Capital in the Twenty-First Century

by Thomas Piketty

The most important factor in the long run is slower growth, especially demographic growth, which, together with a high rate of saving, automatically gives rise to a structural increase in the long-run capital / income ratio, owing to the law β = s/g. This mechanism is the dominant force in the very long run but should not be allowed to obscure the two other factors that have substantially reinforced its effects over the last few decades: first, the gradual privatization and transfer of public wealth into private hands in the 1970s and 1980s, and second, a long-term catch-up phenomenon affecting real estate and stock market prices, which also accelerated in the 1980s and 1990s in a political context that was on the whole more favorable to private wealth than that of the immediate postwar decades.