61–70 of 325 posts
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Why would it contradict Piketty's theory? Housing is capital. This post seems to respond to the theory that wealth inequality is caused by the rise of automation. That has nothing to do with Piketty's theory.
Capital and land are different: you can make more capital to compete against existing capital, you can't really make more land.
Wonderful talk. One thing he called for was a wealth tax, which is something that makes complete sense but is going to be very unpopular. On the otherhand, he also calls for progressive income taxes (something that is reported by the media and an easier pill to swallow) - in my country, Canada, progressive income taxes are not the answer IMHO. We didn't have as much inequality for education (i.e. lots of decent Unive…
If paired with fiscal stimulus, there might not even be any negative GDP consequences.
In any event, over the last few years wealth effect has shown to have very little effect on GDP.
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Capital and land are different: you can make more capital to compete against existing capital, you can't really make more land.
How do you make capital?
Wikipedia says: "In economics, capital goods, real capital, or capital assets are already-produced durable goods or any non-financial asset that is used in production of goods or services." (https://en.wikipedia.org/wiki/Capital_(economics))
So, you just produce it in a factory or at home etc.
See also http://www.investopedia.com/ask/answers/051115/what-capital-... and https://en.wikipedia.org/wiki/Capital_formation
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Some people believe central banks are essentially printing money right now (since 2008, so for nearly a decade). Why has inflation not picked up?
'Long run' in economist-speak means multiple decades, generally. But to answer your question directly, it's because the financial crisis and the massive deleveraging it caused effectively sucked a lot of money from the world economies. In the absence of QE we would've seen a painful, grinding deflation like Japan went through during the 90s. Central banks can print money to increase the monetary base, but that's dire…
In the interest of giving the fuller discussion: Picketty's book has been out for a while now. It is good economics. It deserves rightful praise, and scrutiny. Acemoglu and Robinson's answer[1] is also good economics. Digestible podcast form here [2]. It purports that Picketty's "r>g" model is flawed. It also deserves a reading. All of this is part of a larger discussion, which C21 started. r > g doesn't seem to expl…
>>> Overall, the net capital share has increased since 1948, but when disaggregated this increase comes entirely from the housing sector: the contribution to net capital income from all other sectors has been zero or slightly negative, as the fall and rise have offset each other. When decomposed into a return on fixed assets and a residual share of pure profits, the fall and rise of capital income outside the housing sector in the US owes mostly to the residual: it is not paralleled by fluctuations in the measured value of non-housing capital. This observation—combined with the theory of factor substitution, and simulation results from a multisector model—casts doubt on explanations of changes in the net capital share that rely on changes in the value of capital. There is greater support in the data for narratives that emphasize cyclical and trend variation in market power.
For a summary in layman's terms, I'd suggest Noah Smith in [2]. Note that Noah has Keynesian sympathies and is not particularly right leaning.
[1] https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...
[2] https://www.bloomberg.com/view/articles/2015-03-27/piketty-s...
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Why would it contradict Piketty's theory? Housing is capital. This post seems to respond to the theory that wealth inequality is caused by the rise of automation. That has nothing to do with Piketty's theory.
Capital and land are different: you can make more capital to compete against existing capital, you can't really make more land.
https://en.wikipedia.org/wiki/Land_reclamation_in_Hong_Ko ng
http://basementgeographer.com/reclaimed-land-in-singapore-na...
This still doesn't really work as a counter-point for what you mention; capital and land are different.
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> We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income). You'll see most economists advocating a consumption tax, instead. > quantitive easing pumping up asset prices while doing nothing for the real economy Both the "pumping up asset prices" and "while doing nothing for the real economy" is extremely disputable. It's kind of pompous of you to think you know better than th…
In some sense I agree with you. And it seems that, anyway, the big multinationals can find ways to squirrel away their profits without having to pay much, if any, taxes anyway. So in this way corporate taxes hit the SMB's while the big boys get a free pass.. However, one argument against lowering corporate taxes I've seen is that it would incentivize people to skirt around their personal taxes by "using" corporations…
http://www.ird.govt.nz/business-income-tax/expenses/vehicle-...
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what is the importance of that? can you inform me of any historical instances of currency being redeemed for its face value of gold?
It wasn't very long ago. Up until 1968, dollars were convertible into gold and pegged at $35 / oz [1], meaning the government intervened to keep it at that price. From 1968-1971, the US still honored that rate with other countries, but stopped intervening in the private gold market [2]. Then the US left the gold standard, and everyone else followed suit. [1] https://en.wikipedia.org/wiki/History_of_the_United_States_…
I would like to know of a historical example of when a significant (meaning large quantity, high economic impact) exchange of dollar denominated treasury notes were redeemed for their face value in gold metal. did that ever even happen? I'm unaware of any instances of that, but then, I'm not a scholar in the field.
Wonderful talk. One thing he called for was a wealth tax, which is something that makes complete sense but is going to be very unpopular. On the otherhand, he also calls for progressive income taxes (something that is reported by the media and an easier pill to swallow) - in my country, Canada, progressive income taxes are not the answer IMHO. We didn't have as much inequality for education (i.e. lots of decent Unive…
Exactly. We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income). Taxing productive activity is literally counter-productive. This will only become a more pressing issue once automation (esp. of the transport industry) gets into full-swing. Eventually we won't have a choice in the matter. There are a whole host of current issues that are culminating in wealth and income dist…
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I wonder whether it is considered good or bad behaviour to point out incorrect spelling, but it is Piketty, not Picketty
This was kind of bugging me. It's one thing for one person to make the mistake once, but there's something like a 4:1 ratio of Picketty:Piketty in these comments. On one hand it seems like a nitpicky thing to point out, but on the other hand, to paraphrase Lieutenant Commander Data: one is his name; the other is not [1]. [1] https://www.youtube.com/watch?v=nqwx2XFb1fQ