Not just r > g but r + q >> g: Piketty meets Ricardo in the long run of Indian history

Developing Economics

Wealth-income ratios are rising everywhere – they are not cyclical but rather unambiguously upward trending for the past three decades. Put simply, the accumulation of wealth is outpacing economic growth. This is true in America, Europe and Japan (Piketty and Zucman 2014), as well as China and Russia (Novokmet, Zucman & Yang 2018). In recent research (Kumar 2018), I found this same trend to persist in the world’s largest democracy – Indian wealth-income ratios have been rising since the 1970s. Why are these trends so similar in countries with such deep structural differences and distinct economic trajectories? By themselves, high wealth-income ratios are not necessarily a social dilemma – they may imply more wealth for everyone. But in general, there is a tendency for wealth to be more concentrated than income. As a result, a rise in wealth over income tends to increase wealth inequality. This is certainly the…

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The long run evolution of the rich in India 1937-2012

Developing Economics

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Inequality in India may be returning to levels last seen during British Rule. To understand this, it is necessary to put India’s elite at the center of macro-history.

One of the central questions in political economy is how wealth evolves, particularly at the top. In Europe and the USA, we now accept that progression of wealth inequality followed a “U” shape or what has been called the “Inverted Kuznets Curve.” Briefly put, on the eve of World War I, the richest few percentiles dominated Western society with their massive wealth holdings. Fast forward to a decade after World War II and we see that their wealth declined substantially, but then started rising again in the late 1970s. Much has been written on this since (and due to) the publication of Piketty’s (2014) Capital in the 21st Century. My new and revised paper (Kumar, 2017b) puts the rich…

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Upcoming talks in New York City

Tomorrow (10/25) I will be delivering a talk on wealth concentration in India at the NSSR Macro Lunch at The New School.

Location: Room D1008, 6 E 16th Street, New York from 12:30-2PM

November 3rd, I will be speaking as part of the Inequality Lecture Series at the City University of New York (CUNY) Stone Center/Luxembourg Income Study.

Location: Room 9204, CUNY Graduate Center from 3:30 – 5PM