Npiketty's book and macro models of wealth inequality videos

This video is either unavailable or not supported in this browser. In pikettys model, the modern decline in growth does not affect investment. This cartoon explains how the rich got rich and the poor got poor vox. The book claimed that deep economic forces were allowing the rich to amass a rising. This paper has been written as a chapter for the book the global ramifications of thomas pikettys capital in the 21st century, edited by heather boushey, bradford delong, and marshall steinbaum. You can read lengthy books on this subject, like economist thomas. William nordhaus explored that question by estimating a model of u. Imf working papers imf international monetary fund. Thomas pikettys capital in the twentyfirst century quantified the evolution of wealth inequality and concentration over time and across a number of countries. Thomas pikettys new book has been widely praised for its empirical contribution, but his prediction of rising inequality rests on economic theory. Pikettys book discusses several factors affecting wealth inequality.

Wealth inequality is back in the spotlight, but its determinants and the saving behaviour generating it are less clear. Piketty, arguably the worlds leading expert on income and wealth inequality, does more than document the growing concentration of income in the hands of a small economic elite. Thomas pikettys capital in the twentyfirst century puts forth a logically consistent explanation for changes in income and wealth inequality patterns. This column examines existing macroeconomic models of wealth inequality through the lenses of the facts and ideas in pikettys book. Pikettys book and macro models of wealth inequality. Connecting income to capital growth and potential inequality. However, i took from pikettys book that macro principles of inequality have to be studied over extended periods of time. How did piketty measure the wealth in each group 1%10%. Thomas pikettys book capital in the twentyfirst century is, in the authors own words, a book about the history of the distribution of income and wealth. The theory that piketty develops to interpret these data and. The evidence points to higher wage inequality, often attributed to new.

In this paper, i build a set of panel svar models to check if inequality and capital share in the national income move up as the rg. Many political leaders and pundits consider wealth inequality to be a major. There are many reasons economists believe wealth inequality is a bad. Consequently, now that return to capital investment exceeds the rate of growth, then inequality must inexorably increase. According to standard theory, the wealth income ratio would increase only modestly as. Pikettys book, capital in the twentyfirst century, discusses several factors affecting wealth inequality. Among other interesting and important facts, the book quantifies the evolution. Pikettys model of inequality and growth in historical. Pikettys book and macro models vox, cepr policy portal. I havent read the book, but does piketty note that a booming economy usually creates more inequality, and a. Its certainly possible to have a dramatic net loss in wealth in a given year if all your savings is. This column argues that pikettys pessimistic forecast is based on an extreme and unrealistic assumption about households saving behaviour.

However, while rich in data, the book provides no formal empirical testing for its theoretical causal chain. This model, he says, determines the fate of the twentyfirst century. Capital in the twentyfirst century, together with the broader research agenda of piketty and his coauthors, opens many doors by assembling new data on top income and wealth inequality. This paper studies the role of various forces affecting savings in quantitative models of wealth inequality.