New French Book on Growing Inequality

It sounds like Thomas Piketty, who is French, has written an important book about the trends of distribution of wealth and income in 20th-21st century economies, primarily in developed economies.  The general story is that the “natural” rate of accumulation of capital is on the order of five-six percent per annum, while the natural rate of overall growth in GDP in advanced economies is 1-1.5 percent annually.   Thus, without major changes in political institutions, inherited private wealth will dominate the societies in advanced economies by virtue of the tendencies inherent in them.

I was alerted to Piketty by this column in the NYT:

Questions that will have to await reading of the book include the following.  (1) How independent is the rate at which private capital accumulates of political institutions?  That is, the implication is that capital will accumulate, over the long run, at five-six percent annually, when redistributive mechanisms are below some threshold.  What is the threshold?  (2) How independent are the rates of capital and GDP growth from the rate of population growth?  This second question is almost certainly not addressed in the book, but, in general, I think that macroeconomics should attempt to incorporate demographic analysis.  More generally, I speculate that those who are interested in reducing inequality of wealth and income should also be interested in reducing the human population, both within advanced economies of larger nation states and globally.

An introduction to the book by Piketty himself on French television can be seen here:


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