The Economist argues that with the importance of intellectual capital “privilege has become increasingly heritable.” As contributing factors the newspaper lists
In an NBER working paper, Charles Jones discusses Piketty’s famous r-g term in light of several simple and transparent macroeconomic models. Jones emphasises the role of the Pareto distribution and the difference between partial and general equilibrium reasoning. Importantly,
… exponential growth that occurs for an exponentially-distributed amount of time leads to a Pareto distribution.
Tyler Cowen points out in a blog post that price increases adjusted for changes in quality have differed substantially across product categories. Depending on the basket of goods and services one wishes to consider this gives rise to large differences in measured CPI inflation. Cowen suggests that low-income households experienced much stronger CPI increases for their relevant basket than high-income households. In other words, the commonly reported increase in income inequality severely underestimates the effective rise.
Markus Ackeret in the NZZ discusses a long-awaited Chinese government report on policy options to reduce wealth disparities. They include: Less manipulation of interest rates; more manipulation of wages; higher real estate taxes; higher dividend payments of government owned enterprises; changes in the legal status of workers moving from the countryside to the cities (hukou).