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In Chinese folklore the dead live in a society much like our own while waiting for reincarnation. One notable exception is that that the government is that of the Yama Kings.

The living can send their ancestors all kind of things (food, clothes, house, money) by burning the paper model of those things.

However, the living burn a lot of fake money - more so than food, clothes or houses - and according to folk belief the dead can get hungry if none of their descendant burn any food. So anyone who died without descendants, or who becomes forgotten will most likely go hungry.

Assume
- There is trade in the after-world
- The goods from descendant go directly to the receiver
- The after world is like a mirror to the real world: all type of building, machine, factory, land, farm... exist, but all of them belong to Yama king, who lend them to the population like a feudal lord.
- All material in after world is one time use like real world material, except land do not get poorer.
- A real world tree is correspondent to a after world tree: if the real tree is cut down and turn into a plank, the tree in after world is also turn into a plank and can be use by a mirror machine by a ghost, but if a ghost cut the mirror tree before the real tree is cut, the mirror tree and real tree no longer have any link.
- No animal ghost.
- The dead might provide services such as protecting the living, working for the Yama Kings, etc.

Edit:
- Let 's say that the dead wait for about a quarter of their life span for reincarnation or ascend to higher plane (or lower plane). So a child only stay there for some year, while the old wait for decades.
- Their spirit body is like a healthy human for their age. No wound or bad body part, only old body part. No sickness, too.
- The dead can learn, and they have feeling, too. So they fell tired after work for a while. Although they can work more, the feeling accumulate further until it became unbearable and they stop the work.
Please answer:
- If they continue to use the money sent by descendant, will there be great inflation?
- Are they going to use that as money, or use other things as money?

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  • $\begingroup$ They can use their unfulfilled wishes as currency. $\endgroup$ – Javert Mar 11 '16 at 15:36
  • $\begingroup$ So what's the question? $\endgroup$ – AndreiROM Mar 11 '16 at 15:41
  • $\begingroup$ @AndreiROM There is "what will be the state of the economy." somewhat buried in the post. That seems rather broad though. DTN, you should at the very least edit your question to focus on some specific aspect. Also, as it stands, this looks like it might be off topic for us since there is no clear worldbuilding (that is, building your own world) component to your question. It might possibly be a better fit on Philosophy. If you want the question migrated, you should "flag" it for moderator attention and request migration; do not simply repost it on another site in the SE network. $\endgroup$ – a CVn Mar 11 '16 at 15:48
  • $\begingroup$ I edited the question and assumption. Can the mods check it again for me. $\endgroup$ – DTN Mar 11 '16 at 20:20
  • $\begingroup$ The question is currently in the reopen review queue. $\endgroup$ – a CVn Mar 11 '16 at 22:44
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Your question made me curious about chinese religions and the afterlife in chinese folklore. I've read a lot about it, and what I can say without any doubt is that there is a lot of different interpretations. I was asking myself, why exactly would the living offer money to their ancestors? I've came across two different reasons (I bet there exist more) :

  • Going through hell

I found this website the following information :

Other ideas of afterlife were influenced by the Buddhist cosmology of Heaven and hell – the Chinese version of heaven and hell mirrored the bureaucracy of the worldly ruling power with heaven being represented as the wonderful court of the Jade Emperor and hell being represented as the horrible prisons where one was punished by cruel jailers and could possibly get out sooner than one’s sentence required by bribing the guards – hence the practice of sending “spirit money” with the deceased to help with one’s life in the next world. Of course, Buddhist influence also meant that heaven and hell were not permanent places.

The spirit money is used to bribe the guards of hell and suffer less torments. Who would want their family to suffer? In this case the living could burn just enough money to bride the guards. There should be no inflation unless there is a sort of competition between the dead.

(The next point may be the following events after going through hell.)

  • Persuading the gods

I found on this website that after death, your dead ancestors could live in the spirit world with the gods. In this world, the gods have the ability to influence the world of the living. Sending money to your ancestors would ease their task of influencing the gods to bring good luck on your family.

Assuming this is true and the gods powers are real, every family would burn all the fake money they could. Now, depending on how the gods are, the price of "good luck" could rise. More people with more money means more demands. If the gods can supply enough good luck to everyone (and have enough time to do so), the price won't rise. Else, if the gods are not everywhere at anytime, they would only accept the biggest offerings and thus, increase their prices.

(There exist a slight variant where ancestors become gods of the Underworld and bring good or bad luck in exchange of offerings. In this case, more money could also mean less need to word and more "free time" for good luck wishes.)

Conclusion : Creating money make it lost its value. Will there be great inflation? Yes! And no... It depends on which version of the chinese folklore you are willing to trust.

To answer your second question, there also could be bartering with the different objects offered by the living. Even though there tend to be less bartering in a society with money.

EDIT : How could the gods spend their money? I didn't find anything about the gods shopping habit. Sorry, the next part will only be speculations.

First, we must know what gods really want. Gods being gods, I don't think they will care about "material goods" that you and me buy at the grocery store. What do gods want? Power! And by power I mean spiritual energy. In several religions, the power of a god depend on how many people worship him. Prayers, sacrifice and offering giving empowering the gods. In the links that I used for this answer, they do not talk about "money", but "spiritual money". This spiritual money could simply be a materialization of power in the Underworld. It could actually means that the gods don't spend their money! They keep it, after all it's the amount of spiritual money they have that increase their powers.

Now with the notion of "amount of power", this could explain the increase in the gods prices for granting wishes and benedictions. The most powerful god with the biggest amount of power (and though the best "good luck" you could get as a living) could sell his services for more than another god less powerful. The economy would stay the same as earlier for the ancerstors of the living. Moreover, the living wanting to get the best benediction, they would burn even more spiritual money.

(Keep in mind that this Edit is only my speculations. I hope it will help)

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  • $\begingroup$ Now I realize how much my idea of Chinese afterlife is wrong. But then I think a normal person do not care much: fulfill his duty and his ancestor will give him fortune. $\endgroup$ – DTN Mar 17 '16 at 17:17
  • $\begingroup$ I think my idea of afterlife is somewhere in between the two interpretation: the dead wait for reincarnation, but they can also affect the life of the living. But I image that the dead can directly affect the living without bothering the gods (curse or haunt, for example). $\endgroup$ – DTN Mar 17 '16 at 17:21
  • $\begingroup$ Ah, but in your link, I didn't find anything about how the gods (or hell wardens) using the money they receive. If they receive too much without any actual use, won't they stop receiving? Can you please speculate about the "true use" of the fake money (spirit money) and add it to the asnwer, too? $\endgroup$ – DTN Mar 17 '16 at 17:24
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It's a mess

First problem is that there are 15 dead people for every living person. That's a lot of ancestors for each person to feed, but most of them aren't ancestors, they're children who never made it out of childhood.

Reducing the amount of time people stay in the afterworld to 1/4 of their lifespan takes the population there down to 1/4 of the living population.

If everything "given" by their descendants remains after they depart (perhaps there's a family house there as well as here), there's a limit to how much further raw material is needed. It could well be that there are acres of empty houses and all the children are at least able to find somewhere to live. However this situation still leads to massive cash inflation as there's no government steadily removing currency from circulation as new currency is "printed".

If everything given to a specific person fades away as they move on then at least the cash flow problems are solved. However the stray child problem returns, their time in the afterworld is really going to suck until they get reincarnated.

Everything else seems to be a relatively "normal" feudal economy, i.e. not somewhere you want to be as a modern western person. Life is short and nasty with lots of hunger.

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  • $\begingroup$ Thank you for your information. I add the detail about their time in the after world. Also, the dead can work and grow their own food with the mirror farm from Yama kings, or they go to the supermarket and raid the storehouse. Can you consider changing your answer with new detail? $\endgroup$ – DTN Mar 16 '16 at 15:56
  • $\begingroup$ @DTN unfortunately what you're asking for here is a full blown economic model which is a bit much for me. $\endgroup$ – Separatrix Mar 23 '16 at 9:59

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