19 Pages Posted: 4 Mar 2015 Last revised: 18 Mar 2015
Date Written: March 2, 2015
Piketty's Capital in the 21st Century has attracted more attention than it perhaps deserves given that its main empirical claim, that wealth inequality is bound to occur in "capitalist" economies because the rate of return r is greater than the rate of economic growth g (r > g), is not rigorously shown and explicitly excludes capital losses. Over the last few centuries, returns in the United States have varied greatly by asset class and often been highly negative. Moreover, while the book correctly maintains that recent increases in income inequality in the United States are due to poor corporate governance, it calls for a general wealth tax rather than governance reform.
Keywords: Thomas Piketty; Capital in the 21st Century; wealth inequality; income inequality; corporate governance; rates of return
JEL Classification: D63, G3, N11, N12, N21, N22 , O15, P1
Suggested Citation: Suggested Citation