The magic of compound interest?

Abstract

The long-term effects of compound interest are uncertain. Circumstances such as economic growth, catastrophic risk, and the solvency of nancial systems can influence the real rate of return on investments. Some argue that long-term savings eventually dominate the economy, potentially leading to existential risks. However, the practical feasibility of such scenarios is questionable due to factors like limited investment opportunities and the tendency for returns to diminish as the invested amount grows. Overall, the article highlights the challenges in predicting the consequences of compound interest over extended periods – AI-generated abstract.