Piketty’s laws with investment replacement and depreciation
Ton van Schaik 06 July 2014
Piketty’s book “Capital in the 21st century” has gained popularity with its finding of a growing gap between wage earners and capital owners. This column presents a test to the two main laws in Piketty’s book. The attractiveness of these two laws is in their simplicity, but so is their limitation. Piketty neglects investment replacement and depreciation.
Thomas Piketty has recently drawn worldwide attention with the proposition that the disparity between wage earners and capital owners is increasing, and that governments should intervene to bring this process to a standstill.
Frontiers of economic research Macroeconomic policy
investment, capital depreciation