Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality

Charles Jones

Journal of Economic Perspectives, 2015, vol. 29, issue 1, 29-46

Abstract: Since the early 2000s, research by Thomas Piketty, Emmanuel Saez, and their coauthors has revolutionized our understanding of income and wealth inequality. In this paper, I highlight some of the key empirical facts from this research and comment on how they relate to macroeconomics and to economic theory more generally. One of the key links between data and theory is the Pareto distribution. The paper describes simple mechanisms that give rise to Pareto distributions for income and wealth and considers the economic forces that influence top inequality over time and across countries. For example, it is in this context that the role of the famous r - g expression is best understood.

JEL-codes: C46 D31 D63 P16 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/jep.29.1.29
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Citations: View citations in EconPapers (194)

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Working Paper: Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality (2014)
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