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Comment by tosseraccount | Hacker News Reader

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.

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