<story><title>Why Are Economists Giving Piketty the Cold Shoulder? (2017)</title><url>http://bostonreview.net/class-inequality/marshall-steinbaum-why-are-economists-giving-piketty-cold-shoulder</url></story><parent_chain></parent_chain><comment><author>mordymoop</author><text>Are we still talking about this? Within months of the book’s release, readers had found many examples where his data selections had been incomplete. To the extent that the main points were invalidated or made far less convincing. When you include the full data in his analysis, the main conclusions are drawn into question. There are many very thorough blog posts by economists you can easily Google.&lt;p&gt;It’d be like if Origin of Species came out, but evolution was actually wrong, and Darwin had only seemed right at first because he left out the species that didn’t fit his model.&lt;p&gt;I don’t think Piketty did this on purpose, by the way. He just didn’t push hard enough on the data that he didn’t want to find fault with.</text></comment>
<story><title>Why Are Economists Giving Piketty the Cold Shoulder? (2017)</title><url>http://bostonreview.net/class-inequality/marshall-steinbaum-why-are-economists-giving-piketty-cold-shoulder</url></story><parent_chain></parent_chain><comment><author>burlesona</author><text>This bit really struck me:&lt;p&gt;“Matthew Rognlie—then a doctoral student, now an assistant professor at Northwestern—took up that line in even greater detail in an article that eventually appeared in the Brookings Papers on Economic Activity, to which he added that the rising capital-to-income ratio in Piketty’s data is disproportionately the result of the price appreciation of certain scarce stores of wealth, primarily housing and the land it sits on, not the quantity accumulation of productive capital that is the subject of the neoclassical theory of economic growth.”&lt;p&gt;I find that a compelling explanation because it fits with a bunch of the deep problems in the way urban development changed in the 20th century, which in turn have created the frustrating housing situation today.&lt;p&gt;It’s difficult to summarize this, but in short, modern zoning, the suburban development pattern, and auto dependency, create an economic vicious cycle which tends to polarize economic outcomes, where Places trend toward either the Bay Area or Detroit. (Some reading linked below)&lt;p&gt;This is most true in the US, but also to varying degrees in many other parts of the world.&lt;p&gt;In other words, if Rognlie’s quote is true, then it would mean Picketty’s observations are better explained by the bad housing and infrastructure policies of the last 80 years than by “r &amp;gt; g”, and if that’s true then it completely changes what we should do about it.&lt;p&gt;Some expansion on the development pattern problems:&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;journal&amp;#x2F;2016&amp;#x2F;10&amp;#x2F;23&amp;#x2F;portland-housing-prices&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;journal&amp;#x2F;2016&amp;#x2F;10&amp;#x2F;23&amp;#x2F;portland-hous...&lt;/a&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;journal&amp;#x2F;2018&amp;#x2F;9&amp;#x2F;17&amp;#x2F;austins-codenext&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;journal&amp;#x2F;2018&amp;#x2F;9&amp;#x2F;17&amp;#x2F;austins-codene...&lt;/a&gt;&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;the-growth-ponzi-scheme&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.strongtowns.org&amp;#x2F;the-growth-ponzi-scheme&lt;/a&gt;</text></comment>