The American credit cycle is at a dangerous point
Welcome to a bad time for big debts
The celebrated tome “Capital in the Twenty-First Century”, by Thomas Piketty, a French economist, runs to 204,000 words—longer even than Homer’s “Odyssey”. But the book’s central argument can be distilled to a single, three-character expression: r > g. As long as “r”, the real rate of return to capital, exceeds “g”, the real rate of economic growth—as Mr Piketty calculated it did over the course of the 20th century—then inequality will supposedly widen.
This article appeared in the Finance & economics section of the print edition under the headline “i > g”
Finance & economics May 27th 2023
- What happens if America defaults on its debt?
- China and Russia compete for Central Asia’s favour
- China’s state capitalists celebrate their soaring shares
- The American credit cycle is at a dangerous point
- What would humans do in a world of super-AI?
- What performance-enhancing stimulants mean for economic growth
From the May 27th 2023 edition
Discover stories from this section and more in the list of contents
Explore the editionMore from Finance & economics
An American purchase of Greenland could be the deal of the century
Donald Trump’s threat of force is wrong. Instead, he should name a price
China’s markets take a fresh beating
Authorities have responded by bossing around investors
Can America’s economy cope with mass deportations?
Production slowdowns, more imports and pricier housing could follow
Would an artificial-intelligence bubble be so bad?
A new book by Byrne Hobart and Tobias Huber argues there are advantages to financial mania
Will Elon Musk dominate President Trump’s economic policy?
He will face challenges from both America firsters and conservative mainstreamers
What investors expect from President Trump
Shareholders are over the moon; bondholders are readying the whip hand