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Solomon's Knot by Robert D. Cooter, Hans-Bernd Schäfer

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Chapter 1

It’s about the Economy

A grand master asks the tournament organizers to pay him by placing one penny on the first white square of a chess board, two pennies on the second white square, four on the third white square, proceeding until all thirty-two white squares are covered. The initial penny would double in value thirty-one times, resulting in more than $21 million being laid on the last white square. Growth compounds faster than the mind can grasp. Compounded over a century, 2 percent annual growth increases wealth more than seven times, which is roughly the growth rate of the United States in the previous century, and 10 percent annual growth increases wealth almost fourteen thousand times, which is roughly the growth rate of China ...

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