Capital in the Twenty First Century after Capital in the Twenty First Century.

Thomas Piketty’s Capital in the Twenty-First Century stands as a land-mark in economic literature, deservedly lauded for its engaging narrative oninequality. I argue that one of the important features of this book was theuse of a simple result in economic theory as a rhetorical device to explainthe history of wealth accumulation and concentration. Piketty reformulatesit as the “second fundamental law of capitalism” and explains differences inwealth-income ratios (β) in rich countries using variation in growth rates. Iuse a larger sample of countries, whose data appeared after the publicationof Capital, to show that this law is not generalizable. This result is drivenby the fact that despite structural differences in per-capita growth, wealth-income ratios are large in many big economies.