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Saturday, May 24, 2014

'Is Piketty All Wrong?'

Guess I should post something on the Piketty data controversy (please feel free to post links to additional discussion in comments). This is Paul Krugman:

Is Piketty All Wrong?: Great buzz in the blogosphere over Chris Giles’s attack on Thomas Piketty’s Capital in the 21st Century. Giles finds a few clear errors, although they don’t seem to matter much; more important, he questions some of the assumptions and imputations Piketty uses to deal with gaps in the data and the way he switches sources. Neil Irwin and Justin Wolfers have good discussions of the complaints; Piketty will have to answer these questions in detail, and we’ll see how well he does it.
But is it possible that Piketty’s whole thesis of rising wealth inequality is wrong? Giles argues that it is...
OK, that can’t be right — and the fact that Giles reaches that conclusion is a strong indicator that he himself is doing something wrong.
I don’t know the European evidence too well, but the notion of stable wealth concentration in the United States is at odds with many sources of evidence. ... [discusses several sources]...
The point is that Giles is proving too much; if his attempted reworking of Piketty leads to the conclusion that nothing has happened to wealth inequality, what that really shows is that he’s doing something wrong.
None of this absolves Piketty from the need to respond to each of the individual questions. But anyone imagining that the whole notion of rising wealth inequality has been refuted is almost surely going to be disappointed.

    Posted by on Saturday, May 24, 2014 at 08:59 AM in Economics | Permalink  Comments (84)

          


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