10/20/14

Top 3 Piketty Takeaways You Won't Find Elsewhere

I was traveling for a few months over the summer and I decided that I would use the time to read Thomas Piketty’s Capital in the 21st Century. All 700 pages of it, no excuses. At the time I didn’t know that it was The Most Unread Book of the Summer, or that I could have gleaned most of the same insights by reading a few reviews. Here are three:  

1) Justin Fox: Always very well written 
2) Justin Wolfers: Very good wonky criticism 
3) Matt Yglesias: In four bullet points! 

Now you have my Top 3 Piketty Review Recommendations. Here are my top 3 Piketty takeaways that you (probably) won't find elsewhere: 


1) War is Great for Equality 


Piketty is a definitely a data guy; probably more important than the book are the datasets he assembled on wealth using tax records, extending back to the 19th century in Britain, Germany, and Sweden, and all the way to the French Revolution in France. Capital is full of graphs, but most of them tell the same simple story:

10/2/14

Why Monetary Policy is Really One Big Conspiracy


On Tuesday I attended a lecture by David Miles, a member of the British Monetary Policy Committee, the UK equivalent of the US Federal Open Markets Committee, aka, the Fed, on “Giving Guidance On Future Monetary Policy In A Very Uncertain World.” 

I realize that all sounds absolutely fascinating to most people, so perhaps it’s better to rephrase as “On Tuesday I attended a lecture about how to make what is arguably the most important decision in the world by one of the people who makes it.”  

The Lecture, in a Nutshell 


Miles spent most of the lecture demonstrating that, because of economic uncertainty, it’s more or less impossible to make accurate macroeconomic forecasts and therefore to predict the optimal course of interest rates, and concluded that to avoid flip-flopping central bank pronouncements should be as substantive as possible while leaving room for uncertainty. In other words, they should be vague, which is, more or less, exactly where we are today.