In the long run the capital-to-income ratio converges on the savings rate divided by the growth rate.
Distinct from the r > g inequality: this is the accounting relationship beta = s/g. A country saving 10% and growing 2% converges on a capital stock five times national income.
In practice
- A household putting aside the same share of a shrinking income accumulates more relative to what it earns each year, and feels no richer.
- A slowing economy with unchanged saving accumulates a larger stock of wealth relative to income, which is arithmetic rather than policy.