I believe cstross's book Neptune's Brood is based on ideas from this paper.<p><a href="http://www.antipope.org/charlie/blog-static/2014/09/crib-sheet-neptunes-brood.html" rel="nofollow">http://www.antipope.org/charlie/blog-static/2014/09/crib-she...</a><p>Which is funny, considering older Krugman's a fan of Stross's other book series The Merchant Princes, which also tries to have a solid economic backbone.<p><a href="http://krugman.blogs.nytimes.com/2013/05/11/more-science-fiction-for-economists-seriously-time-wasting/" rel="nofollow">http://krugman.blogs.nytimes.com/2013/05/11/more-science-fic...</a>
This is by Paul Krugman??!<p><a href="http://en.wikipedia.org/wiki/Paul_Krugman" rel="nofollow">http://en.wikipedia.org/wiki/Paul_Krugman</a><p>That this is written by a Nobel Prize winner and NYT columnist definitely makes it a bit more noteworthy.
Krugman loves science fiction. He said that he wanted to stydy psycohistory described in the Foundation series, but chose economics because it was the closest thing you can actually study.<p><a href="https://en.wikipedia.org/wiki/Psychohistory_%28fictional%29" rel="nofollow">https://en.wikipedia.org/wiki/Psychohistory_%28fictional%29</a>
It seems to me that the scariest part of doing interstellar finance is the concern that the institutions that, say, enforce bonds (or otherwise give them meaning, I'm not sure of the mechanics) will disappear sometime during your round trip. A lot can happen in 50 years, much more in a 500 year interstellar round trip. I would expect interstellar trade to stick with "real" goods only for this reason.
Submitted multiple times before, but here's the only one I saw with comments, in case some finds something interesting.<p><a href="https://news.ycombinator.com/item?id=818706" rel="nofollow">https://news.ycombinator.com/item?id=818706</a>
See also Relativistic Statistical Arbitrage:
<a href="http://www.alexwg.org/publications/PhysRevE_82-056104.pdf" rel="nofollow">http://www.alexwg.org/publications/PhysRevE_82-056104.pdf</a>
Interesting. Krugman has said that he got interested in economics because it was the closest thing in reality to psychohistory as described in Asimov's Foundation series. Of course, any society capable of interstellar trade would be beyond scarcity and hence economics as we know it. But fun, nonetheless.
"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."
Did you know that if you took all the economists in the world and lined them up end to end, they'd still point in the wrong direction?<p>s/world/interstellar trade routes/
"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 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 traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved."<p>He goes on to say this work may have some galactic relevance and that the force is with him.
He's so funny and smart, and yet guys like him are one of the bigger obstacles on this planet to accumulating enough capital to finance space exploration. Makes you think...