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Economic size and debt sustainability against Piketty's capital inequality

cho, hyejin (2015): Economic size and debt sustainability against Piketty's capital inequality. Published in: ACRN Journal of Finance and Risk Perspectives , Vol. 4, No. 2 (March 2015): pp. 21-42.

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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

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