2 ms·
It is pretty brazen to say no theory exists when you were directed not only to the paper but the section where that theory is described. Since you can't be bot
by foobarqux 12y ago
It is pretty brazen to say no theory exists when you were directed not only to the paper but the section where that theory is described.
Since you can't be bothered to read it, section 5 of Piketty's HID paper describes his model of long-run wealth distribution, assuming a Cobb-Douglas utility function and random multiplicative shocks to an individual's savings rate, as a Pareto distribution where the tail concentration is a function of r-g.
I am spoon feeding you at this point and I won't do it anymore.
- yummyfajitas 12y agoActually you are right - I missed it the first time. My mistake. Based on a quick skim, it looks like Piketty is assuming far more than r > g (which is of course necessary), but there does appear to be some sort of distributional theory. Based on a first skim (I'll take a more detailed look later), inequality appears to be a function of (r - g). I.e., r > g does not imply increasing inequality, the magnitude of the inequality merely determines the level of inequality. Seems to disagree a bit with the newspaper summary of Piketty, but I'll have to read more carefully to be sure.