Nature of Competition: Arbitragers and the Government 02
Blessed, we do not only have frictions in the physical world but also transaction costs in the economic world. Otherwise, a lot of celebs, with or without a Nobel from Stockholm , would surely lose the job and be rostered as “unemployed,” among other collateral damages. Die Welt ohne Reibung . Which would you prefer, Rocky Mountains or Tower of London Ice Rink . Depending upon the answer, we can tell who you are. Next on: Which would be in the longer run, the mountain climbing or the skating? “Rational people think at the margin” (borrowed from Gregory Mankiw ) and would “unanimously” answer that the climbing is in the long run as opposed to the skating for the short run. (Many many a year ago in a city by the sea, there was an op-ed to the effect that Gregory Mankiw appears to be trading a potential Nobel Prize for actual writing of textbooks. By design, humans prefer real to nominal. ) ...