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Thinking Complexity

01 Jun 2016, 12:49 AM
Chapters 2 › Unit 2: State debt and doubling time View instructions Hide instructions

State debt and doubling time

There was a recent news report by Bloomberg.com on 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 has grown at an average rate of 5.76% since 1995. How long will it take to double in size?
www.bloomberg.com/news/articles/2015-10-23/government-debt-in-france-and-italy-swells-to-euro-era-highs

Hint: Use the formula for doubling time.

A worked solution is in the references section.

How long will it take for France’s national debt to double in size?

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Given the 5.76% average growth rate, and using the approximation formula for doubling time, it would take:

70/5.76% years

or approximately 12.15 years for France's national debt to double in size, assuming that the national debt continues to grow at the same average growth rate and that no other factors have a significant impact.

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