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

Charles Jones

No 20742, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Since the early 2000s, research by Thomas Piketty, Emmanuel Saez, and their coathors 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: E0 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-his, nep-hpe, nep-mac and nep-pbe
Note: EFG LS PE
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Citations: View citations in EconPapers (10)

Published as Charles I. Jones, 2015. "Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality," Journal of Economic Perspectives, vol 29(1), pages 29-46.

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Journal Article: Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality (2015)
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