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Wealth And Inequality In Eight Centuries Of British Capitalism

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  • Jakob Brochner Madsen

Abstract

This paper constructs annual data for the aggregate wealth-income ratio, W-Y, saving, s, and growth, g, for Britain over the period 1210-2013 and tests Piketty’s central hypothesis that the W-Y ratio is governed by the s-g ratio in the long run. Furthermore, Piketty’s model is extended by the share of non-reproducibles in total wealth to explain the W-Y ratio during different eras of capitalism – pre-industrialization, industrialization and the knowledge economy. It is shown that savings, growth and the share of non-reproducibles in total wealth have been the fundamental drivers of the W-Y ratio over the past eight centuries

Suggested Citation

  • Jakob Brochner Madsen, 2016. "Wealth And Inequality In Eight Centuries Of British Capitalism," Monash Economics Working Papers 20-16, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2016-20
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    References listed on IDEAS

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    Cited by:

    1. Madsen, Jakob B., 2019. "Wealth and inequality over eight centuries of British capitalism," Journal of Development Economics, Elsevier, vol. 138(C), pages 246-260.
    2. Escribá-Pérez, F.J. & Murgui-García, M.J. & Ruiz-Tamarit, J.R., 2018. "Economic and statistical measurement of physical capital: From theory to practice," Economic Modelling, Elsevier, vol. 75(C), pages 246-255.
    3. MADSEN, Jakob B, 2018. "Is Inequality Increasing in r-g? The Dynamics of Capital’s Income Share in the UK, 1210-2013," Discussion paper series HIAS-E-70, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.

    More about this item

    Keywords

    W-Y ratio; inequality; non-reproducibles versus reproducibles factors of production;

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • P1 - Economic Systems - - Capitalist Systems

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