Forecasting the wealth inequality of tomorrow: Is Thomas Piketty right?

No Thumbnail Available

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.

Authors

Date

2020

Department

Taloustieteen laitos

Major/Subject

Mcode

Degree programme

Taloustiede

Language

en

Pages

24

Series

Abstract

After the release of Thomas Piketty’s Capital in the 21st century, the issue of rising economic inequality has got widespread attention, as well in the mainstream media as in academic discussion. In his work Piketty charts the evolution of the magnitude and distribution of wealth through the history and predicts rising wealth inequality in the upcoming century. This thesis is a literacy review that attempts to offer reader a comprehensive summary of Piketty’s ideas about the evolution of wealth inequality. In this paper, I review Piketty and his associates’ empirical findings regarding the magnitude and distribution of wealth and the role of inherited wealth over almost three centuries. In addition, I summarise the theory with which Piketty attempts to explain the findings: the two fundamental laws and central contradiction of capitalism. I also shortly review the academic discussion related to Piketty’s work and summarise, in my consideration, the three most important pieces of critique towards Piketty’s theory. I find that according to Piketty, wealth-income ratio, the level of wealth concentration and the share of inherited wealth in aggregate wealth was high before 1900s, decreased 1910-1970 and began rising again after 1970. I also find that many authors see Piketty’s theory inadequate to plausibly predict rising inequality.

Description

Thesis advisor

Murto, Pauli
Mustonen, Mikko

Keywords

wealth inequality, Piketty, distribution of wealth, inherited wealth

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202009275611

Collections

[kand] Kauppakorkeakoulu / BIZ