Inheritance flows in Sweden, 1810–2010

Jesper Roine, Henry Ohlsson, Daniel Waldenström 08 August 2014

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Thomas Piketty’s book Capital in the Twenty-First Century (Piketty 2014) has received enormous attention since its publication. A fundamental question raised is whether a person’s lifetime income is the result of his or her own efforts or, alternatively, founded on inheritance. Even for those who believe that inequality does not matter as long as it is based on one’s own effort, the potential of a return to high levels of inequality based on inheritance is a totally different matter. To many people, such a development would be much less acceptable than increased inequality per se.

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Topics:  Economic history Europe's nations and regions Poverty and income inequality

Tags:  Sweden, Inequality, inheritance, wealth, capital, capital accumulation

Is Piketty’s ‘Second Law of Capitalism’ fundamental?

Per Krusell, Tony Smith 01 June 2014

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Over the last several weeks, we have thought quite a bit about the main message in Thomas Piketty’s now world-famous book, Capital in the Twenty-First Century (Piketty 2014). We have also discussed it at great length with colleagues. In sum, at least in our departments, there has been a massive collective effort at interpreting both the material presented in the book and the background material on which the book builds. In this column we would like to present one perspective on the book that does not seem to have attracted sufficient attention in the public discussions.

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Topics:  Poverty and income inequality

Tags:  growth, Inequality, wealth, saving, savings

The chartbook of economic inequality

Tony Atkinson, Salvatore Morelli 26 March 2014

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Inequality – long ignored – is now centre stage in debate about economic policy around the globe. The 2007-2008 collapse of the global financial system and the subsequent economic downturn/debt crises have acted as a catalyst for growing anxiety around the increasing dispersion of incomes within most advanced economies. We are not “all in it together”.

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Topics:  Poverty and income inequality

Tags:  wealth, income, inequalities

The great escape from death and deprivation

Angus Deaton 20 March 2014

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Nearly 40 years ago, the demographer Samuel Preston (1975) wrote about changing patterns of life expectancy and income around the world. That paper set the agenda for thinking about global health and global wealth. Its key figure remains useful for describing past and current progress in health and wealth – where we have been and where we are going – as well as for looking at the great health catastrophes of the second half of the twentieth century.

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Topics:  Development Politics and economics

Tags:  wealth, health, inequalities

Tax policy in (and for) hard times

Michael Keen 16 October 2013

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Tax policy, like everything else, has been through tough times since the onset of the crisis. First, tax policy was to stimulate the economy (Heady 2011). Now it is to help consolidate the fiscal position – always with considerable urgency and all in the midst of public anger and disquiet.

What state has all this left our tax systems in? In the latest Fiscal Monitor (IMF 2013), my colleagues and I take a close look.

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Topics:  Macroeconomic policy Taxation

Tags:  Inequality, wealth, taxation, fiscal policy, fiscal consolidation, global crisis

Distributional consequences of natural-resource booms: Lessons from Australia

Sambit Bhattacharyya, Jeffrey G. Williamson 10 August 2013

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Commodity-price shocks have powerful but unequal effects on labour, capital and land. A large literature, often referred to as the ‘Dutch Disease’ literature, documents the effects of commodity booms on factors of production (Corden and Neary 1982). An increase in global commodity demand and a subsequent rise in commodity prices trigger a sharp rise in commodity exports. Typically, this causes an appreciation in the exporter’s real exchange rate which in turn harms competitiveness of other tradeable sectors, like agriculture and manufacturing.

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Topics:  Development International trade

Tags:  Inequality, wealth, income, Australia

Who lives longer?

Josep Pijoan-Mas, Víctor Ríos-Rull 30 September 2012

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Economists have long been worried about income inequality and its effects on welfare. For instance, workers with a college degree earn on average much more than those who did not complete high school. This disparity translates into large differences in consumption levels and hence welfare (see, for instance, Heathcote et al. 2010). We argue, however, that these welfare differences are dwarfed by the differences in longevity between individuals in different socioeconomic groups, and mainly by differences in longevity between individuals of different educational levels.

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Topics:  Education Health economics Poverty and income inequality

Tags:  education, wealth, health, life expectancy

Stock market wealth effects in emerging market countries

Heiko Hesse 16 October 2008

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There are a few channels through which asset price changes affect consumption. For instance, consumption depends on peoples’ expectations of wage income and equity price increases can signal higher income growth. Financial assets play a significant role in peoples’ permanent (life-cycle), income so changes in the stock market could have an effect on private consumption expenditure.

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Topics:  Financial markets

Tags:  wealth, emerging markets, stock markets

Cultural assimilation, cultural diffusion and the origin of the wealth of nations

Quamrul Ashraf, Oded Galor 13 September 2007

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At the start of the 2nd millennium CE, civilisations of Asia were arguably well ahead of European societies in both wealth and knowledge. By the 12th century, China employed water-driven machinery to make textiles and coke-based smelting to produce iron, technologies that would not appear in Europe for more than five hundred years. Yet, during the process of the Industrial Revolution, the technological leaders of the pre-industrial era were leapfrogged by European economies that accelerated into the modern age of sustained economic growth.

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Topics:  Economic history Productivity and Innovation

Tags:  wealth, cultural assimilation, cultural diffusion

The uncertain future of inheritance taxation

Graziella Bertocchi 15 July 2007

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One of Sarkozy’s electoral promises to the French people during his recent electoral campaign has been a drastic reduction of the inheritance tax. In a country where a wealth tax on large fortunes has been introduced as recently as 1989, this has undoubtedly been perceived as a substantial break with the past.

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Topics:  Taxation

Tags:  tax, inheritance, wealth