SEMINAR: Rent Extraction by Capitalists

Abstract - Rent extraction by capitalists is present if the capital income share exceeds the capital output elasticity. Based on a sample of 111 countries during the period 1970-2010, this paper provides estimates of the capital output elasticity and compares these to countries capital income shares. Three findings arise: i. for the average country in the sample, the capital income share significantly exceeds the capital output elasticity, ii. the difference between the capital income share and the capital output elasticity has increased since the 1980s, iii. in democracies the capital income share is not significantly different from the capital output elasticity.