Working Paper: NBER ID: w20232
Authors: Peter H. Lindert
Abstract: Thomas Piketty's monumental Capital in the Twenty-First Century has transported us to a higher understanding of historical movements in inequality. This essay ranks the promise of different paths that scholars can usefully follow from the point to which his book has guided us. The main path to follow is the income inequality history so well paved by Piketty and his team, supported by the book's history of twentieth-century shocks and political responses. Less promising is the book's emphasis on wealth, capital, and the rate of return. Following the income route to better inequality predictions requires merging his team's history of top income shares with the history of inequality movements within the lower 90 percent. It also invites a merger with other scholarship that has shown positive growth effects of the kind of democracy Piketty calls for.
Keywords: No keywords provided
JEL Codes: D31; D63; E01; H20; N10; N30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| historical movements in income inequality (D31) | current understandings of income inequality (D31) |
| historical shocks and political responses of the 20th century (N44) | income inequality metrics (D31) |
| top income shares (D33) | predictions about income inequality (D31) |
| type of democracy advocated by Piketty (D72) | positive growth effects (O49) |