The “tourist” is completely irrelevant. Inside this closed system of the town, the debt was all equal and transferable. They could have settled all debts by meeting in a room and figuring it out.
This is not a microcosm of the real world that leftists like to think it is.
“This is not a microcosm of the real world that leftists like to think it is.”
Boy. You got that right. I read Krugman’s book with his example of the baby sitting service and the paper money which he then inflated to stimulate circulation. What a crock. It assumes people do not alter behavior beyond buy and sell, that no one could change or improve a service. The model was only of service economy not a capital producing economy, no one could do anything significant to alter their situation, just to name a few of the many flaws. How people can read this guy is beyond me.