Bryan Caplan likes “trembling hand perfect” equilibriums, but identifies the concept as an obscure academic concept…and indeed it is. Then he offers a challenge:
My challenge for other econ bloggers: Name yours. What’s your favorite obscure-but-genuinely-enlightening academic economic concept?
The G-R Conditions of Wealth-Creating Economic Activity
- Irreversibility: All economic transactions that create value are thermodynamically irreversible.
- Entropy: All transactions that create value reduce entropy locally within the economy and increase entropy globally.
- Fitness: All transactions that create value produce goods/services that are fit for human purposes.