4 ms·
That's fair, it actually has nothing to do with money. It's just saying that if $IN is more efficiently converted to $OUT, more $IN will be consumed. The orig
by dguest 2mo ago
That's fair, it actually has nothing to do with money.
It's just saying that if $IN is more efficiently converted to $OUT, more $IN will be consumed.
The original paradox was $IN = coal and $OUT = work, i.e. more efficient coal use increased coal use.
With prices you have $IN = cash and $OUT = product: more efficient conversion of your cash to products can increase cash use.
I was using this special case, but indeed the more general case doesn't have to involve cash at all.