A writer for the Financial Times took a hard look at some of Piketty's wealth data and found some problems. His conclusion is that Piketty is wrong. Others, including Paul Krugman, call for more explanation by Piketty of why he made the data manipulation choices that he made. At the same time, they doubt that Piketty's main conclusions have been refuted. Its all a big controversial mess in academia. Read Krugman's take here:
Is Piketty All Wrong? - NYTimes.com
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ReplyDeleteI really appreciate FT and Chris Giles' effort, painstakingly taking a detailed look at the actual statistics and finding incoherencies. FT is making the discussion over inequality much more rigorous, data driven, and constructive; a level of discussion that has much more sophistication and nuance than what I have seen so far, and I see this as a very favorable development.
ReplyDeleteWith that said, after reading Professor Piketty's detailed response of Giles' claims, I don't think these statistical inconsistencies are sufficient grounds for rejecting Pietty's main thesis, that income and wealth inequality is rising around the world due to the structural differences between labor and the owners of capital. Piketty cites in his response much more up to date inequality data that reinforce Piketty's conclusions which was unavailable during the time he was writing the book. Moreover, I actually think Piketty's data actually understate inequality quite a bit because his estimates on wealth concentration do not fully take into account offshore wealth.
http://blogs.ft.com/money-supply/2014/05/23/piketty-response-to-ft-data-concerns/
the consistent criticisms of piketty's work has provided nuanced analyses of the buzz word "income inequality" by several academic and non-academic economists. Gile's conclusion that wealth inequality has been stagnant for decades perhaps requires a more holistic scrutiny of labor versus owners of capital differences.
ReplyDeleteHikaru, I think your point about having sufficient grounds to reject Piketty's main thesis is spot on. Even though Piketty's data is not all correct (which is probably impossible by the way), his findings and booked have sparked a debate that should have started over a decade ago, if not earlier.
ReplyDeleteI think controversy is good and mainly if it leads to us talking about inequality and many other issues that need to be addressed. Even if there data is not perfect, I still think Piketty makes some interesting arguments...
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