Tag Archives: Pareto distribution

Pareto and Piketty

In an NBER working paper, Charles Jones discusses Piketty’s famous r-g term in light of several simple and transparent macroeconomic models. Jones emphasises the role of the Pareto distribution and the difference between partial and general equilibrium reasoning. Importantly,

… exponential growth that occurs for an exponentially-distributed amount of time leads to a Pareto distribution.