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It seems to me obvious that it is rich people who own shares and property. Therefore if total income from capital grows faster than total income from labour,
by MarkMc 10y ago
It seems to me obvious that it is rich people who own shares and property. Therefore if total income from capital grows faster than total income from labour, the gap between rich and poor will grow.
But I have to admit I don't really understand theory behind the opposite view. In particular, the article says "the data shows changes in the savings rate are likely to offset most of the effects of an increase in capital share of national income".
Is this saying that poor people will save more as capital returns grow, and this mostly compensates poor people for the relatively slow growth in wages?