Saturday, November 24, 2007
The World in 2008
Posted by David Smith at 02:30 PM
Category: Thoughts and responses

wolrdin2.jpg

The Economist has very kindly put its annual crystal ball gazing exercise online. It includes fairly gloomy assessment of the UK and US outlooks as well as a special section on China and the usual mix of the quirky and authoritative. It can be accessed here.

Comments

David, hello again,

I am very intrigued by this article that I found, following your link, to 'The World in 2008':

http://www.economist.com/theworldin/business/displayStory.cfm?story_id=10094757&d=2008

It discusses the likelihood and long-term effects of the diminishing cost rates that relate to technology's development and practice. Somehow I get the feeling that the impact of this could be immense.

Can you think of an area of traditional economics that would typically deal with a situation such as this? What is your opinion on it?

(I will fully understand if it is not something you find time to deal with, what with Oil, Credit, and the UK Economy playing up like they are...)

Thanks,

Fiv

Posted by: Fiv at November 26, 2007 05:38 PM

The internet is an extreme version of several fairly familiar ideas in economics. So, economies of scale reduces costs, as does technical progress, as does competition. Think of the relative cost, in a related area, of telecommunications. Alexander Graham Bell thought there would be just a single telephone in every American city and, presumably, that phones would be the preserve only of the extremely rich.

Posted by: David Smith at November 26, 2007 06:07 PM