The Economics Show Rethinking income inequality, with Chris Giles
Aug 5, 2024
Chris Giles, an economics commentator for the Financial Times, joins to discuss new research challenging the prevailing views on income inequality in the US over the last 75 years. They dive into the contentious methodologies that highlight discrepancies in income data, especially regarding the top 1%. The conversation touches on how government spending impacts different income groups and presents diverse perspectives on the issue. Giles emphasizes the importance of debate in economics for refining understanding and pushing the field forward.
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Piketty vs. Giles
- Chris Giles received a review copy of Piketty's book and initially found its data useful.
- Later, he discovered significant discrepancies between Piketty's UK wealth inequality figures and official data, leading to a public disagreement.
The Inequality Debate
- Two US government economists, Gerald Orton and David Splinter, challenge established views on income inequality.
- They argue that US income inequality hasn't risen as much as claimed by academics like Piketty, Saez, and Zukman.
Methodology of Inequality Measurement
- Both groups of economists use tax return data to measure income inequality, focusing on the top 1%.
- Adjustments are needed to make this data relevant to society, leading to methodological disagreements.