Tag Archives: Paul Krugman

Nobel laureate Paul Krugman discusses interstellar trade

Recent recipient of the Nobel Memorial Prize in Economics Paul Krugman wrote a humorous academic paper on interstellar trade back in 1978:

This paper extends interplanetary trade to an interstellar setting. It is chiefly concerned with the following question: how should interest charges on goods in transit be computed when the goods travel at close to the speed of light?

This is a problem because the time taken in transit will appear less to an observer travelling with the goods than to a stationary observer. A solution is provided from economic theory, and two useless but true theorems are proved.

…

It should be noted that, while the subject of this paper is silly, the analysis actually does make sense.

This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics.

Beautiful. The paper itself is full of zingers and whatnot, and is well worth a read.

[via the FT and David Friedman’s blog][image from Gaetan Lee on flickr]