Thursday, April 30, 2015

Lars P. Syll — Validating assumptions


Picking apart Piketty.
Piketty argues that the higher income share of wealth-owners is due to an increase in the capital-output ratio resulting from a high rate of capital accumulation. The evidence suggests just the contrary. The capital-output ratio, as conventionally measured has either fallen or been constant in recent decades. The apparent increase in the capital-output ratio identified by Piketty is a valuation effect reflecting a disproportionate increase in the market value of certain real assets. A more plausible explanation for the increased income share of wealth-owners is an unduly low rate of investment in real capital. — Robert Rowthorn
Lars P. Syll’s Blog
Validating assumptions
Lars P. Syll | Professor, Malmo University

No comments: