Income Inequality : French economist appears to have got his sums wrong

[japantiger 4,077]

Thomas Piketty’s book, ‘Capital in the Twenty-First Century’, has been the publishing sensation of the year. Its thesis of rising inequality tapped into the zeitgeist and electrified the post-financial crisis public policy debate. 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 ofCarmen Reinhart and Kenneth Rogoff.

The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war. The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.

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. An independent specialist in measuring inequality shared the FT’s concerns..............Full article below:

http://www.ft.com/intl/cms/s/2/e1f343ca-e281-11e3-89fd-00144feabdc0.html#axzz32cWPabGO

What I also like is his response which is basically; even though my data doesn't support my conclusion; my conclusion is still right. I guess he can always get a job working for the IPCC:

[cptau 169]

He probably believes in those global warming models that don't work too.

[DKW 86 7,726]

I read a lot of the comments on Piketty's work for some time now. I kept getting the feeling that somehow he had either found some new fount of data or had some new insight into the structure of the modeling. IF this is true and i have to tell you i am not up to questioning the FT Research, all i have to say is OUCH! First, the VA falls apart for those sighting it as a paragon of virtue and now this. It has been an extra bad week for Krugman, an economist i easily find fault with.

[AUisAll 2]

Without lies, liberalism would never hold power.

[japantiger 4,077]

Without lies, liberalism would never hold power.

Bingo.

[japantiger 4,077]

Another interesting take on this author.

Why France is gloating over Piketty’s alleged errors

Self-satisfied cries of ‘‘we told you so’’ are wafting out of France in the wake of the first major backlash against ‘‘rock star economist’’ Thomas Piketty and his theories on rising inequality.‘‘ Piketty caught by The Financial Times’’ screams the headline in Le Point, whileJean-Marie Pottier asks in the French edition of Slate,‘‘Is Thomas Piketty completely mistaken?’” Even if Pottier cautioned ‘‘not so quick’’ to those tempted to throw out Piketty’s entire œuvre , the sense of deja-vu in Paris is palpable since the FT’s Chris Giles’ declared the findings of his book, Capital in the Twenty-First Century, were ‘‘undercut by errors’’ and ‘‘wrong sums’’ on inequality. Indeed, French media and economic commentators have been slow to record the phenomenal success of Piketty even as everyone from Nobel Prize-winning economist Paul Krugman to the IMF and the White House have lauded him. That’s partly because they’ve been skeptical all along. The FT’s investigation argues that Piketty’s central thesis, that inequality of wealth is now at levels not seen since before World War I, is not borne out by the data, at least in Europe. Last year, when the original French edition of Capital (at some several hundred pages longer) debuted, local critics, notably economist and historian Nicolas Baverez, made similar claims. An obsessive public chronicler of French economic decline, Baverez raised major issues with Piketty’s data collection and especially the ‘‘biased’’ interpretations of his figures, all well before the FT’s carefully researched demolition job. Writing in centre-right magazine Le Point, Baverez was the first to pin the Paris School of Economics professor for peddling Marxism de sous-préfecture or ‘‘provincial Marxism’’ based on dubious and ideologically-slanted analyses of statistics. “In Capital in the Twenty-First Century the economist reinvents the class struggle. But the figures that he puts forward contradict his theory !’’ said Baverez. Back then (before the FT), he noted that inequality of wealth in Europe and especially in France has actually reduced since the 1970s to levels well below pre-World War I.

Complete article:

http://qz.com/213328...alleged-errors/

[AURaptor 1,137]

I read a lot of the comments on Piketty's work for some time now. I kept getting the feeling that somehow he had either found some new fount of data or had some new insight into the structure of the modeling. IF this is true and i have to tell you i am not up to questioning the FT Research, all i have to say is OUCH! First, the VA falls apart for those sighting it as a paragon of virtue and now this. It has been an extra bad week for Krugman, an economist i easily find fault with.

The Liberal Dems are taking it on the chin over in Europe as well. Recent EU elections have been a big win for conservative parties, or those who favor a return to sovereign rule by their own country, to the overlord EU's outside influence.