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Thinking Complexity
Simon Fasel
01. Okt 2016 12:44 Uhr
Kapitel 2 › The exponential growth trap:
State debt and doubling time
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State debt and doubling time
In October 2015, Bloomberg.com published an alarming article about France’s growing debt entitled “Government Debt in France and Italy Swells to Euro-Era Highs”. France’s national debt at the end of 2015 was 2096.9 billion euros. It had grown at an average rate of 5.76% since 1995. Based on these numbers, how long will France’s national debt take to double in size?
Hint: Use the formula for doubling time.
A worked solution is in the references section.
Formula to estimate exponentional growth
0
0
x = 70/y
x= years
y = growth rate in %
in this example:
70/5,76 = 12,15 --> it will take 12,15 years to double in size the national debt of france. This means if the debt rises with the same rate in 2027 it will be approximately 4200 billion euros.
