Separating efficiency and equality, automation, and Piketty's theory of increasing capital share

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Abstract

Despite disincentive effects, it is more efficient to tackle inequality by general equality promotion policies, including tax/transfers, than by trying to pursue equality in specific issues or policies. The latter policy also has the same degree of disincentive effects as the general policy but has additional distortive effects. While Piketty' concern with inequality is well taken and his proposal to reduce inequality has merits, his argument on the inevitability of increasing capital share under capitalism and the condition of rate of returns to capital being larger than the rate of growth in incomes (r > g) is not correct. (JEL D3, D6, H).

Original languageEnglish
Pages (from-to)396-398
Number of pages3
JournalContemporary Economic Policy
Volume34
Issue number3
DOIs
Publication statusPublished - 1 Jul 2016
Externally publishedYes

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