Economic growth: convergence and divergence
DOI:
https://doi.org/10.15359/eys.24-55.3Keywords:
Piketty, laws of capitalism, return, wageAbstract
Piketty’s fundamental laws of capitalism in his book “Capital in the Twenty-First Century” (2014) are analyzed to explore the explanatory power of the inequality between average annual rate of return on capital and the rate of growth of production, as a fundamental force for divergence. The author’s r > g crucial assumption and his conclusions are questioned. The convergence-divergence phenomenon is rather believed to be an innate phenomenon of the production and distribution processes. This analysis suggests that the core of inequality may not reside in the elasticity-of-resource-composition, influenced by technological advance. Furthermore, this research will try to contribute to a better understanding of the forces influenced by economic growth and income distribution, which could provide a major contribution to the economic sciences.
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