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> over this anecdotally chosen timespan, the S&P 500 returned 3.98% / year on average > we've had 2 percent inflation over the same period So, still, return o
by mrow84 12y ago
> over this anecdotally chosen timespan, the S&P 500 returned 3.98% / year on average
> we've had 2 percent inflation over the same period
So, still, return on capital "completely squashes GDP growth over the same period" by twice as much, given your figure. No?
- vasilipupkin 12y agono, US real gdp growth and real S&P 500 returns have been basically in line in the 2000s. And real S&P 500 returns are way lower than world GDP growth over the same period. Piketty assumes that technological innovations will raise returns on capital while not really raising GDP by the same amount. This is a very zero sum game view of the world, which I find strange. Do we really believe that rise of the robots will not increase our GDP ? self driving cars will not increase GDP ? better medical care will not increase GDP ? Maybe, but it doesn't seem realistic
- mrow84 12y agoAh yes, sorry, I had a brain fart and confused growth and inflation... As for Piketty's point on technological innovation, isn't it that it is one possible mechanism to escape the capital trap, but only if the rents on the resulting developments are low enough, and that historically they haven't been because of investor's desire for returns?
- vasilipupkin 12y agoI think his point is that technological innovation will result in transfer of income from labor to investors that finance the innovation. It most certainly will, but he skirts the issue that the innovation itself could very well dramatically increase GDP !
- mrow84 12y agoIsn't it more that there will be a transfer in the share of income, rather than the absolute amount - i.e. not ruling out a rise in absolute GDP?
- deleted 12y ago[deleted]