Regenerative Threshold

Definition

The minimum values of R and γ required for a system to be self-sustaining. REA establishes R ≥ 0.8 and γ ≥ 1.0 as the thresholds below which capital depletes over time regardless of other factors.

Formula

Example

A program with R = 0.7 and γ = 2.0 still depletes (losing 30% per cycle). A program with R = 0.9 and γ = 0.8 destroys value. Both invariants must exceed thresholds.

Source

REA Section 4.3