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In fact, just reading a bit further brings up a few points that are related to market price and policy choices issues:

-Private capital shot up in the UK by a level that savings could not explain, apparently mostly because privatisations happened at very low prices (same with Russia in the 90s). This would be, to a lesser extent, a factor in France and Italy as well. Hard to believe that it was

-Italy had a much higher private capital to revenue ratio, mostly because the State (Berlusconi?) chose to borrow from the rich rather than tax them.

-Piketty mentions that the price of assets (he seems to mean company assets, and thus exclude financial and real estate ones, which clearly moved a lot) went up, explaining about a third of the rise in capital to revenue ratio. He states that the ratio of market value to book value went up in all 8 main developed countries since its value "in 1970-80".

I find that very strange. In all countries, the ratio was higher in 1980 than 1970. In all countries but France and Canada, 1980 or 1981 is a low point (Canada starts slowly rising in 1976, and takes off in 1990. France keeps going down until 1984, returns to 1970 value in 1986 with a sharp upward trend, drops again from 1988 to 1995 and takes off again in 1995 -following political changes), after which it takes off.
Now, the narrative of a major change in trend right at the time of the Thatcher-Reagan revolution is very different from a return to long-term valuation following a vague starting point in the "1970-80" period. I know Piketty has little sympathy for the Thatcher-Reagan model, so what's going on? Is he afraid that he would lose much readership if he made it too explicit?

Guess that will be the basis of a second set of notes...

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Apr 12th, 2014 at 06:36:20 AM EST
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This point is definitely worth a diary. I have lots of thoughts, but I'm still behind in the book, so laying out the specifics could help discussion a lot.
by Metatone (metatone [a|t] gmail (dot) com) on Sun Apr 13th, 2014 at 04:54:47 AM EST
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