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THE THEORY OF INTERSTELLAR TRADE

Authors

  • PAUL KRUGMAN

    1. Krugman: Professor, Woodrow Wilson School, Princeton University, Princeton, NJ 08544-1013. Phone 609-258-1548, Fax 609-258-0019, E-mail pkrugman@princeton.edu
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      This research was supported by a grant from the Committee to Re-Elect William Proxmire. This article is adapted with minor changes from a manuscript written in July 1978.


Abstract

This article 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 traveling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved. (JEL F10, F30)

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