Thomas Piketty's Historical Macroeconomics

A Critical Analysis

Bibliographic Data

ID12229288
AuthorsGérard Duménil (corresponding author), Dominique Lévy
Year2016
Volume28
Issue2
Pages220-232
Publication date2016-03-16
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueReview of Political Economy (JOURNAL)
Journal identifiersISSN: 0953-8259 • E-ISSN: 1465-3982
PublisherTaylor & Francis (PUBLISHER • GB)
DOI10.1080/09538259.2015.1076280
OpenAlexW2331519118
LanguageEN
Citations received2
References cited5

There has been a great deal of interest in the data on income and wealth inequality collected by Thomas Piketty. This paper does not question that data; rather, it questions the framework of Piketty's analysis, both theoretically and empirically—namely the alleged upward tendency of the ratio of wealth to national income and the rise of wealth inequality. First, in the mechanism put forward, wealth can only grow as a result of savings, thus ruling out any form of price effect (as in urban land). Second, Piketty’s second law defines an asymptotical trajectory, in which variables grow in parallel, something incompatible with the rise of the ratio between two variables. In addition, Piketty’s model does not match data for the USA. The historical profile of the ratio of wealth/national income is actually the inverted image of the productivity of capital (the ratio of output/firms’ fixed capital). Doubts are also expressed concerning the dramatic fall of the ratio of wealth/national income in Europe around World War I

Capital (architecture · Capital income · Economic inequality · Economics · Inequality · Macroeconomics · Market economy · Measures of national income and output · National wealth · Neoclassical economics · Productivity · Economic theories and models · Economic Theory and Institutions · Economic Theory and Policy · Finance

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