A lot of pokemoney has indeed been purged from the economy, which I consider a step in the right direction for more economic stability, but I still believe there is a problem with an unbalanced coefficient between the amount of pokemoney and pokemon in circulation; as money can be invested or depleted by either purchasing it on commodities/services in-game/on the token store (or by certain bug-abuse attempts levying a player's pokemoney as a penalty), the increasing supply of Pokemon is mainly only allocated (by trading it from one account to another), but not purged; they're only suspended if one firmly goes inactive (barring those who give Pokemon to others before leaving) or banned. Even in the case of a banned a banned account, illegitimately obtained Pokemon may still cause harm to the economy, as Boora stated, if already put into circulation.
With all that currently underlies this economy, I believe there will always be an abundant amount of Pokemon, despite the future additions of money sinkholes to the economy. However, I also believe there should be more methods for one to generate Pokemon rather than selling Pokemon. Previously, players often needed luck to obtain a shiny or Horribly Rare pokemon to leap into the market, which is a gap between newbies and the norm that I found unreasonable. It is not nearly as bad now in my opinion, but there still are a few too many Pokemon that aren't negotiable without token trading - mainly shiny rares/VRs/HRs that have good battle potential (which should hopefully not be as bad when there are more secure and practical means of obtaining tokens, such as in the trading center in the forthcoming playerdex update).
Although the auction house may facilitate trade transactions between players, I believe prices will still fluctuate easily, due to the fundamental economic dynamics already explained (rarity changes, updates to the battle system that alter battle potential, reduction of pokemoney in the economy, etc...). It will be good to have more economic guidance on the auction house, however.