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What understanding of capital for tomorrow?

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Abstract

This paper discusses the thesis put forward by Piketty (2014a) stressing the risk of an explosion of wealth inequality because capital accumulates faster than labor income in several countries, especially in the U.US. Although the overall empirical conclusion on the rise of inequalities is indisputable, I point out that the economic modeling underlying this approach exhibits several important shortcomings. Moreover, there are more effective policy recommendations to fight against inequality than the one highlighted in the book —namely, a world-wide global tax on capital

Suggested Citation

  • Gaël Giraud, 2014. "What understanding of capital for tomorrow?," Documents de travail du Centre d'Economie de la Sorbonne 14096, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:14096
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    References listed on IDEAS

    as
    1. Gaël Giraud & Cécile Renouard & Hélène L'Huillier & Raphaële de la Martinière & Camille Sutter, 2012. "Relational Capability: A Multidimensional Approach," Documents de travail du Centre d'Economie de la Sorbonne 12096, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    3. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    4. Gaël Giraud & Zeynep Kahraman, 2014. "How Dependent is Growth from Primary Energy? The Dependency ratio of Energy in 33 Countries (1970-2011)," Post-Print halshs-01151590, HAL.
    5. Mr. Michael Kumhof & Mr. Jaromir Benes, 2012. "The Chicago Plan Revisited," IMF Working Papers 2012/202, International Monetary Fund.
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    More about this item

    Keywords

    Capital; capitalism; inequality; Kaldor; Solow; capital tax;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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