The primary problem is that the flow of money is uncontrolled, the actual amount you extract doesnt make much sense, and the money you are extracting does not share qualities with something like gold, because you cant melt it down and reuse it for other purposes. Thus, Gold is not inherently valuable to anyone in a MMORPG, if it were not for the fact that you could use it with NPCs.
INdeed, the only thing that gives gold value in MMORPGS is that you can always seem to trade it with NPC shopkeeps for something that has an in game value, be it armour, weapons, or cloth for a craft. Thus gold has a value only indirectly because it has been given artificial value by the game designers, via NPCs.
I think this solution is inelegant, unnecessary, and ultimately, pretty boring. In my opinion the entire world economy should be player based. This means that all value will be player determined, based on player perceptions of scarcity, supply and demand and utility, much like a real world economy. For this to work, you need a few things.
First, you need extraction. There has to be some way for players to get stuff from the environment. If they want iron, they have to mine for it, smelt it, and turn it into ingots, which can be used to make other stuff. If they want gold, they have to do likewise. If they want leather armor, they need to kill an animal, skin it, tan the hide, and work it into a useable form. And so it should go for all stuff that players can make and use in the game, except for a limited and controlled set of "world items" which should be distributed to individual monsters and the like, but which should not be respawning items in my opinion.
This again creates a dynamic form of player interaction. Indeed, to get ost anything, this system will force you to interact with other people. You want a set of armor, you need to know an armorer, who needs to know a blacksmith, who needs to know a miner, who needs to hire protection for his caravan, which happens to be you, the guy who is buying some armor! Everyone becomes interdependent. You cant just fly to some NPC and throw down a set amount of gold every time for the same item, without error. Prices will fluctuate with demand and availability. Wars will determine the cost of bread. The trades made behind the scenes can reshape empires. The lowly trader can make or break a king without ever lifting a sword. This opens up a whole new realm of player interaction that is absent in most MMORPGs, and makes every crafter relevant, and makes it a legitimate game influencing profession in its own right, without forcing them into PVP.