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Rent Extraction by Capitalists

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  • Markus Brueckner

Abstract

Rent extraction by capitalists is present if the capital income share exceeds the capital output elasticity. Based on a sample of 111 countries during the period 1970-2010, this paper provides estimates of the capital output elasticity and compares these to countries' capital income shares. Three findings arise: (i) for the average country in the sample, the capital income share significantly exceeds the capital output elasticity; (ii) the difference between the capital income share and the capital output elasticity has increased since the 1980s; (iii) in democracies the capital income share is not significantly different from the capital output elasticity.

Suggested Citation

  • Markus Brueckner, 2016. "Rent Extraction by Capitalists," ANU Working Papers in Economics and Econometrics 2016-634, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2016-634
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp634.pdf
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    Cited by:

    1. Babarinde rene ADEROMOU & Mahmoudou Bocar SALL, 2019. "The Minority investor protection and corporate governance practices," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 10(2), pages 102-117, December.
    2. repec:acb:cbeeco:2023-696 is not listed on IDEAS
    3. Babarinde rene ADEROMOU & Mahmoudou Bocar SALL, 2019. "Minority investor protection and corporate governance practices," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 10(2), pages 102-117, December.
    4. Markus Brueckner & Gabriele Ciminelli & Norman Loayza, 2024. "External shocks and labor market reforms in autocracies and democracies: evidence from oil price windfalls," ANU Working Papers in Economics and Econometrics 2024-696, Australian National University, College of Business and Economics, School of Economics.
    5. Paitoon Kraipornsak, 2020. "The Different Structure of Sources of Growth between the Developed and the Developing Asia and the Pacific Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(1), pages 22-34, January.
    6. Ni, Niannian & Liu, Yulin & Zhou, Hui, 2022. "Financial openness, capital rents and income inequality," European Journal of Political Economy, Elsevier, vol. 71(C).

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    More about this item

    Keywords

    Capital output elasticity; capital income share; rent extraction;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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