Capital2

 

Piketty’s “Capital in the Twenty-First Century “ has got a lot of attention, and deserves praise for its detailed presentation of data on distribution of income and wealth over the longer run. However, the title of the book, mimicking one of the greatest classics ever in economics and social science, signals that the author has greater ambitions than just presenting statistics. He clearly also wants to comprehend what the driving forces behind – and implications of – his findings may be, and to do this a theoretical understanding of economic growth is required. In this comment the theoretical arguments underlying Piketty’s reasoning are presented and discussed. It is concluded that Piketty’s “Capital in the Twenty-First Century “ contains a lot of interesting information, but when it comes to comprehending what is going on, it does not live up to the expectations created by its title. To do that, the discussion of long run growth in the book would have had to be less ad hoc and more rigorous. Nevertheless, the book has succeeded in raising many interesting questions, not the least with respect inequality and economic growth, which deserve to be explored in more depth and discussed among economists and other social scientists.

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