Tuesday, December 27, 2011

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview

Professor Michael Hudson discusses the mathematics of debt accumulation:


Economic writers in earlier times were more ready than their modern counterparts to confront the problem of debts growing so large as to be unpayable. In The Wealth of Nations (V, iii), Adam Smith observed that “Bankruptcy is always the end of great accumulation of debt. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by a bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretended payment.”

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