Suppose you invest in the stock market and reinvest all dividends.
Thus earning (conservatively) 5%-6% a year. The world economy grows at
(conservatively) 2.5% a year. Thus, in a surprising short time (around
700 years supposing you begin with one million dollars) you will have
more wealth than all of WP (world product), indeed your dividends will
be more than WP. Is thus a theoretical conundrum or just an empirical
one?
First crack: Since dividends are, by definition, part of GDP (and WP), you can't have dividends higher than WP!
P.
PIERRE LEMIEUX
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