Open Journal of Statistics

Volume 6, Issue 1 (February 2016)

ISSN Print: 2161-718X   ISSN Online: 2161-7198

Google-based Impact Factor: 0.53  Citations  

Piketty’s Capital-Income Theory Reconsidered for a Small Open Economy with Increasing Savings Rate

HTML  XML Download Download as PDF (Size: 306KB)  PP. 25-30  
DOI: 10.4236/ojs.2016.61004    4,295 Downloads   5,124 Views  Citations
Author(s)

ABSTRACT

Since Piketty offered a new view of capital/income ratio, numerous attempts have been made to examine the relationship between return on capital, economic growth and the capital/income ratio. This paper attempts to shed new light on this field. More precisely, following recent literatures that pay attention to dynamics of external balance sheets of countries, we examine if Piketty’s results for large countries are robust for a country that takes the world rate of return on capital as given and whose savings rate increases gradually from negative value. It is revealed that for such a country, (1) Kuznets curve is drawn and (2) capital/income ratio decreases in accordance with a rise in savings rate and return on capital.

Share and Cite:

Fujita, Y. (2016) Piketty’s Capital-Income Theory Reconsidered for a Small Open Economy with Increasing Savings Rate. Open Journal of Statistics, 6, 25-30. doi: 10.4236/ojs.2016.61004.

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.