Alex Tabarrok reports on a recent paper by Per Krusell and Tony Smith that articulates the problem with Thomas Piketty’s so-called “Second Law of Capitalism” a problem that Larry Summers claims stems from Piketty “misreading the literature by conflating gross and net returns to capital.” Krusell and Smith conclude: “We find Piketty’s second law quite misleading, and certainly not fundamental.” Krusell and Smith reach this conclusion as follows: “The second ... [Read More]
