David R. Henderson  

Piketty Bleg

Landfills as Inventories... Why no Kansas miracle?...

I'm putting the finishing touches on my review of Piketty in the next few days and he makes reference to something that I don't think exists. I'm wondering if that's just because I don't know how to make my way through his Technical Appendix or if he just slipped and forgot to put something in his Technical Appendix.

My guess is that some of you have worked your way through the Technical Appendix and might be able to tell me. On page 514, Piketty, discussing economists who have been critical of taxes on capital, writes:

Some economists have an unfortunate tendency to defend their private interest while implausibly claiming to champion the general interest.55

Then his footnote 55, on page 640, states:
For example, by using abstruse theoretical models designed to prove that the richest people should pay zero taxes or even receive subsidies. For a brief bibliography of such models, see the online technical appendix.

But my look at his online technical appendix yields no such bibliography. I'm guessing that it refers to work by, among others, my Hoover colleague Ken Judd. But I don't know.

So here's my request:

Can you find in his technical appendix such a bibliography? If so, are you willing to tell me how to find it?

Please, if you have comments on Piketty's use of the ad hominem in the above, save them. That's not what I'm interested in. I'm interested in solving my problem.

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COMMENTS (5 to date)
Grieve Chelwa writes:

Hi David, I also had a similar question with regards to the missing references associated with that footnote. So I wrote Piketty an email and he responded. Below is a text of the email I sent to him and his response. Hope it's resolves your problem (I've also pasted this to your Facebook page):

Dear Prof Piketty
Greetings from South Africa...A quick question: Footnote 55 from Chapter 14 says: "For example, by using abstruse theoretical models designed to prove that the richest people should pay zero taxes or even receive subsidies. For a brief bibliography of such models, see the online technical appendix".

I've looked at the appendix to Chapter 14 but I can't see the listing of the bibliography that the above footnote refers to. Am I missing something?

Best regards,

Dear Grieve, what I had in mind was the zero-capital-tax (or sometime negative-capital-tax) literature referred to in the bibliography of Piketty-Saez "A Theory of Optimal Capital Taxation" (see appendix to chapter 15; see also the references in the Piketty-Saez-Stantcheva paper referred to in appendix to chapter 14), but I agree that this should be clarified. Best, Thomas

Steve Reilly writes:

He might mean the bibliography at the end of this paper, as well as the discussion in the paper starting page 4. The link to the paper is on page 6 of the technical appendix. http://piketty.pse.ens.fr/files/PikettySaez2012.pdf

Of course it's not really saying that some economists claim that the richest should receive subsidies.

David R. Henderson writes:

Thanks, Grieve and Steve. (I had to go for that rhyme.) That 2012 paper is indeed the right cite.

Eric Falkenstein writes:

He probably meant Mirrlees' various papers from the 70s and its descendants. It's not famous like the Laffer curve, but they are well known theoretical results.

Diamond, Peter A., and James A. Mirrlees. "Optimal taxation and public production I: Production efficiency." The American Economic Review (1971): 8-27.

Kocherlakota, Narayana R. "Zero expected wealth taxes: A Mirrlees approach to dynamic optimal taxation." Econometrica 73.5 (2005): 1587-1621.

Steve Ambler writes:

Given that Piketty thinks of the rich as deriving most or all of their income from capital, I believe he's thinking of the rather large literature on optimal capital taxation in dynamic models with agents that have infinite horizons. You're right in referring to work by Judd. The locus classicus would be Chamley (IER 1985). See also Chamley (Econometrica 1986), Judd (JPubE 1985), Judd (JPE 1987), Zhu (JET 1992) and many others. See Atkeson, Chari and Kehoe (Minneapolis Fed Quarterly Review 1999) for a paper that takes the policy implications very seriously.

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