Friday, May 21, 2004
Economies of scale, as it turns out...
Russ Roberts of Cafe Hayek offers an answer to the Kling-Cowen discussion on Hotelling-Simon puzzle. Kling follows Hotelling ("oil prices rise at the rate of interest"). Cowen rises the Simon's finding ("natural resources get cheaper over time in real terms"). Roberts reconcile the two with "creativity and innovation". His coblogger, Don Boudreaux, on the other hand, invites us to think of mosquito sucking on a balloon of blood. It's the size of the balloon that matters. But we don't know for sure how much blood the balloon has.
Posted by Aco at 3:04:00 AM