In my analysis, the size of the gap between r and g, where r is the rate of return on capital and g the economy’s growth rate, is one of the important forces that can account for the historical magnitude and variations in wealth inequality. In particular, it can contribute to explain why wealth inequality was so extreme and persistent in pretty much every society up until World War I (see Piketty 2014a, ch. 10).

That said, the way in which I perceive the relationship between r > g and inequality is often not well captured in the discussion that has surrounded my book. For example, I do not view r > g as the only or even the primary tool for considering changes in income and wealth in the twentieth century, or for forecasting the path of inequality in the twenty-first century. Institutional changes and political shocks— which to a large extent can be viewed as endogenous to the inequality and development process itself—played a major role in the past, and it will probably be the same in the future.

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