Krugman on Interstellar Trade

While reading the comments over at Crooked Timber, I saw a link to one of our new Nobel Laureate Paul Krugman’s more insightful papers: The Theory of Interstellar Trade. The abstract reads:

This paper extends interplanetary trade theory 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 derived from economic theory, and two useless but true theorems are proved.

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2 thoughts on “Krugman on Interstellar Trade

  1. It is absolutely criminal that this paper was not included in the Nobel citation.

    I have to say, I was shocked. I thought that Krugman would have been considered both too young and too political to win the award. Then again, maybe those sneaky Scandinavians wanted to give one more raised finger to the Bush administration before it leaves office.

  2. I love the last sentence of Section I

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

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