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Andrew Leigh ·

YOU? · · 2021 · Open Access · · DOI: https://doi.org/10.4000/oeconomia.10565 · OA: W3172207583

Thomas Piketty isn’t scared to tell a big story. In 2013, he produced Capital in the Twenty-First Century, a 700-page tome about inequality that combined Jane Austen and Honore de Balzac with data from tax returns and national statistics. One idea that captivated many readers was r versus g. When the rate of return on capital (think rental yields and share dividends) exceeds the overall economic growth rate, then inequality rises. When g is bigger than r, inequality falls. The theory didn’t e...