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Yes, r > g. So What?

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  • N. Gregory Mankiw

Abstract

Piketty argues that r > g is the "the central contradiction of capitalism" and that it will lead to an "endless inegalitarian spiral." As a result, he argues for a new global tax on capital. In this brief essay, I explain why I am not persuaded by either his prediction or his prescription.

Suggested Citation

  • N. Gregory Mankiw, 2015. "Yes, r > g. So What?," American Economic Review, American Economic Association, vol. 105(5), pages 43-47, May.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:43-47
    Note: DOI: 10.1257/aer.p20151059
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.p20151059
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    References listed on IDEAS

    as
    1. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-622, May.
    2. Ludwig Straub & Iván Werning, 2020. "Positive Long-Run Capital Taxation: Chamley-Judd Revisited," American Economic Review, American Economic Association, vol. 110(1), pages 86-119, January.
    3. Judd, Kenneth L., 1985. "Redistributive taxation in a simple perfect foresight model," Journal of Public Economics, Elsevier, vol. 28(1), pages 59-83, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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