Hello eek!
The exponent determines, how the town grows after reaching 500 inhabitants. I can´t tell you the exact formula, but a value below 1.0 causes the growth to flatten out, but it will not cause decay.
The decay, which is sometimes observed in old save games, is caused by the shift of the goal, to which the city wants to grow toward. If, due to the new formula and other adjustments we made, the goal is below the current city size, a decay may occur.
Best regards,
Tom