Saturday, May 31, 2014

John Quiggin — How Thomas Piketty found a mass audience, and what it means for public policy

Thomas Piketty’s phenomenally successful Capital confirms that Western countries are becoming less equal. John Quiggin looks at how he fits into a long-running debate about inequality, and finds some encouraging signs.
Inside Story (Australia)
How Thomas Piketty found a mass audience, and what it means for public policy
John Quiggin | Professor of Economics and ARC Laureate Fellow at the University of Queensland

See also, Piketty nitpicking at the Drum.
What can ordinary readers, without the capacity to do their own replications, make of all this? 
[1] The first point, true of all research, is not to put too much weight on a single study, however prominently it is reported. This was probably the biggest problem with the Reinhart-Rogoff piece: the most extreme interpretations of the results, suggesting that a debt/GDP ratio over 90 per cent would lead to disaster, got the most attention, even though the relatively small research literature on the topic did not support such a conclusion (as an aside, the ratio for Australia is around 15 per cent).

This is less of a problem for Piketty. His book reflects a huge literature on the inequality of income and wealth, in which various lines of evidence on changes in inequality have been presented, and vigorously criticised over the past few decades....
[2] Second, we need to distinguish nitpicks over trivial points from disagreements over major issues. Most of the problems raised by Giles are nitpicks ....

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