articleThe Quarterly Journal of EconomicsMay 21, 2014BRONZE OA

Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010 *

TPThomas PikettyGZGabriel Zucman

Paris School of Economics · London School of Economics and Political Science

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Abstract

Abstract How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970–2010 national balance sheets recently compiled in the top eight developed economies. For the United States, United Kingdom, Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise` of wealth-income ratios in recent decades, from about 200–300% in 1970 to 400–600% in 2010. In effect, today’s ratios appear to be returning to the high values observed in Europe in the eighteenth and nineteenth centuries (600–700%). This can be explained by a long-run asset price recovery (itself driven by changes in capital policies since the world wars)…

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Topics & keywords

Topics
Keywords
  • Economics
  • National wealth
  • Asset (computer security)
  • Capital (architecture)
  • Productivity
  • Population
  • Slowdown
  • Net worth
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