Capital in the Twenty-First Century

by Thomas Piketty

The second salient fact concerns the comparison between Europe and the United States. Unsurprisingly, the shocks of the 1914–1945 period affected Europe much more strongly, so that the capital/income ratio was lower there from the 1920s into the 1980s. If we except this lengthy period of war and its aftermath, however, we find that the capital/income ratio has always tended to be higher in Europe. This was true in the nineteenth and early twentieth centuries (when the capital/income ratio was 6 to 7 in Europe compared with 4 to 5 in the United States) and again in the late twentieth and early twenty-first centuries: private wealth in Europe again surpassed US levels in the early 1990s, and the capital/income ratio there is close to 6 today, compared with slightly more than 4 in the United States (see Figures 5.1 and 5.2