So, I have finally gotten around to reading Piketty's monumental book. Something struck me right away that I think many ignore, at least I have seen no one comment on it. His emphasis on the importance of r > g, (rate of return on capital as he defines it greater than GDP growth rate) seems overblown. Now I must admit that he repeatedly warns that the path of the distribution of income and wealth is hard to predict and that many factors are involved. But it is also the case that he makes little of how often the direction of change does not correspond with the direction of change in this simple equation, that its effect is overwhelmed by other factors.
Well, Dan Kervick did address it, as I recall.
When The Rate Of Return And The Rate Of Growth Do Not Matter Much For Piketty
J. Barkley Rosser | Professor of Economics and Business Administration James Madison University