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Taxing losses: economic suicide or shrewd trade policy?

By J. S. Butler and Diana Weinhold

Abstract

The ancient Nabateans had an economic law that penalized those who diminished and rewarded those who increased the common property. Normally, such a law could reduce long-run growth, but the Nabateans flourished. In the context of their nearly pure trade economy, this law enhanced the city of Petra's ability to accumulate wealth by discouraging competitive price reductions (a strategic trade policy). Under general assumptions, the policy would also have penalized inefficient traders, reduced the number of traders, and increased aggregate saving

Topics: HC Economic History and Conditions
Publisher: MIT Press
Year: 2002
DOI identifier: 10.1162/00221950260029011
OAI identifier: oai:eprints.lse.ac.uk:18427
Provided by: LSE Research Online
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