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Tuesday, March 11, 2008

The Theory of Interstellar Trade

For those of you who are both economists and science geeks like me, you may find this gem worth reading. It's a paper Paul Krugman wrote (as a kind of diversion) way back when he was a lowly Assistant Professor at Yale. It's entitled "The theory of Interstellar Trade," and it addresses, among other things, the problem of determining discount rates for investment analysis of the investment in inventory during the long periods of transit between stars, particularly given the fact that, under the special theory of relativity, the length of the trip at nearly light speeds differs markedly depending on your frame of reference (i.e, standing here on earth or riding in the starship).

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