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A Theoretical Approach of Understanding the Impact of Arbitrage Process by Implementing Knowledge Economy by a Country

Comparative Advantage in the Knowledge Economy

ISBN: 978-1-80071-041-2, eISBN: 978-1-80071-040-5

Publication date: 8 June 2021

Abstract

The knowledge economy (KE) which provide for an alternative to production-based economy and brick and mortar economy has a tremendous opportunity. KE has emerged due to the advent of skill concentration in nation states. However, the traditional production economy provides individual arbitrage opportunity which acts as a sideline for growth of the economy. In the modern economy, the higher the ability to create an edge for price for the knowledge, the greater will be the ability of the nation state to create and arbitrage process. Any economy which is driven by an innovative education system, appreciates, and adopts knowledge is the one which becomes successful in the knowledge process and a developed KE. Information technology forms a major component of knowledge process but is not the entire gamete of knowledge. Hence, it should not be confused that KEs are information industry driven alone. This paper tries to develop a model to check whether KE has the ability to support arbitrage process. Here the probability rate of growth in GDP is taken as the key element for the purpose of solving the theoretical proposition. The result shows that there are positive probabilities of the KE in providing arbitrage premium for individual which can fire the growth of the economy.

Keywords

Citation

Dutta, A. and Sinha, M. (2021), "A Theoretical Approach of Understanding the Impact of Arbitrage Process by Implementing Knowledge Economy by a Country", Bhattacharyya, R. (Ed.) Comparative Advantage in the Knowledge Economy, Emerald Publishing Limited, Bingley, pp. 65-73. https://doi.org/10.1108/978-1-80071-040-520210006

Publisher

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Emerald Publishing Limited

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