Making the Most of Capital in the 21st Century

24 Pages Posted: 23 Jun 2014

See all articles by Peter H. Lindert

Peter H. Lindert

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2014

Abstract

Thomas Piketty's monumental Capital in the Twenty-First Century has transported us to a higher understanding of historical movements in inequality. This essay ranks the promise of different paths that scholars can usefully follow from the point to which his book has guided us. The main path to follow is the income inequality history so well paved by Piketty and his team, supported by the book's history of twentieth-century shocks and political responses. Less promising is the book's emphasis on wealth, capital, and the rate of return. Following the income route to better inequality predictions requires merging his team's history of top income shares with the history of inequality movements within the lower 90 percent. It also invites a merger with other scholarship that has shown positive growth effects of the kind of democracy Piketty calls for.

Suggested Citation

Lindert, Peter H., Making the Most of Capital in the 21st Century (June 2014). NBER Working Paper No. w20232, Available at SSRN: https://ssrn.com/abstract=2457707

Peter H. Lindert (Contact Author)

University of California, Davis - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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