Piketty's problem

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Does everyone remember that 26-year-old MIT graduate student Matthew Rognlie and his challenge to Piketty? Well, he's getting more press:

Rognlie's blockbuster rebuttal to Piketty is that "recent trends in both capital wealth and income are driven almost entirely by housing." Software, robots, and other modern investments all depreciate in price as fast as the iPod. Technology doesn't hold value like it used to, so it's misleading to believe that investments in capital now will give rich folks a long-term advantage.

Land/housing is really one of the only investments that give wealthy people a long-term leg up.

The piece concludes with a look toward housing rather than taxation:

If Rognlie is correct and we really care about inequality, it might be wiser to redirect anger towards those who get in the way of new housing, rather than rely on taxes to solve our problems.

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This page contains a single entry by cognitivedissident published on April 1, 2015 12:16 PM.

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