EconPapers    
Economics at your fingertips  
 

Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010

Thomas Piketty and Gabriel Zucman

Post-Print from HAL

Abstract: How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970–2010 national balance sheets recently compiled in the top eight developed economies. For the United States, United Kingdom, Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise` of wealth-income ratios in recent decades, from about 200–300% in 1970 to 400–600% in 2010. In effect, today's ratios appear to be returning to the high values observed in Europe in the eighteenth and nineteenth centuries (600–700%). This can be explained by a long-run asset price recovery (itself driven by changes in capital policies since the world wars) and by the slowdown of productivity and population growth, in line with the β=sg Harrod-Domar-Solow formula. That is, for a given net saving rate s = 10%, the long-run wealth-income ratio β is about 300% if g = 3% and 600% if g = 1.5%. Our results have implications for capital taxation and regulation and shed new light on the changing nature of wealth, the shape of the production function, and the rise of capital shares.

Keywords: United Kingdom; Germany; United States; Price level; France; wealth-to-income ratios (search for similar items in EconPapers)
Date: 2014-09
References: Add references at CitEc
Citations: View citations in EconPapers (637)

Published in Quarterly Journal of Economics, 2014, 129 (3), pp.1255-1310. ⟨10.1093/qje/qju018⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010 (2014) Downloads
Working Paper: Capital is back: wealth-income ratios in rich countries 1700-2010 (2014) Downloads
Working Paper: Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010 (2014)
Working Paper: Capital is Back: Wealth-Income Ratios in Rich Countries, 1700-2010 (2013) Downloads
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:hal:journl:halshs-01109372

DOI: 10.1093/qje/qju018

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2024-10-17
Handle: RePEc:hal:journl:halshs-01109372