FEW economics books have been as popular or as controversial as “Capital in the Twenty-First Century”. The blockbuster analysis of wealth and income distribution has been a publishing sensation, turning its French author, Thomas Piketty, into a household name. The book’s thesis, that wealth concentrates because the returns to capital are consistently higher than economic growth, has spawned furious debate. Mr Piketty’s preferred remedy (a progressive wealth tax) even more so. But amid the argument most commentators have agreed on one thing: “Capital” is an impressive piece of scholarship.In recent days that assessment has come into question. A scathing analysis by Chris Giles, economics editor of the Financial Times, claims Mr Piketty’s statistics on wealth distribution are undermined by a series of problems. Some numbers, he says, “appear simply to be constructed out of thin air”. Once apparent errors are corrected, some of Mr Piketty’s central findings—for instance, that wealth inequality has begun to rise over the past 30 years—no longer seem to hold. Thus, Mr Giles claims: “The conclusions of ‘Capital in the Twenty-First Century’ do not...
from The Economist: Finance and economics http://ift.tt/1rknX5d
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