Sunday, May 11, 2014

Homburg on Piketty's Capital in the 21st Century

Here is a link to a paper by economist Stefan Homburg that critiques Thomas Piketty's Capital in the 21st Century. 

http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-530.pdf

It is an academic paper so it is a little wonky but there are some parts in there that are free of economic jargon and will make sense to many readers.

To summarize it strongly criticizes Piketty's claim that a rate of return on capital that is greater than the growth rate of output (r > g) will lead to a rising wealth - income ratio and perpetuate inequality. It also calls out Piketty's implicit assumption that savings are never consumed and criticizes Piketty's definition of capital.

No comments:

Post a Comment