Capital in the 21st Century

On 19th December, CEPR and the Bank of England hosted a joint workshop to discuss Thomas Piketty’s seminal work ‘Capital in the 21st Century’. Chaired by the Bank’s Chief Economist Andy Haldane, the panel comprised Peter Lindert, Jaume Ventura, Orazio Attanasio and Tim Besley, each of whom spoke on inequality and related issues, and Thomas Piketty, who responded to each presenter. The panel presentations were on:

– Where Has Modern Equality Come From? Lucky vs. Smart Paths in Economic History

– The Metamorphosis of Capital in the 21st Century

– Inequality in Earnings and Human Capital: When does it start? Intergenerational transmission of inequality

– Political Economy of Inequality

The panellists thus provided a variety of insights from economic history, growth theory, labour economics and public economics on the causes of inequality and the policy responses to current and future inequality trends in developed countries. More information about the event is available here.

In these exclusive Vox Views, CEPR spoke to three of the panel economists.

Thomas Piketty considers the societal and political institutions that need to be in place to prevent the extreme levels of inequality seen before the advent of the First World War, and the extrapolations that can be made about global inequality when taking into account data from emerging countries.

Tim Besley speaks about the historical policy responses to inequality, including the growth of the state vehicle used to pursue a common interest, and a fairer distribution of taxation to make state welfare more efficient. Besley argues for a systemic reform of the taxation system, segmented by housing and income, to improve the fairness and efficiency of taxation.

Peter Lindert is sceptical of a return to the levels of inequality seen in the 19th Century. Indeed, he prescribes to the idea that unrepeatable political shocks are responsible for current inequality. Lindert goes on to consider the effect of automation of technology in permanent shifts of the labour market. He also considers the persistence of equality in rich East Asian countries where policies of redistributive taxation are not pursued.

CEPR is grateful to Thomas Piketty, Andy Haldane, Peter Lindert, Jaume Ventura, Orazio Attanasio and Tim Besley for their participation in this workshop, and to CEPR’s Research Director Kevin Hjortshøj O’Rourke for his efforts in organising this event.

This article is published in collaboration with VoxEU. Publication does not imply endorsement of views by the World Economic Forum.

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Authors: Orazio Attanasio is a Professor at the University College London. Tim Besley is a Professor of Economics and Political Science at the London School of Economics. Andrew G Haldane is the Chief Economist and Executive Director for Monetary Analysis & Statistics at the Bank of England. Peter Lindert is Distinguished Professor of Economics at the University of California. Kevin Hjortshøj O’Rourke is a Chichele Professor of Economic History for All Souls College at the University of Oxford and Programme Director at CEPR. Thomas Piketty is a Professor at the Paris School of Economics and CEPR. Jaume Ventura is a Senior Researcher at CREI and an International Macroeconomics Programme Director at CEPR.

Image: U.S. one dollar bills blow near the Andalusian capital of Seville. REUTERS/Marcelo Del Pozo.