I'm curious - does anyone else think that the equality that matters is equality in material outcomes? I think that would be such a boring world. The real equality that matters is equality in dignity as human beings, equality before the law, equality in our respect to each other. I think the developed world has made monumental strides on these fronts, which are spreading around the world too. (Even though, of course, there is still work to be done).
Incidentally, I think even though (as Piketty claims) inequality may be increasing, the average person (certainly in developed nations, but also in developing ones) has also been unimaginably enriched over the past 200 years. By any ethically relevant standard (access to food, shelter, heating, technology, entertainment), we live unbelievably fortunate lives. This when our ancestors a mere 3-4 generations ago were unspeakably poor.
Ah, economics. "There is little more than some apparent correlations the reader can eyeball in charts" - so, how does this compare to the actual standards of testing of competing theories in economy?
I'm not terribly surprised to find Mr. Goes has worked with the Cato Institute, one of a network of hundreds of policy think tanks worldwide under the Atlas Network and strongly tied to the Mont Pelerin Society with a very specific ideological agenda. Though it's curious Mr. Talley's brief note fails to mention those bona fides. Collectively, these institutions have been on the far side from truth on debates over tobacco, asbestos, leaded petrol and paint, the ozone hole, and now global warming.
This isn't to say that Mr. Goes' analysis is flawed, I've yet to look at it. But the glee with which it's being picked up by the Murdoch/Newscorp WSJ, and from a quick bit of DDGing, numerous bloggers and commentators, suggests a wee bit of bias could be present. The lack of substantive description of the study by Talley doesn't suggest much of strength either.
Certainly other IMF and World Bank economists have found Piketty credible.
https://www.atlasnetwork.org/partners/global-directory
https://www.atlasnetwork.org/partners/global-directory/cato-...
https://www.atlasnetwork.org/partners/global-directory/mont-...
https://www.worldcat.org/title/road-from-mont-pelerin-the-ma...
It seems to me obvious that it is rich people who own shares and property. Therefore if total income from capital grows faster than total income from labour, the gap between rich and poor will grow.
But I have to admit I don't really understand theory behind the opposite view. In particular, the article says "the data shows changes in the savings rate are likely to offset most of the effects of an increase in capital share of national income".
Is this saying that poor people will save more as capital returns grow, and this mostly compensates poor people for the relatively slow growth in wages?
Many of these kind of "studies" need the author to have actually witnessed at least one or twice how a person, man,woman, children, opening a trash bag looking for food, and then they'd know how the face of a hungry human being looks like.
Its economics, anything empiric is pretty thin on the ground.
Yes there is a sea of data, but none of it is complete.
Umm, send this to peer review. Here's the link to Góes actual paper(http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf) published as an IMF working report which doesn't even have the backing of the IMF/managers/etc. I doubt it'd get published if reviewed. Really, out of the centuries of data they could have pulled in, they chose to use 1980 through 2012? Return on the capital is not ~1%....flawed assumptions, flawed model IMHO. Amazing that WSJ parades it as if it were peer reviewed fact. Then again, I'm not an expert. I only did mathematical modeling for HPC systems, not economies.