Factor Income Distribution and Endogenous Economic Growth - When Piketty meets Romer -

Konferenzbeitrag

We scrutinize Thomas Piketty's (2014) theory concerning the relationship between an economy's long-run growth rate, its capital-income ratio, and its factor income distribution put forth in his recent book Capital in the Twenty-First Century. We find that a smaller long-run growth rate may be associated with a smaller capital-income ratio. Hence, Piketty's Second Fundamental Law of Capitalism does not hold. However, in line with Piketty's theory a smaller long-run growth rate goes together with a greater capital share. These findings obtain in variants of Romer's (1990) seminal model of endogenous technological change. Here, both the economy's savings rate and its growth rate are endogenous variables whereas in Piketty's theory they are both exogenous parameters.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Growth and Inequality ; No. G09-V2

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: General ; Technological Change: Choices and Consequences; Diffusion Processes ; Aggregate Factor Income Distribution

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Irmen, Andreas ; Tabakovic, Amer
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/145700
• Last update: 10.03.2025, 11:44 AM CET