The effects of a dragon's treasure on the local economy

[VirgilCaine]

Probably similar to the effects of Mansa Musa's hajj on Egypt. People have lots of gold, but they still need just as much food and drink to live as before, as the essential goods do not commensurately increase, so the gold piece becomes temporarily devalued as goods and services become more and more expensive. Eventually, though, as the villagers realise that prices are too high at home and go out into the world where the market isn't flooded with gold and spend their gold to gain fantastic luxury (compared to their previous state of affairs), they will become more in balance with the rest of the world and the inflation will slowly end. It took years for Egypt's gold currency to recover from Mansa Musa.

This is a random guesstimation from someone who hasn't been formally trained in Econ though, so take it with a grain of salt.

That sounds reasonable enough for D&D.

Well it certainly depends on the type of campaign. It we're talking "standard" D&D, then just use the rules in the DMG for town asset limits. The PC's will be able to sell back as much as the town can absorb. By the book, D&D economy is pretty much non-existant IMO. What else are PC's supposed to do when they return to town with 28 longswords and 15 suits of chain mail?

Lets see... thats less than 1,500 gp of goods. But a market for them in the smaller towns would be hard to find...Take a few days to sell all of them.

But, in a city, they'd get sold quick, because people are there to snap up the half-price chainmail and longswords.

 

[Barak]

Err.. Donkey married the dragon. Shrek and donkey didn't kill her. If you're married, you should know that Donkey wouldn't get to do -anything- with the dragon's hoard, it would stay just where it was.

 

[John Morrow]

But, Donkey doesn't need treasure, so he might give it to Shrek and Fiona, who could, in turn, give it to the city of Far Far Away. Or it could even end up in Duloc.

My guess is that they are holding on to it to pay for their kids' college education. At current tuition increase reates, they'll need a dragon's hoard of gold to pay for it by the time they grow up.