Capital and Wealth in the Twenty-First Century

David Weil

American Economic Review, 2015, vol. 105, issue 5, 34-37

Abstract: In Capital in the Twenty-First Century, Thomas Piketty uses the market value of tradable assets to measure both productive capital and wealth. As a measure of wealth this is problematic because it ignores the value of human capital and transfer wealth, which have grown enormously over the last 300 years. Thus the constancy of the wealth/income ratio as portrayed in his data is an illusion. Further, the types of wealth that he does not measure are more equally distributed than tradable assets. The approach also incorrectly identifies capital gains due to reduced discount rates as increases in the capital stock.

JEL-codes: E22 E23 E25 O41 O47 P16 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.p20151057
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Citations: View citations in EconPapers (17)

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