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Taxing Losses: Economic Suicide or Shrewd Trade Policy?
- Journal of Interdisciplinary History
- The MIT Press
- Volume 33, Number 1, Summer 2002
- pp. 47-57
- Article
- Additional Information
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 Petras 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.