I bring been reading Thomas Piketty's "Capital inwards the 21st Century." It is genuinely an impressive work, too I am much enjoying it. I bring of late organized a session at the upcoming AEA coming together (January inwards Boston), where David Weil, Alan Auerbach, too I volition hold upward discussing the book, followed past times a answer from Professor Piketty.
Let me offering a few immediate reactions.
The mass has 3 original elements:
Point ii is highly conjectural. Economists are actually bad at such things. In particular, the leap from r>g to the determination of a growing utilisation of inheritance inwards monastic enjoin seems every bit good large to me. Many uppercase owners eat much of the furnish on their capital, so wealth does non grow at charge per unit of measurement r. This consumption ranges from fancy cars too luxurious vacations to generous charitable giving. In addition, unless mating is perfectly assortative, or nosotros furnish to an era of primogeniture, wealth per menage unit of measurement shrinks every bit it is carve upward amid children. So, from my perspective, Piketty tries to draw way every bit good much from r>g. (Quick Quiz for econonerds: (a) What does r>g say yous inwards a standard overlapping generations model? (b) And what is the magnitude of bequests inwards that model? Answers below.*)
Point 3 is every bit much most Piketty’s personal political philosophy every bit it is most his economics. As nosotros all know, yous can’t larn “ought” from “is.” Like President Obama too others on the left, Piketty wants to spread the wealth around. Another philosophical viewpoint is that it is the government’s project to enforce rules such every bit contracts too belongings rights too promote chance rather than to accomplish a item distribution of economical outcomes. No amount of economical history volition say yous that John Rawls (and Thomas Piketty) offers a improve political philosophy than Robert Nozick (and Milton Friedman).
The bottom line: You tin appreciate his economical history without buying into his forecast. And fifty-fifty if yous are convinced past times his forecast, yous don't bring to buy into his normative conclusions.
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* Answers to quiz: (a) That the economic scheme is dynamically efficient (that is, it has non over-accumulated capital). (b) Zero. Sumber https://gregmankiw.blogspot.com/
Let me offering a few immediate reactions.
The mass has 3 original elements:
- A history of inequality too wealth.
- A forecast of how things volition evolve over the side past times side century
- Policy recommendations, such every bit a global taxation on wealth.
Point ii is highly conjectural. Economists are actually bad at such things. In particular, the leap from r>g to the determination of a growing utilisation of inheritance inwards monastic enjoin seems every bit good large to me. Many uppercase owners eat much of the furnish on their capital, so wealth does non grow at charge per unit of measurement r. This consumption ranges from fancy cars too luxurious vacations to generous charitable giving. In addition, unless mating is perfectly assortative, or nosotros furnish to an era of primogeniture, wealth per menage unit of measurement shrinks every bit it is carve upward amid children. So, from my perspective, Piketty tries to draw way every bit good much from r>g. (Quick Quiz for econonerds: (a) What does r>g say yous inwards a standard overlapping generations model? (b) And what is the magnitude of bequests inwards that model? Answers below.*)
Point 3 is every bit much most Piketty’s personal political philosophy every bit it is most his economics. As nosotros all know, yous can’t larn “ought” from “is.” Like President Obama too others on the left, Piketty wants to spread the wealth around. Another philosophical viewpoint is that it is the government’s project to enforce rules such every bit contracts too belongings rights too promote chance rather than to accomplish a item distribution of economical outcomes. No amount of economical history volition say yous that John Rawls (and Thomas Piketty) offers a improve political philosophy than Robert Nozick (and Milton Friedman).
The bottom line: You tin appreciate his economical history without buying into his forecast. And fifty-fifty if yous are convinced past times his forecast, yous don't bring to buy into his normative conclusions.
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* Answers to quiz: (a) That the economic scheme is dynamically efficient (that is, it has non over-accumulated capital). (b) Zero. Sumber https://gregmankiw.blogspot.com/
