FACTOR INCOME DISTRIBUTION AND ENDOGENOUS ECONOMIC GROWTH: PIKETTY MEETS ROMER

Andreas Irmen and Amer Tabakovic

Economic Inquiry, 2020, vol. 58, issue 3, 1342-1361

Abstract: What is the relationship between the economy's long‐run growth rate, its capital‐income ratio, and its factor income distribution? A satisfactory answer requires an endogenous growth and savings rate. We scrutinize Piketty's (2014) theory in a richly parameterized variant of Romer's (1990) seminal model with and without population growth. The economy's growth and savings rate are exogenous in Piketty's theory and endogenous in Romer's. In contrast to Piketty's Second Fundamental Law of Capitalism a smaller growth rate may be associated with a smaller capital‐income ratio. Moreover, it may go together with a greater or a smaller capital share. (JEL E10,E21,E25,O33,O41)

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/ecin.12850

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecinqu:v:58:y:2020:i:3:p:1342-1361

Ordering information: This journal article can be ordered from
https://ordering.onl ... s.aspx?ref=1465-7295

Access Statistics for this article

Economic Inquiry is currently edited by Tim Salmon

More articles in Economic Inquiry from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().