Thomas Piketty claims that when the rate of return on wealth exceeds the rate of growth, income inequality increases. This paper builds on previous research in the literature to demonstrate the incorrectness of Piketty's thesis and to suggest an amendment to it. A neoclassical overlapping...

This paper presents a neoclassical overlapping generations model in which the rate of growth is positive, income distribution does not become more unequal in a steady state, and the real rate of return on wealth exceeds the rate of growth. The existence of two assets in the model distinguishes...