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Just to point out the misconception most people have here, that quote does not imply that growth is not infinite. Take, for example, compound growth that grows
by saosebastiao 8y ago
Just to point out the misconception most people have here, that quote does not imply that growth is not infinite. Take, for example, compound growth that grows at a rate that declines over time asymptotically approaching 0%. That is infinite growth even if returns decline over time.
It isn't just a hypothetical exercise. This sort of relationship with returns over time is common in both economics and finance. I, for example, experience it as a futures trader. It's not uncommon for successful day traders who intentionally limit their trading capital to get returns averaging 1% per day. Those returns, however, are completely infeasible when talking about trading capital even on the small end of mutual funds. When your trading capital increases, it becomes much harder to grow at the same rate, and returns rates diminish greatly. But they still may have positive returns.
No economist I know of would ever presume that growth can happen without limit or diminishing returns. Reasonable economists will inevitably disagree on parameterization of their models though, which is entirely to be expected.
- nonbel 8y agoThe quote refers to the "process of growth", which I took to refer to the rate of growth rather than growth for an infinite amount of time.