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Missing equation in Piketty’s r-g theory
Economics and Business Letters
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| Title |
Missing equation in Piketty’s r-g theory
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| Creator |
Fujita, Yasunori
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| Description |
Although Thomas Piketty has revolutionized our understanding of inequality, logic behind his r-g theory is not developed formally in his researches. The present paper, by finding out the missing part of Piketty’s r-g theory, present a complete version of Piketty’s framework. It is revealed that necessary and sufficient condition for the r-g theory is SY(t)+AY(t)=CF(t). That is, savings in a broad sense (left hand side) is equal to the consumption using financial capital (right hand side). We also reveal that the problem is not in the Second Fundamental Law of Capitalism, but in the formulation of capital accumulation dynamics. Furthermore, it is demonstrated that the two Fundamental Laws of Capitalism are not necessary for deriving the r-g theory.
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| Publisher |
Oviedo University Press
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| Contributor |
—
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| Date |
2015-06-30
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — |
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| Format |
application/pdf
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| Identifier |
http://www.unioviedo.es/reunido/index.php/EBL/article/view/10637
10.17811/ebl.4.2.2015.57-62 |
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| Source |
Economics and Business Letters; Vol 4, No 2 (2015): June; 57-62
Economics and Business Letters; Vol 4, No 2 (2015): June; 57-62 2254-4380 10.17811/ebl.4.2.2015 |
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| Language |
eng
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| Relation |
http://www.unioviedo.es/reunido/index.php/EBL/article/view/10637/10301
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| Rights |
Copyright (c) 2015 Economics and Business Letters
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