Actually, the left/white zone is more vacuum and the right/red zone is less vacuum. The higher the vacuum while cruising, the higher the mpg.
I believe the economy gauge reads manifold vacuum directly, as in there's a vacuum hose that tees off the vacuum hose going to the transmission modulator.
A really uneducated guess would be that a solenoid or switching valve stays open too long then closes.
The manual talks about checking the vacuum hose for oil (that shouldn't be there). Could be that you have a leaking transmission modulator or something like that causing the faulty economy gauge readings.