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Friday, June 20, 2014

'Inequality in the Long Run'

Piketty and Saez (from the May issue of Science):

Inequality in the long run, by Thomas Piketty and Emmanuel Saez: The distribution of income and wealth is a widely discussed and contraoversial topic. Do the dynamics of private capital accumulation inevitably lead to the concentration of income and wealth in ever fewer hands, as Karl Marx believed in the 19th century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the 20th century? What do we know about how income and wealth have evolved since the 18th century, and what lessons can we derive from that knowledge for the century now under way? For a long time, social science research on the distribution of income and wealth was based on a relatively limited set of firmly established facts together with a wide variety of purely theoretical speculations. In this Review, we take stock of recent progress that has been made in this area. We present a number of basic facts regarding the long-run evolution of income and wealth inequality in advanced countries. We then discuss possible interpretations and lessons for the future. ...

    Posted by on Friday, June 20, 2014 at 12:24 AM in Economics, Income Distribution | Permalink  Comments (21)



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