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Saving and Investment in the Twenty-First Century : The Great Divergence.

Bibliographic Details
Main Author: von Weizsäcker, Carl Christian.
Other Authors: Krämer, Hagen M.
Format: eBook
Language:English
Published: Cham : Springer International Publishing AG, 2021.
Edition:1st ed.
Subjects:
Electronic books.
Online Access:Click to View
Table of Contents:
  • Intro
  • Preface
  • Contents
  • About the Authors
  • Symbols
  • List of Figures
  • List of Tables
  • 1 Introduction: Private Wealth and Public Debt
  • 1.1 Overture
  • 1.2 The Welfare State and the Concept of Private Wealth
  • 1.3 The Ambiguous Image of Public Debt
  • 1.4 The Secular Growth of Prosperity
  • 1.5 The Limits of Complexity: The Capital Coefficient Has Remained Constant for the Last One Hundred Years
  • 1.6 Digitalization
  • 1.7 The Consequence: Low Interest Rates, Today and Tomorrow
  • 1.8 "Secular Stagnation"
  • 1.9 "Dynamic Inefficiency" and the Concern for Future Generations
  • 1.10 A Brief Overview of the Following Chapters
  • References
  • Theory and Empirical Evidence
  • 2 The Natural Rate of Interest and the Optimal Rate of Interest in the Steady State
  • Abstract
  • 2.1 Definition of the Natural Rate of Interest
  • 2.2 Profit, Risk, Interest and Overall Economic Returns
  • 2.3 Capital-Theoretical Foundations
  • 2.4 The Generalized Golden Rule of Accumulation
  • 2.5 The Public Debt Ratio and the Period of Production
  • 2.6 Private Wealth T + D
  • 2.7 The Golden Rule for the Lifetime Utility of the Representative Household
  • 2.8 At the Optimum, the Overall Economic Period of Production = The Overall Economic Waiting Period
  • 2.9 Deviations from the Steady State: The Interest Rate as Price Signal and the Risk Premium
  • 2.10 What if the Interest Rate Represents a Biased Price Signal?
  • 2.11 Calibrating Welfare Losses for {{\varvec r}}\ne {{\varvec g}}: An Example
  • 2.12 Conclusion
  • References
  • 3 Wealth and Desired Wealth
  • Abstract
  • 3.1 The Concept of Desired Wealth
  • 3.2 Demographics: The Example of the Savings Triangle
  • 3.3 The Savings Triangle Closely Fits the Saving Rate of the Members of the German Social Security System
  • 3.4 The Law of Increasing Relative Desired Wealth.
  • 3.5 Demographics: The Third Stage of Life Is Increasing Around the World
  • 3.6 The Inheritance of Wealth
  • 3.7 With Increasing Prosperity, the Future-Directedness of Human Action Increases
  • 3.8 Overcoming Poverty Leads to Increasing Future-Directedness
  • 3.9 The Separation of Saving and Investment Results in Greater Provision for the Future
  • 3.10 The Measure Z of Relative Effective Provision for the Future
  • 3.11 The Assumption of a Closed Economy for the OECD Plus China Economic Area
  • 3.12 The Gist
  • References
  • 4 Real Capital
  • Abstract
  • 4.1 Real Capital: Theoretical Foundations
  • 4.1.1 The Point of Differentiating Between Real Capital and Land
  • 4.1.2 The Capital-Output Ratio Does Not Exhibit Any Trend
  • 4.1.3 Prefabricated Thought 1: Marx
  • 4.1.4 Prefabricated Thought 2: Böhm-Bawerk
  • 4.1.5 Prefabricated Thought 3: The CES Production Function
  • 4.1.6 The Coefficient of Intertemporal Substitution
  • 4.1.7 An Application of the Coefficient of Intertemporal Substitution
  • 4.1.8 A Model with Constant Intertemporal Substitution
  • 4.1.9 And What, then, of the "Greater Productivity of More Roundabout Production"?
  • 4.1.10 Roundaboutness of Production, Division of Labor and Complexity
  • 4.1.11 Real Interest Rates of Zero as Price Signal for the Negative Marginal Productivity of More Roundabout Production
  • 4.2 Determining the Value of Private Real Capital in the OECD Plus China Region
  • 4.2.1 Definitions and Concepts
  • 4.2.2 Data
  • 4.2.3 Determining the Value of Real Capital
  • 4.2.4 The Value of Private Real Capital
  • References
  • 5 Land
  • Abstract
  • 5.1 Land: Theoretical Foundations
  • 5.1.1 The Formal Model
  • 5.1.2 The Golden Rule of Accumulation Is Preserved
  • 5.1.3 Is the Steady-State Interest Rate Always Greater Than the Growth Rate?
  • 5.1.4 Ponzi Scheme
  • 5.1.5 Financial Risks of Land Ownership 1: Agriculture.
  • 5.1.6 Financial Risks of Land Ownership 2: Urban Land
  • 5.1.7 A Dual Model of Land Use
  • 5.1.8 Macrorisks of Urban Land Ownership 1: Taxation or Increasing Supply
  • 5.1.9 Macrorisks of Urban Land Ownership 2: Restrictions on the Freedom of Contract-In Particular, Rent Control
  • 5.1.10 Rent Control as Shared Land Rent
  • 5.1.11 The Role of Interest Rate Risk in the Capitalization of Land Rents
  • 5.1.12 Distributive Aspects of Land Rent
  • 5.1.13 The Real Estate Inheritance Rate
  • 5.2 Determining the Value of Privately-Owned Land in the OECD Plus China Region
  • 5.2.1 Concepts and Data Sources
  • 5.2.2 Land Values and Land Use in Germany
  • 5.2.3 Land as a Component of Real Assets: A Franco-German Comparison
  • 5.2.4 The Value of Privately Owned Land
  • References
  • 6 Public Debt
  • Abstract
  • 6.1 Public Debt: Theoretical Foundations
  • 6.1.1 Introduction
  • 6.1.2 Explicit Net Public Debt
  • 6.1.3 Implicit Public Debt 1: Social Security Retirement Benefits
  • 6.1.4 Implicit Public Debt 2: Public Health Insurance
  • 6.1.5 Implicit Public Debt 3: An Exotic Example in the Form of Germany's Renewable Energy Act
  • 6.1.6 Public Debt When the Real Interest Rate Is Zero
  • 6.1.7 The Discounting Discrepancy Problem
  • 6.1.8 The Relative Size of the Public Sector
  • 6.1.9 Refining the Concept of the Relative Size of the Public Sector
  • 6.1.10 Shiller's "TRILLS" Proposal
  • 6.1.11 TRILLs When the Interest Rate Is a Biased Price Signal
  • 6.1.12 Central Bank Money
  • 6.2 Determining the Value of Explicit and Implicit Public Debt in the OECD Plus China Region
  • 6.2.1 Explicit Public Debt
  • 6.2.2 Implicit Public Debt
  • 6.2.2.1 Public Retirement Schemes
  • 6.2.2.2 Public Health Insurance
  • 6.2.2.3 Implicit Public Debt from Health Insurance in the OECD Plus China Region.
  • 6.2.3 Explicit and Implicit Public Debt in the OECD Plus China Region: Summary of Estimates
  • References
  • 7 Investment, Saving and Stagnation from a Keynesian Perspective
  • Abstract
  • 7.1 The Disparity Between Capital Supply and Capital Demand and the Divergence Between Saving and Investment
  • 7.2 Public and Private Saving and Public and Private Investment in a Macroeconomic Context
  • 7.3 The Adjustment Mechanism in Disequilibrium
  • 7.4 John Maynard Keynes as Spiritual Father of the Modern Theory of Stagnation
  • 7.5 Alvin Hansen and Secular Stagnation
  • 7.6 Larry Summers' Rediscovery of Alvin Hansen's Stagnation Thesis
  • 7.7 Keynes and the New Capital-Theoretical Approach
  • References
  • 8 Concluding Remarks on the Negative Natural Rate of Interest
  • Abstract
  • 8.1 The Great Divergence
  • 8.2 Implicit Public Debt
  • 8.3 The Natural Rate of Interest Is Negative
  • 8.4 The Distribution of Wealth
  • 8.5 Private Wealth at a Real Interest Rate of Zero
  • 8.6 The Shift in Optimal Public Debt After COVID-19
  • 8.7 Real Assets in Comparison with an Estimate by Jordà et al. (2019)
  • 8.8 Total Private Wealth at a Real Interest Rate of Zero
  • 8.9 Recent "Secular Stagnation" Literature: An Example
  • 8.10 Sensitivity Analysis on the Negative Natural Rate of Interest
  • 8.11 A Summary of the Results of Our Empirical Estimates
  • References
  • Economic Policy
  • 9 Monetary Stability and the Stability of the Open Society
  • Abstract
  • 9.1 Authoritarian Tendencies, Complexity and Simplicity
  • 9.2 Irenicism: The Symbiosis of Democracy and Market Economy I
  • 9.3 Irenicism: The Symbiosis of Democracy and Market Economy II-The Welfare State
  • 9.4 The Intertemporal Aspect of Social Insurance
  • 9.5 Subsidiarity and Stable Money: A "Stability Pact"
  • 9.6 A Culture of Personal Responsibility and Future-Directedness
  • 9.7 Inflation or Public Debt?.
  • 9.8 The Aspect of Freedom
  • References
  • 10 A New Era of International Economic Policy
  • Abstract
  • 10.1 Free Trade in Modernity
  • 10.2 Free Trade or Import Barriers as Nash Equilibrium
  • 10.3 "Friedman World" or "Keynes World"
  • 10.4 The Natural Rate of Interest, the Friedman World and the Keynes World
  • 10.5 Unilateral Action and the Rules of Free Trade
  • 10.6 The New Protectionism
  • 10.7 A Multilateral Balanced Account Agreement
  • References
  • 11 Europe, the Euro and German Demographic Renewal
  • Abstract
  • 11.1 The Single Market
  • 11.2 Europe's Global Political Environment: International Demand Power
  • 11.3 The Euro and the Single Market
  • 11.4 The Euro as Pillar of the Single Market
  • 11.5 The Problem of National Current Account Balances
  • 11.6 Investment Promotion as the Solution?
  • 11.7 A European Balanced Account Agreement, but "No Bailouts"
  • 11.8 The Result for Germany: Demographic Renewal
  • 11.9 A "Just" Distribution of Employment Opportunities
  • References
  • 12 The Global Economy After the End of Capital Scarcity: A Utopian Proposal
  • Abstract
  • 12.1 From Fairy Tale to Political Economy in Ten Years
  • 12.2 The End of Capital Scarcity is Not the End of Time Scarcity
  • 12.3 The Chinese Economic Miracle
  • 12.4 Friedrich List and the Chinese Economic Miracle
  • 12.5 A Two-Country Thought Experiment
  • 12.6 The Utopia of a Demand-Oriented Growth Strategy for Developing Countries
  • 12.7 A Utopian Look into the Future
  • 12.8 The Gist of the Argument
  • References
  • 13 Concluding Remarks on Economic Policy
  • Abstract
  • 13.1 Summary Part 1: Economic Policy in Germany, Europe and the World
  • 13.2 Summary Part 2: Stability and Utopia
  • 13.3 Fiscal Policy as Steering Instrument: The Appropriate Real Interest Rate
  • 13.4 Fiscal Policy as Steering Instrument: The National Level.
  • 13.5 A Replacement for the Debt Brake.

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