The Problems with Piketty's Data

Abstract

The Law and Political Economy (LPE) movement frames itself as a legal retort to a “crisis” of rising inequality in the United States, and calls for corrective policy interventions through novel and heavily progressive forms of taxation. These proposals, in turn, are based upon the empirical claims of economist Thomas Piketty. I show that Piketty’s measurements tend to exaggerate the rise of inequality from the 1980s to the present due to uncorrected errors and dubious assumptions in his data construction. The LPE literature, in turn, has neglected to account for the many problems in Piketty’s data when enlisting it for prescriptive political ends.