The issue with the economy is that items are generated, but not taken out of the game.
The exception being retired items people are holding onto, but those aren't circulating the economy, so they're essentially out of the picture until such time as someone decides to get rid of them.
The only real way to fix it, is to make a rewarding item sink. And by rewarding I don't mean giving someone NP. People want rare items, even if they have to give up hundreds of less rare stuff to get it.