Hacker News Reader

Comment by jdmichal | Hacker News Reader

Your comment was meant to be witty, but is actually just uninformed. Exponential growth is a well-defined mathematical concept [0] and distinct from other formulas of growth. And, to specifically address your comment, the exponent in exponential growth is time, so no you cannot just dismiss it as being "some exponent".

[0] https://en.wikipedia.org/wiki/Exponential_growth#Basic_formu...

View on HN

Physics is not financial economics.

I truly do not understand your argument. First, nothing in my comment alludes to physics, except for maybe the involvement of time, which I can assure you is very much a concept in financial economics.

Second, financial economics is in no way unfamiliar with exponential growth. For instance, the compounding interest formula:

    p-next = p-start * (1 - rate) ^ time

I'm not sure I get yours. Are you saying there is "nonexponential growth" ?

Of course there is non-exponential growth. Easiest counter-example is linear growth, or perhaps in the real world a steady paycheck:

    p-next = p-start + growth-amount * t

A steady paycheck is wage growth?

Indeed, I am missing something.

The formula implies constant wage, not wage growth. But it can model growth in savings. An example: I save $200 per week. I have $800 saved already. How much will I have saved in 3 weeks?

Of course not; it's wealth growth. To be fully explicit:

    wealth-next = wealth-now + wages * time

I am starting to think that you are being purposefully obtuse.

I think you mean "(1 + rate)"...

Yes, of course. Thanks for the correction. Looks like it's too late for me to edit the original.

Reply on news.ycombinator.com