Housing Wealth?

[SofiaBourbon]

http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality?fsrc=scn%2Ftw%2Fte%2Fbl%2Fed%2Fnimbysinthetwentyfirstcentury

[EarlyStart]

There are a lot of other problems with Piketty.

Most egregiously, Piketty explicitly excludes “capital losses due to war, or of capital
gains and losses” which he assumes, wrongly, “were especially large in the twentieth century”
(p. 354). So r > g, if we ignore the inconvenient fact that r is sometimes negative 100. 

In addition to showing that g is sometimes much greater than r, or at least the returns on a major class of assets, the
exercise will also show that sometimes the rich suffer much greater investment losses than the non-rich.
Piketty of course realized that investors have suffered heavy losses at times but instead of attributing the losses to capitalism, whatever that is, he attributes it to the world wars and the Great Depression, as if they were somehow unique, exogenous shocks, and not simply obvious, recent examples in a long train of negative investment shocks.

Check out the table that shows r-g historically. source: http://poseidon01.ssrn.com/delivery.php?ID=596097013121100019066127000112123066063063059088049089096028116108100080088001093064036119005126028023035011068003010014065031114034029069015065017096079094096010018040126022065126096030072021001083124070121095071101089088004115087092108102124020&EXT=pdf

[arebelspy]

There are a lot of other problems with Piketty.

Most egregiously, Piketty explicitly excludes “capital losses due to war, or of capital
gains and losses” which he assumes, wrongly, “were especially large in the twentieth century”
(p. 354). So r > g, if we ignore the inconvenient fact that r is sometimes negative 100. 

In addition to showing that g is sometimes much greater than r, or at least the returns on a major class of assets, the
exercise will also show that sometimes the rich suffer much greater investment losses than the non-rich.
Piketty of course realized that investors have suffered heavy losses at times but instead of attributing the losses to capitalism, whatever that is, he attributes it to the world wars and the Great Depression, as if they were somehow unique, exogenous shocks, and not simply obvious, recent examples in a long train of negative investment shocks.

Check out the table that shows r-g historically. source: http://poseidon01.ssrn.com/delivery.php?ID=596097013121100019066127000112123066063063059088049089096028116108100080088001093064036119005126028023035011068003010014065031114034029069015065017096079094096010018040126022065126096030072021001083124070121095071101089088004115087092108102124020&EXT=pdf

The title of that paper is epic. Well done, authors.

[EarlyStart]

There are a lot of other problems with Piketty.

Most egregiously, Piketty explicitly excludes “capital losses due to war, or of capital
gains and losses” which he assumes, wrongly, “were especially large in the twentieth century”
(p. 354). So r > g, if we ignore the inconvenient fact that r is sometimes negative 100. 

In addition to showing that g is sometimes much greater than r, or at least the returns on a major class of assets, the
exercise will also show that sometimes the rich suffer much greater investment losses than the non-rich.
Piketty of course realized that investors have suffered heavy losses at times but instead of attributing the losses to capitalism, whatever that is, he attributes it to the world wars and the Great Depression, as if they were somehow unique, exogenous shocks, and not simply obvious, recent examples in a long train of negative investment shocks.

Check out the table that shows r-g historically. source: http://poseidon01.ssrn.com/delivery.php?ID=596097013121100019066127000112123066063063059088049089096028116108100080088001093064036119005126028023035011068003010014065031114034029069015065017096079094096010018040126022065126096030072021001083124070121095071101089088004115087092108102124020&EXT=pdf

The title of that paper is epic. Well done, authors.

Agreed. Very clever.