founded the national accounts in the 1920s and reorganized them along Keynesian lines when the General Theory was published, reconstructed them back to 1870 for the U.S. economy. Piketty and Zucman incorporate this research and others. They have acted as editors only. As a layman, I would hardly be qualified to find and interpret original sources. Even most economists might lack that specialty. I simply trust Picketty and Zucman. They will have compounded misreadings and editors’ bias in those sources by adding their own, and I will have added mine. They and I have plenty. Editing is bias by definition. But we can’t do without it. We manage as
best we can.
To make sure, I also test Mill’s idea on stock market data from the same nations and periods. Here my source was the Global Financial Data website marketed by Bloomberg. Market cap corresponds to capital, dividend yield to consumption and total return to output. Charts and tables show free growth as essentially all of
growth in stock markets too.
Now try a first look at the charts and tables. The lollipop-shaped Greek letter @ (phi) is something | call the free growth index. It reads 1 in years when growth is explained as Mill described, 0 in years when belt-tightening was the explanation, and something in between when there was both. The free growth index will be explained in chapters 4 and 5. The charts can be messy, and the data jumps around. There are spikes, both up and down, which tend to disappear in the charts which screen out small absolute values of the denominator (capital acceleration). But the free growth index clearly jumps around 1, not zero, both before or after the screening. It is as often above 1 as below. That means that growth is as likely to coincide with belt-loosening as belt-tightening. My free website
FreeGrowth&OtherSurprises.org shows how everything was calculated.
Economists will not be as surprised as they might have been a century ago. Growth
theory since Solow’s revolutionary papers in 1956 and 1957 has marginalized
Chapter 2: Fast Forward 1/06/16 8
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