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Is an increasing capital share under capitalism inevitable?
- Source :
-
European Journal of Political Economy . Jun2015, Vol. 38, p82-86. 5p. - Publication Year :
- 2015
-
Abstract
- Piketty's influential book Capital in the Twenty - First Century and its prominent review by Milanovic in the Journal of Economic Literature both assert the inevitability of an increasing share of capital in total income, given a higher rate of return to capital than the rate of growth in income. This paper shows by a specific example, a logical argument and its intuition that the alleged inevitability is not valid. Even just for capital to grow faster than income, we need an additional requirement that saving of non-capital income is larger than consumption of capital income. Even if this is satisfied, the capital share may not increase as the rate of return may fall and non-capital incomes may increase with capital accumulation. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 01762680
- Volume :
- 38
- Database :
- Academic Search Index
- Journal :
- European Journal of Political Economy
- Publication Type :
- Academic Journal
- Accession number :
- 102312437
- Full Text :
- https://doi.org/10.1016/j.ejpoleco.2015.02.001