The Currency of Kids

but the problem is the one you already mentioned earlier - abstracting the value of goods/items to being represented by paper money that causes the difficulty I think.

I agree. Which is why introducing the concept of paper money is too difficult. Keeping the language in the currency of what kids use -- whatever that may be for an English girl -- is probably the key.

Here's one possible approach. Imagine K and her friends collected and traded music CD's. Let's say K had a popular new CD and her friends really wanted it. They wanted it so bad they would be willing to trade five of their other CDs for it.

Now imagine you fired up your CD burner and burned hundreds of copies of that CD. Would K's friends still be willing to trade at five CD's per one of the new CD? Or would the flood of copies of the CD drop the value? My guess is soon her friends would see K with all her copies of the new CD and say, "Hey! I'm not going to trade 5-for-1 any more. You have so many of those I won't even trade 1-for-1 any more."

Just a thought.