Rent Extraction by Capitalists
36 Pages Posted: 3 May 2016
Date Written: May 1, 2016
Abstract
Rent extraction by capitalists is present if the capital income share exceeds the capital output elasticity. Based on a sample of 111 countries during the period 1970-2010, this paper provides estimates of the capital output elasticity and compares these to countries’ capital income shares. Three findings arise: (i) for the average country in the sample, the capital income share significantly exceeds the capital output elasticity; (ii) the difference between the capital income share and the capital output elasticity has increased since the 1980s; (iii) in democracies the capital income share is not significantly different from the capital output elasticity.
Keywords: capital output elasticity, capital income share, rent extraction
JEL Classification: E0, O4
Suggested Citation: Suggested Citation