New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals

Presented by Joseph Stiglitz, Paul Krugman, Duncan Foley, and Branko Milanovic at Columbia Law School. Inequality has become one of the major talking points amongst economists since the advent of Thomas Piketty’s book Capital in the Twenty-First Century. Piketty argues in the book that the main driver of inequality—the tendency of returns on capital to exceed the rate of economic growth—threatens to generate extreme inequalities that stir discontent and undermine democratic values. He calls for political action and policy intervention.

[stutzpunkt]

Like kids in a sandbox playing with Piketty's data.

Love it!

[ilmaurizetazetaerre]

thank God there is Paul Krugman to dot the i's and cross the t's: there is a gap between what is commonly perceived of Piketty's book and what is actually in his book.

[distopiadnb]

On Stiglitz on the elasticity of substitution: there's a noticeable contemporary example of an economy where the elasticity is above unity - China. See Whalley and Xing, "The Sustainability of Chinese Growth" CESifo papers, N° 3736, Feb 2012.

[MrEmerek]

Have you considered making this available for download on itunes?

[MaximHarper]

Commenting for reference, Krugman on Flow of Funds land data: 1:9:21

[smartiepancake]

I'd like to hear what the Georgists think of Krugman's low land value figures.

[gchernya]

Problem of inequality is an obvious false dilemma. It is not important in any sense that someone has billions of dollars (one can think about them as personalized depositories of money). Yes, they are not stressed about the immediate future like the rest of us, but that is where distinction mostly ends. The real problem of modern times is state of affairs that leaves one third of population out of workforce, and lower income part of employed in the precarious state. This outsized part of the population views secure position of well off as increasingly enviable and yet factually unobtainable. Fair to say is that this state of affairs was normal for the most time in the industrial society. There are two key differences – members of the new precarious class came from the “middle” class background instead of peasantry or paupers; and recent past or 1940ththrough 1960th suggest opposite state of things. Explanation why in recent past things were so much better is not complicated, also will take little more than 12 minutes to explain the anomaly.  What needs to be done is probably not monetary redistribution, but painstaking creation of sustainable economic structure for the people who are for various reasons not making much money. If you are poor you should not:
1)work in abusive work environment that is the threat to your sanity or general health
2)meet increased hardship in obtaining work when you looking for one
3)live in substandard, dangerous of excessively worn housing
4)live in the neighborhoods drowning in the (unreported) quality of life crime
5)have no power to curb inconsiderate behavior of other people in the neighborhood, as well as government structures including law enforcement
6)face extreme poverty in the old age
7)be obligated to send your kids in the unsafe, substandard or underfunded schools
8)pay disproportionate share of taxes
9)have your services curtailed because of society failure to fund them
10)being unable to attend college because if you graduated from one you would compete with the children of more well off people
All what being poor is supposed to be is inability to buy new or nice things. To put things in the right prospective it is quite possible that higher taxes or higher inflation need to be deployed, along with the range of other things including, but not limited a new constitution.  

[janewalerud]

it seems the correlation between parents and children's social class  - including income, education, membership in the royal academies,  and a high status profession - is about 0.73. 

Mårten Palme has written a paper on data from four generations in Sweden, from the parents of people born about 100 years ago to the people getting their educations now. Please note that Sweden has implemented a number of policies to increase social mobility, and yet the data do not show any effect of all those policies on social mobility. There are, of course, excellent effects in public health, education levels, quality of life in many dimensions, but social mobility... not so much. 

Gregory Clark has collected data based on surnames in several countries over almost the last 1000 years. UK, Sweden, even China ( who slaughtered much of their elite)... same results. Something like 0.73 correlation between parents and children. 

That level of coloration means that it takes about 10-15 generations for a high status person's descendants to regress to the mean, or for a low status person's descendents to regress to the mean ( climb the ladder). 

In every generation, there are about 20% of newcomers in the elite. Theirs are the stories we like to talk about and celebrate. Unfortunately, they are anecdotes.