Tuesday, October 14th, 2014 11:12 am

Piketty on Inequality

The most powerful force pushing towards greater wealth inequality in the US since the 1970s is the gap between the after-tax return on capital and the economic growth rate.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel
Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Disagree 9
Theoretically and empirically the case that r-g is a major determinant of inequality or even top inequality is weak.
-see background information here
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Disagree 5
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 7
Bio/Vote History
         
Autor David Autor MIT Disagree 9
Not clear yet if wealth inequality has risen in U.S: different data sources give different answers. Premature to identify cause of non-fact!
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Did Not Answer
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Disagree 4
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Did Not Answer
Bio/Vote History
         
Chetty Raj Chetty Harvard Uncertain 6
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 10
There are certainly a host of other factors related to technical change, other government policies and globalization.
Bio/Vote History
         
Currie Janet Currie Princeton Disagree 8
Many other factors affect inequality including technological change, globalization, increasing returns to education, and others.
Bio/Vote History
         
Cutler David Cutler Harvard Strongly Disagree 5
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Disagree 8
MAYBE IN THE FUTURE, BUT RIGHT NOW IT IS HIGH INCOMES THAT IS INCREASING WEALTH INEQUALITY.
Bio/Vote History
         
Duffie Darrell Duffie Stanford Uncertain 4
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Disagree 6
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Disagree 5
Don't find r-g a partiularly useful summary of anything (doesn't really capture role of technology, training, tax policy)
Bio/Vote History
         
Einav Liran Einav Stanford Uncertain 5
Bio/Vote History
         
Fair Ray Fair Yale Disagree 7
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Did Not Answer
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Disagree 5
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Disagree 2
lower taxes on K surely play a role. i disagree based on "most powerful" phrase. more research is necessary
Bio/Vote History
         
Hall Robert Hall Stanford Strongly Disagree 7
A glance at the biographies of the truly rich shows most came from upper middle class families. Good luck and some skill produced the wealth
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
I would imagine there are many factors: labor-saving technology, globalization,the decline of unions,lower tax rates.
Bio/Vote History
         
Holmström Bengt Holmström MIT Did Not Answer
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Strongly Disagree 10
Argument has poor theory & negligible empirics. Read pp7-9 of Acemoglu & Robinson. You need not even buy into their institutional arguments
-see background information here
-see background information here
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Agree 7
Bio/Vote History
         
Judd Kenneth Judd Stanford Strongly Disagree 9
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Strongly Disagree 10
Technology has been the primary driver.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Disagree 7
Argument nicely destroyed by Justin Wolfers (and many others). Too bad for the t-shirt makers
-see background information here
Bio/Vote History
         
Klenow Pete Klenow Stanford Disagree 5 Bio/Vote History
         
Levin Jonathan Levin Stanford Disagree 4
Saez-Zucman: wealth inequality shot up post 1986. Big cause: savings creates 0.4% annual wealth growth for bottom 90%, 3.4% for top 1%.
-see background information here
Bio/Vote History
         
Maskin Eric Maskin Harvard Disagree 7
Interest and growth rates are equlibrium phenomena--so even if they are important, there must be something deeper at work.
Bio/Vote History
         
Nordhaus William Nordhaus Yale Disagree 6
Is this an inside joke? BEA estimates show little change in rate of return.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Disagree 8
Income and savings inequality increases are now fueling US wealth inequality. Down the road r-g will be central as predicted by Piketty
Bio/Vote History
         
Samuelson Larry Samuelson Yale Uncertain 1
Many forces at work, both economic, social and political, making it difficult to identify one as most important.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Did Not Answer
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Disagree 4
The rapid rise in very high labor incomes seems to be much more important in the US.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Disagree 4
Perhaps technological change, globalization, and fiscal policy matter quite a bit?!
Bio/Vote History
         
Shimer Robert Shimer Chicago Strongly Disagree 8
Trends in U.S. wealth inequality are accounted for by trends in income inequality. See Section 3 of Krugman's review of Piketty.
-see background information here
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
A bug in the system prevents me from stating that I am 100% sure that I don't know the answer to this question.
Bio/Vote History
         
Udry Christopher Udry Yale Disagree 1
Difficult claim to evaluate, because both the return and the growth rate depend on savings, and on the distribution of wealth.
-see background information here
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

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