Summary of Testing Piketty’s Hypothesis on the Drivers of Income Inequality
Evidence from Panel VARs with Heterogeneous Dynamics
A new study challenges the findings of Capital in the Twenty-First Century.
Income inequality is a concern around the world. Experts and policy makers from both the right and the left vigorously debate what, if anything, to do about it. Economist Thomas Piketty offered a big-picture analysis of the issue in his best-selling Capital in the Twenty-First Century, in which he found that wealth begets greater wealth, worsening inequality. Economist Carlos Góes attempts to tease out the validity of Piketty’s thesis and arrives at a different conclusion. getAbstract recommends his innovative but esoteric effort to ground Piketty’s historical observations in contemporary data.
In this summary, you will learn
- Why new research undermines part of Thomas Piketty’s central thesis
- Whether inequality arises from shocks to the relationship between returns and growth
- What other causes might explain income inequality
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