Economic size and debt sustainability against Piketty's capital inequality

Hyejin Cho

MPRA Paper from University Library of Munich, Germany

Abstract: This article presents a methodology designed to facilitate alternative variables measuring economic growth. A capital-labor split of Cobb-Douglas function is adapted for use in the context of economic growth. A capital/income ratio and two fundamental laws of capitalism originated by Thomas Piketty illustrate capital inequality undervalued with respect to labor inequality. In addition, the article includes export and external debt as strong alternatives. Empirical data of the World Bank are analyzed to demonstrate broad differences in economic sizes. The case analysis on Latin America as an example of different sized economy is also discussed

Keywords: capital-labor split; factors of production; capital/income ratio; Thomas Piketty; capitalism; economic size; debt sustainability; Latin America; import substitution industrialization (ISI) model; insolvent external debt; openness; external debt to exports ratio (search for similar items in EconPapers)
JEL-codes: E01 E22 G00 G01 H63 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-mac
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Published in ACRN Journal of Finance and Risk Perspectives 2.4(2015): pp. 21-42

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https://mpra.ub.uni-muenchen.de/75796/1/MPRA_paper_72532.pdf revised version (application/pdf)

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