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The view from Carleton College's physics department

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Relativistic economics

Posted by Arjendu on March 12, 2008

While posting the relativistic poems and songs, I was delighted to find Tyler Cowen’s blog post on the effects of including relativistic effects in economic analysis. Specifically, for example, you could deposit a little bit of money in a high-yield savings account, and then blast off for a round trip at high speeds and come back to find lots of money in there while you are still young enough to enjoy it (due to time-dilation effects). This means that the interest rates applicable cannot be such that it is profitable to do so.

A completely tongue-in-cheek hypothetical scenario, of course, but hey. If quantum mechanics could turn computer science on its head — in terms of setting limits (‘information is physical’), there’s no reason why relativity couldn’t set some  limits for economics (‘utility is physical ?’). Enjoy!

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