Friday, May 30, 2014

Thomas Doubting Refuted

Paul Krugman, NYT
May 30, 2014 9:49 am

OK, Thomas Piketty has replied at length (pdf) to the attempted takedown of his work by Chris Giles, and done it very effectively. Essentially, Giles tried to compare apples and oranges, and the result was a lemon.

The central point here is one that’s familiar to anyone who works at length on inequality issues. We have two kinds of data on distribution of both income and wealth: surveys, in which people are asked what they make or own, and tax data. Survey data are better at describing lower-income families, who often aren’t covered by taxes; but they [the survey data] notoriously understate top incomes and wealth, roughly speaking because it’s hard to interview billionaires. Also, survey data start fairly recently — after World War II, and often much later than that.

(More here.)

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