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Sure there is, it's just effectively a zero interest debt instrument. Imagine that everyone is exchanging IOUs, instead of physical dollars.
by AaronFriel 9y ago
Sure there is, it's just effectively a zero interest debt instrument. Imagine that everyone is exchanging IOUs, instead of physical dollars.
- nazgul17 9y agoYou misunderstand. The parent meant that the amount is infinite, so the property that eventually every state will happen is no longer there.
- meric 9y agoWow, a mathematical explanation of how uncapped debt reduces wealth mobility.
- nandemo 9y agoYou're kidding, right? No way a generic observation about a markov chain (which doesn't even model interest) implies that "uncapped debt reduces wealth mobility".
- e12e 9y agoSo, with typical debt, interest rates are higher for debt than for savings. Does seem that a) removing the cap, and b) introducing interest on savings < debt would trap some people in poverty?
- barrkel 9y agoIOUs are money, in a model this simple.