Growth

Rich and Co.

More Inequality and “Pockets of Misery” Coming and Hate/Fear Politics?

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“…High returns on equity capital may therefore be linked to a more tenuous status for workers and to a drop in the share of GDP which is paid out as labour income….”oh oh ….“…one of the most valuable papers produced in 2017 is an epic example of data-retrieval: a piece of research that spells out the rates of return on important asset classes, for 16 advanced economies, from 1870 to 2015. It is fascinating work, a rich seam for other economists to mine, and a source of insight into some of today’s great economic debates…

…More bracing still are the data’s implications for debates on inequality…High returns on equity capital may therefore be linked to a more tenuous status for workers and to a drop in the share of GDP which is paid out as labour income.

Similarly, long-run returns provide support for the grand theory of inequality set out in 2013 by Thomas Piketty, a French economist, who suggested (based in part on his own data-gathering) that the rate of return on capital was typically higher than the growth rate of the economy. As a consequence, the stock of wealth should grow over time relative to GDP. And because wealth is less evenly distributed than income, this growth should push the economy towards ever higher levels of inequality…In fact, that may understate the case, according to the newly gathered figures..”

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Written by Rich and Co.

January 9, 2018 at 8:51 pm

Posted in Uncategorized

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