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March 13, 2014

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Posted: 13 Mar 2014 12:03 AM PDT

A Relentless Rise in Unequal Wealth

Posted: 12 Mar 2014 08:47 PM PDT

Eduardo Porter:

A Relentless Rise in Unequal Wealth, by Eduardo Porter, NY Times:  What if inequality were to continue growing years or decades into the future? Say the richest 1 percent of the population amassed a quarter of the nation's income, up from about a fifth today. What about half? To believe Thomas Piketty of the Paris School of Economics, this future is not just possible. It is likely. In his bracing "Capital in the Twenty-First Century," which hit bookstores on Monday, Professor Piketty provides a fresh and sweeping analysis of the world's economic history that puts into question many of our core beliefs about the organization of market economies.

A Response to Another Attack on the Great Gatsby Curve

Posted: 12 Mar 2014 08:46 PM PDT

WCEG:

A response to another attack on the Great Gatsby curve—and can we call it the "line to serfdom" instead? By Carter Price:  Let me apologize up front for this wonky post. In a piece of analysis posted last month, Scott Winship and Donald Schneider attack the Great Gatsby curve, which illustrates the relationship between economic inequality and mobility across countries. Let me first say that I dislike the moniker "Great Gatsby Curve" (apologies to Alan Krueger) because I don't find it to be a very enlightening description of the effect. Therefore, I propose that we call this relationship the "line to serfdom," which is not only a more accurate description of the high inequality/low mobility relationship but also an allusion to Friedrich Hayek's classic tome of Austrian economics, "The Road to Serfdom." Winship and Schneider make three arguments against a consistent correlation between economic inequality and mobility across countries. Specifically: The Luxembourg Income Study's Gini Coefficient is a better measure of inequality than the World Bank's Gini coefficient (Gini coefficient is a measure of the income inequality, with higher numbers indicating a higher concentration of a country's income among the top earners). Rank correlation coefficients are a better measure of mobility than intergenerational elasticity. Recently released data indicates that the mobility trend has been relatively flat over time in the United States. I'll address each of these points below ...

Q&A: Thomas Piketty on the Wealth Divide

Posted: 12 Mar 2014 08:45 PM PDT

On inequality:

Q&A: Thomas Piketty on the Wealth Divide: Income inequality moved with astonishing speed from the boring backwaters of economic studies to "the defining challenge of our time." It found Thomas Piketty waiting for it.
A young professor at the Paris School of Economics, he is one of a handful of economists who have devoted their careers to understanding the dynamics driving the concentration of income and wealth into the hands of the few. He has distilled his findings into a new book, "Capital in the Twenty-First Century," which is being published this week. In the book, Mr. Piketty provides a sort of unified theory of capitalism that explains its lopsided distribution of rewards.
Eduardo Porter's Economic Scene column this week discusses Mr. Piketty's work. Following is the transcript of an email interview he conducted with Mr. Piketty last week, lightly edited for length and clarity. ...

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