Everyone talking about cross server trading is missing a big consideration when talking about economy shocks and recoveries. This consideration is 1) who gets the negatives from the shocks, and 2) who gets the benefits from the recovery.
In this case, like with almost everything, the two groups are not the same. Servers like Epona will crumble rather quickly as almost all of their loot gets sold off world, as its value is higher overall than what it goes for on Epona, meanwhile servers like Arawn and Rosmerta that are super closed off will benefit heavily since gear will flow in at cheap prices.
In this, epona suffers, arawn and Rosmerta flourish. This is the issue; while yes benefits are seen in the long run, and yes they may be “net benefits,” which I would say all economic evidence would suggest otherwise, but suppose they are, the benefits will be going to servers/players that don’t need them and wiping out other servers/players from access to game gear.
That's purely speculative. I know from experience from the Dom server I play on that Dom players never buy gear with gold. Why would they when they can do so using their attendance? On servers where the majority of people are in a Dom clan, most would not buy gear from the market. It just doesn't make sense.
If Epona prices go up as u say (which are not cheap by any means for low tier eg and super expensive for top eg) then why would other servers see all that gear flow into there?
Your claim that Epona will crumble is completely unfounded.