The Unassuming Economist

From a book review by Barry Eichengreen:

“Conventional wisdom, shaped by the economist Thomas Piketty, holds that changes in the concentration of wealth among the richest people in advanced economies followed a U-shaped pattern over the past century: high at the outset, declining as a result of the Great Depression and World War II, and then rising in recent decades, owing to deregulation and the dilution of progressive taxation. Waldenstrom dissents, arguing that a more comprehensive analysis, incorporating data on real estate holdings and pension wealth, tells a different story. The wealth-to-GDP ratio rose without interruption over the past century, while the share of wealth held by those at the top of the income and wealth distribution showed a steady decline. Whereas the elites hold their assets mainly in stocks and bonds, the wealth of the masses lies mainly in their homes and pensions, which were neglected in earlier analyses. The property and pension wealth of the working class has grown faster over the last hundred years than the capital holdings of the elite. Waldenstrom insists that the century has been marked by the democratization of wealth, not spiraling inequality.”