To sum up: the law β = s/g does not explain the short-term shocks to which the capital / income ratio is subject, any more than it explains the existence of world wars or the crisis of 1929—events that can be taken as examples of extreme shocks—but it does allow us to understand the potential equilibrium level toward which the capital / income ratio tends in the long run, when the effects of shocks and crises have dissipated.
