Wealth and Inheritance in the Long Run

95 Pages Posted: 25 Sep 2014

See all articles by Thomas Piketty

Thomas Piketty

Paris School of Economics (PSE)

Gabriel Zucman

UC Berkeley

Date Written: July 2014


This article offers an overview of the empirical and theoretical research on the long run evolution of wealth and inheritance. Wealth-income ratios, inherited wealth, and wealth inequalities were high in the 18th-19th centuries up untilWorldWar 1, then sharply dropped during the 20th century following World War shocks, and have been rising again in the late 20th and early 21st centuries. We discuss the models that can account for these facts. We show that over a wide range of models, the long run magnitude and concentration of wealth and inheritance are an increasing function of r — g, where r is the net-of-tax rate of return on wealth and g is the economy's growth rate. This suggests that current trends toward rising wealth-income ratios and wealth inequality might continue during the 21st century, both because of the slowdown of population and productivity growth, and because of rising international competition to attract capital.

Keywords: distribution, income, wealth

JEL Classification: H00

Suggested Citation

Piketty, Thomas and Zucman, Gabriel, Wealth and Inheritance in the Long Run (July 2014). CEPR Discussion Paper No. DP10072. Available at SSRN: https://ssrn.com/abstract=2501546

Thomas Piketty (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014

Gabriel Zucman

UC Berkeley ( email )

579 Evans Hall
Berkeley, CA 94709
United States

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