The other way to fix a broken economy is to simply make the game about something else. We've all become desensitized to it and just accept it as the norm, but there ARE alternatives to killing and looting for a living. I always find it very odd that in most RPGs shopkeepers are completely willing to buy an endless torrent of obviously stolen arms and miscellaneous crap--why don't they get suspicious after your character has brought in his seventh load of bloodstained broadswords and hole-riddled armor? I know I would have a problem buying goods from somebody if I suspected they had killed the previous owner, stripped their corpse naked, brought the stuff to my establishment, and are now arguing with me for a higher price. I also find it weird that blacksmiths are willing to build up an inventory of 50 or more broadswords when it's clear that my character is the only one who frequents their shop--50 broadswords would probably last them for 20 years!
The problem with building a realistic economy is that realistic economics is not very exciting--it can be interesting, but it does not really go well with fantasy action. Money sinks, like paying taxes, buying food, paying for lodgings, buying clothing, etc, are a definite possibility, but if you use them to the degree that you have to in order to achieve realistic economic control you've basically just created a computer version of everyone's depressing real life. I suppose you could build in some kind of "lifestyle slider," where you could decide how well your character lives (if they tend to splurge on food, clothing, and lodgings, or if they live a minimal and spartan existence--you could even tie it into things like health and illness, kind of like how in the old Oregon Trail game you could decide how big your meals would be and that would affect the frequency of illness in your party!), and the setting you chose would affect how much money was bled away over time. But take a game like Oblivion--its about gods, dragons, and epic heroics! If you follow the core quest your very first adventure takes you through the gates of Hell! Why do you have to mix in mundane day-to-day finances?
Personally, I would like to see more games where you don't have to worry about looting and buying and selling gear and all that. I think it's materialistic and rather sociopathic, and games that don't bother with it usually feel a lot less cluttered, in my opinion. There are plenty of reasons why a person could plausibly not loot a defeated foe--perhaps it is considered intensely dishonorable? Perhaps the world has superstitions about it--I've heard of a lot of cultures where taking things from the dead is horribly bad luck, allowing their spirits to haunt you and torment you. There are cultures where you have some attachment to your equipment as well--warriors the world over often regard their weapons and armor as sacred, and would not think of simply swapping them out with those of the guy they just murdered!
I'm just saying that there are other ways to make an RPG than the whole kill->loot->level->kill more->loot more->level more model. I would like to see some other ways, because I think that model is getting rather boring.