As Ed already noted during the advent of Thomas Piketty’s not-so-revolutionary “Capital in the Twenty-First Century,” there are some serious fundamental flaws in the Piketty narrative in which modern economic growth has somehow ravaged the lower and middle classes while the upper echelons of society enjoyed the lion’s share of the benefits, and we are now supposedly in the midst of an income-inequality crisis. Piketty got very obviously picky and choosey with a whole lot of the data points he used to construct his arguments, and the Financial Times just did their own investigation into the exact math he employed. The results?
But, according to a Financial Times investigation, the rock-star French economist appears to have got his sums wrong.
The data underpinning Professor Piketty’s 577-page tome, which has dominated best-seller lists in recent weeks, contain a series of errors that skew his findings. The FT found mistakes and unexplained entries in his spreadsheets, similar to those which last year undermined the work on public debt and growth of Carmen Reinhart and Kenneth Rogoff. …
Prof Piketty, 43, provides detailed sourcing for his estimates of wealth inequality in Europe and the US over the past 200 years. In his spreadsheets, however, there are transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source.
For example, once the FT cleaned up and simplified the data, the European numbers do not show any tendency towards rising wealth inequality after 1970.
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