Quote:
Originally Posted by Doctor Zeus
Didnt picketys research show different re inequality
Piketty spent most of the book describing how wealth inequality is self reinforcing basically, with very little discussion of purported causal effects on economic growth of wealth inequality itself.
He then got debunked on the r>g thesis but that's another topic.
In general literature about inequality and economic growth focuses much more on income inequality (where at extreme levels the idea of it being a drag in economic growth seems to have a basis) than in wealth inequality, which even if they might appear as close relatives, actually are a world apart.
Think of the sp500, simplify things by imagining it's all owned by American households, and try to describe a model in which if the top 25% owns 90% of it, economic growth is sensibly higher than if the top 10% owns 90%, under the same income distribution in both cases.
Try qualitatively, logically, why should gdp growth, the total quantity of value produced by society, have any relationship with wealth inequality in general, within broad but not extreme ranges? Why would companies invest less, why would people consume less? Why would workers work less or less efficiently ?