Capital in the Twenty-First Century

by Thomas Piketty

Here I have used the demographic and economic growth predictions presented in Chapter 2, according to which global output will gradually decline from the current 3 percent a year to just 1.5 percent in the second half of the twenty-first century. I also assume that the savings rate will stabilize at about 10 percent in the long run. With these assumptions, the dynamic law β = s / g implies that the global capital/income ratio will quite logically continue to rise and could approach 700 percent before the end of the twenty-first century, or approximately the level observed in Europe from the eighteenth century to the Belle Époque. In other words, by 2100, the entire planet could look like Europe at the turn of the twentieth century, at least in terms of capital intensity.