- [[Acemoglu 2012 why nations fail]] # Idea [[Piketty 2013 capital in the twenty-first century|Piketty]] suggests that if the return on capital is greater than the growth rate of an economy ([[growth domestic product|GDP]]), we will have [[economic inequality|income inequality]]. $R > g$ - $R$: return on capital - $g$: growth rate of economy Why? Growth in wealth is $wealth \times R$. Growth in economy is $GDP \times g$. So if $R > g$, wealth is going to grow faster than the economy, so the rich gets richer. But we should consider also tax rate, consumption rate, donation rate, and stupidity. So $(R - t - c- d - s) > g$. ![[Pasted image 20210519112715.png]] # References - https://www.coursera.org/learn/model-thinking/lecture/ugvzu/pikettys-capital-the-power-of-simple-model