There is a simple way to "solve" the Wall of Iron "problem".
Assume that most people in the world know about it and already use it.
Yes. It's based on wahoo. Therefore it's completely busted when it comes to governing mundane economic activity. Also, it produces too many chickens...Now, I seem to recall that there's some problems with 3e's economic model.
Here's what I'd do, in order to save myself a lot of work and potential migraines... talk to your players out-of-game and establish some ground rules. Tell them the town sounds like a great idea, but you're willing to run an economic simulation based around the D&D rules, which were never intended to be used that way. Their town's economy will run more-or-less like the real world, at lleast as far as you understand it. They are free to use their fancy powers to gain advantages, but not game-breaking ones, and "game-breaking" will be defined as anything you can't handle. Instead of banning things outright --and going through an extended vetting process-- say 'yes', with the caveat that they'll agree to work with you if (when) problems arise.What do I need to prepare for?
At some point, my campaign's player might* start a community. Now, I seem to recall that there's some problems with 3e's economic model. What do I need to prepare for? Is the problem largely with the craft and profession skills or with the town creation rules? Or is it that it doesn't work for import/export economies and is insensitive to supply and demand? Any help here would be much appreciated.
they could exploit the Wall of Iron issue just as easily either way.
Use this as a reason to import the 4E "mundane stuff sells for 1/5th, if at all" rule.As I (kinda) said above, just assume that all the obvious magical-economical exploits are already being used by other NPCs and a normal part of the economy.