4 ms·

I thought I did, and I would see the fixed frame of the distant stars as a "slowest timeframe," although I suppose there is obviously a slower one. Is that what

I thought I did, and I would see the fixed frame of the distant stars as a "slowest timeframe," although I suppose there is obviously a slower one. Is that what you meant, or am I missing something entirely? Give us a clue!

gwern 16y ago
No, it has to be the slowest timeframe with actors/agents/people in it, because they're the ones who are setting limits on what interest can be by being the most productive. Let's take an example - imagine our slowest timeframe is at X and our fastest timeframe Y is dilated to 1/10 of X. And let's say the current ROIs per man-year in X are at 3% (it's a mature well-developed economy, the home planet) but ROIs in Y are an amazing 20% per man-year. X bankers will still prefer to lend to Xers rather than Yers. Imagine they lend to a Yer. 10 X years later (1 Y year later), Yer repays the loan with 20% interest. Great. But imagine they had lent to a Xer. 10 years later, the Xer repays the loan with 34.39% in interest! (3% compounded annually.) And the exact same logic applies if the banker lives in Y. Xers are still better investments. A Y banker loans to an Xer for 1 Y year, and a year later gets the loan back with 34.39% interest, as compared to the best his fellow Yers can do, which is just 20% per year. So interest rates need to scale with the dilation. If they scale too little, then all money will flow to the slowest timeframe. If they scale too much, the money flows to the fastest timeframe. Modulo the cost of moving between timeframes. (Imagine if Yers got returns of 40% per Y year/per 10 X years. Then X bankers would be clamoring to lend to Yers.)
btilly 16y ago
Clue: in the special theory of relativity, every inertial frame of reference sees itself as the slowest frame of reference. Therefore there is no unique slowest frame of reference.

4 ms·

I thought I did, and I would see the fixed frame of the distant stars as a "slowest timeframe," although I suppose there is obviously a slower one. Is that what

by Robin_Message 16y ago

gwern 16y ago
No, it has to be the slowest timeframe with actors/agents/people in it, because they're the ones who are setting limits on what interest can be by being the most productive. Let's take an example - imagine our slowest timeframe is at X and our fastest timeframe Y is dilated to 1/10 of X. And let's say the current ROIs per man-year in X are at 3% (it's a mature well-developed economy, the home planet) but ROIs in Y are an amazing 20% per man-year. X bankers will still prefer to lend to Xers rather than Yers. Imagine they lend to a Yer. 10 X years later (1 Y year later), Yer repays the loan with 20% interest. Great. But imagine they had lent to a Xer. 10 years later, the Xer repays the loan with 34.39% in interest! (3% compounded annually.) And the exact same logic applies if the banker lives in Y. Xers are still better investments. A Y banker loans to an Xer for 1 Y year, and a year later gets the loan back with 34.39% interest, as compared to the best his fellow Yers can do, which is just 20% per year. So interest rates need to scale with the dilation. If they scale too little, then all money will flow to the slowest timeframe. If they scale too much, the money flows to the fastest timeframe. Modulo the cost of moving between timeframes. (Imagine if Yers got returns of 40% per Y year/per 10 X years. Then X bankers would be clamoring to lend to Yers.)
btilly 16y ago
Clue: in the special theory of relativity, every inertial frame of reference sees itself as the slowest frame of reference. Therefore there is no unique slowest frame of reference.