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Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)

Author

Listed:
  • B. Garbinti
  • J. Goupille-Lebret
  • T. Piketty

Abstract

This paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series for France over the 1800-2014 period. We find a large decline of the top 10% wealth share from the 1910s to the 1980s, mostly to the benefit of the middle 40% of the distribution. Since the 1980s-90s, we observe a moderate rise of wealth concentration, with large fluctuations due to asset price movements. In effect, rising inequality in saving rates and rates of return pushes toward rising wealth concentration, in spite of the contradictory effect of housing prices. We develop a simple simulation model highlighting how the combination of unequal saving rates, rates of return and labor earnings leads to large multiplicative effects and high steady-state wealth concentration. Small changes in the key parameters appear to matter a lot for long-run inequality. We discuss the conditions under which rising concentration is likely to continue in the coming decades.

Suggested Citation

  • B. Garbinti & J. Goupille-Lebret & T. Piketty, 2017. "Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014)," Working papers 633, Banque de France.
  • Handle: RePEc:bfr:banfra:633
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2017. "Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality," NBER Working Papers 23805, National Bureau of Economic Research, Inc.
    2. Philippe Aghion & Ufuk Akcigit & Matthieu Lequien & Stefanie Stantcheva, 2017. "Tax Simplicity and Heterogeneous Learning," NBER Working Papers 24049, National Bureau of Economic Research, Inc.
    3. Kuhn, Moritz & Schularick, Moritz & Steins, Ulrike I., 2018. "Income and Wealth Inequality in America, 1949-2016," Working Papers 9, Federal Reserve Bank of Minneapolis, Opportunity and Inclusive Growth Institute.
    4. Boehl, Gregor & Fischer, Thomas, 2017. "Capital Taxation and Investment: Matching 100 Years of Wealth Inequality Dynamics," Working Papers 2017:8, Lund University, Department of Economics.
    5. Piketty, Thomas & Yang, Li & Zucman, Gabriel, 2017. "Capital Accumulation, Private Property and Rising Inequality in China, 1978-2015," CEPR Discussion Papers 12410, C.E.P.R. Discussion Papers.
    6. repec:bfr:rueban:2018:55 is not listed on IDEAS
    7. Florian Botte & Laurent Cordonnier & Thomas Dallery & Vincent Duwicquet & Jordan Melmies & Franck Van de Velde, 2017. "The cost of capital: between losses and diversion of wealth
      [Le coût du capital : entre pertes et détournement de richesses]
      ," Working Papers hal-01711157, HAL.
    8. Böhl, Gregor & Fischer, Thomas, 2017. "Can taxation predict US top-wealth share dynamics?," IMFS Working Paper Series 118, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    9. Moritz Kuhn & Moritz Schularick & Ulrike I. Steins, 2017. "Income and Wealth Inequality in America, 1949-2016," CESifo Working Paper Series 6608, CESifo Group Munich.
    10. Bertrand Garbinti & Jonathan Goupille-Lebret & Thomas Piketty, 2017. "Income Inequality in France, 1900-2014: Evidence from Distributional National Accounts," Working Papers 201704, World Inequality Lab.

    More about this item

    Keywords

    saving rate; steady-state; wealth inequality.;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-

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