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Incorrect. If you're in the 80th percentile, you're permanently locked out of opportunities available to those in the 99th percentile because they can build eff
by wootland 4y ago
Incorrect. If you're in the 80th percentile, you're permanently locked out of opportunities available to those in the 99th percentile because they can build effective barriers with their capital. I'm hardly the first to say this, it's well trod territory. Here's some basics if you want to read up on it: https://www.aeaweb.org/articles?id=10.1257/jep.30.1.185 https://www.aeaweb.org/articles?id=10.1257/jep.30.1.185
- ameister14 4y agoThat's not because of the power law, though. That's because of the circumstances that give rise to the power law. I'm saying that the power law does not cause any of this. Did you not read what you linked? It deals with the causes of power laws in economics, it does not by any means say that power laws cause stagnancy among the relevant population. It does not say this because that would make no sense. Power laws when applied to economics are an indicator that there are underlying processes (effective barriers with capital may be one) that cause the distribution to look this way. They are an illustration, not a cause.