February 9, 2015

HIS WORRIES ONLY MATTER IN A LIBERTARIAN UTOPIA:

The Rise and Decline of General Laws of Capitalism (Daron Acemoglu, James A. Robinson, December 2014, NBER Working Paper)

We argue that general economic laws are unhelpful as a guide to understand the past or predict the future, because they ignore the central role of political and economic institutions, as well as the endogenous evolution of technology, in shaping the distribution of resources in society. We use regression evidence to show that the main economic force emphasized in Piketty's book, the gap between the interest rate and the growth rate, does not appear to explain historical patterns of inequality (especially, the share of income accruing to the upper tail of the distribution).

The central fact of politics in the developed world being that the electorate requires government to provide a comprehensive welfare safety net (in other words, wealth redistribution).

Posted by at February 9, 2015 3:48 PM
  

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