The Origin of Piketty’s Inequality <i>r</i> > <i>g</i> Considered in a General Framework

Abstract

This paper studies the origin of Piketty's inequality between the profit rate (r) and the growth rate of the national income (g) by focusing on the growth rate (γ) of the r g ratio in an economy that grows gradually along a succession of production cycles. It is shown that, given a succession of three production cycles, the value of γ in the last cycle is determined by the equation