[credit_guy]

That basic premise seems flawed to me for two reasons. First is that r is like a first deriative (of the asset value) and g as a second derivative (gdp being the first derivative of the total assets of a country, while gdp growth the seocnd), so they are not direcly copareable. The second is that r is very directly measurable, while the gdp and gdp growth have huge uncertainties and inconsistencies. Here's an example: the GDP of Bulgaria. In 1996 it was about $10BN, and in 2016 about $50BN. It grew in 20 years by 5, which means an annualized rate of 8.4%. However if you look at the historical gdp growth then the average for the last 20 years is about 1% (see [1] and [2]). Why the disconnect? I don't know, but if someone tells me that r>g because g is 1%, I take that with a grain of salt.

[1] http://www.tradingeconomics.com/bulgaria/gdp [2] http://www.tradingeconomics.com/bulgaria/gdp-growth

[reckoner2]

I don't mean to come off as harsh, but your reasons are wrong. Piketty isn't some random guy who threw together some numbers and came up with a theory. His work is extensively researched and reviewed. He's thought of and responded to every objection you made. If you are interested in the topic then you should definitely read his book.

Take a look at your numbers again. You have made multiple mistakes. Your 8.4% annualized rate is wrong - You can't just take the start and end points to calculate an average. Plus, you are plugging quarterly data into yearly calculations.

[geezerjay]

Your whole argument is nothing more than the fallacy of argument from authority.

Researchers aren't flawless, and they do make mistakes, even in the very methodology they adopt. That's why peer review is a thing, and academia subjects their work to peer review.

Hell, there's a very good reason why the Royal Society's motto is "take nobody's word for it."

[echlebek]

Yeah, exactly, peer review. If you read your parent's argument again, they explicitly mention that.

[qubex]

My greatest issue with Pinketty's work is that he fails to address the fact that compound growth is not commutative (meaning that it is always better to concentrate higher growth rates earlier on, and then benefit from then comparatively ”coast along” at lower growth rates thereafter). This means that average returns is quite senseless as a topic: one needs to take into account the temporal distribution thereof.

[maxerickson]

That GDP growth is quarterly (or something, I didn't ponder it much).

They have annual data that makes more sense.

http://www.tradingeconomics.com/bulgaria/gdp-growth-annual

[credit_guy]

You ar right, it's not 1%, it's 2.89% (from your link). Still, a big distance from 8.4%.

[maxerickson]

In most of the years from 1998-2008 it was over 6%, with a spike above that.

[credit_guy]

And in most of the years after 2008 it was well below 5%, with some years of negative growth. Also, during the period 1998-2008, the GDP increased from about $15BN to about $55BN, representing an annualized rate of about 14%.