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by albertsun
3232 days ago
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You're seeing something shaped like an exponential growth curve and missing the fact that it's not a growth curve at all. Think about what's on the x-axis here. The graph is really a histogram with average income growth binned into one percentile intervals. On the second, thanks for the reference, haven't read that. Would be interested to hear how you think that change would lead to these effects. |
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Okay, slice the upper quartile and graph it over time. Now it's a proper growth curve, but it communicates the exact same idea.
> On the second, thanks for the reference, haven't read that. Would be interested to hear how you think that change would lead to these effects.
Quick thought experiment that expands on my explanation in the original comment: Suppose you have (a) a wage-earner who spends 90% of their income on goods & saves/invests the other 10%, and (b) an investor who earns an income from assets, spends 10% on goods and reinvests the other 90%.
Now (for the sake of simplicity) suppose inflation is 10% per year. What happens after year 1? What about year 2?