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It may also raise the return to capital by restraining wage growth.
But today, the return to capital does not seem to have diminished, though wages have.
It estimates that 20 percent of the corporate tax is paid by labor, 20 percent is borne by the "normal" return to capital – roughly, the risk-free interest rate – and 60 percent by the "supernormal" return to capital.
If, on the other hand, somehow labor was excessively strong, reducing the return to capital and thus thwarting job creation, redressing this imbalance might be good.
The development of this kind of social overhead capital is certainly a prerequisite for a high return to capital in manufacturing, wholesaling, and retailing.
Interestingly, Mr Piketty reckons this world, in which the return to capital is persistently higher than growth, is the more "normal" state.
Similar(20)
As politicians return to capitals, more restrictions may come.Last year saw a surge in social conservatism.
But, growing companies are capital hungry, and that means that Touch of Modern will, in my view, return to capital-havers for some more.
The country returned to capital markets a month later.
Returns to capital are rising faster than economies are growing.
Second thing is the returns to capital are so much more than the returns to labor.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com