May 27, 2014

Krugman backpedals on his love for Piketty

Rarely has someone praised a book as much as Krugman did of Piketty's book on rising inequality. If you ever need to write a reference or review and need some superlatives quotes, his review is a great place to get ideas! Some nuggets from Krugman's review include: "magnificent", "sweeping meditation on inequality", "revolution in our understanding of long-term trends in inequality", "revelation", "This is a book that will change both the way we think about society and the way we do economics.", "the Piketty revolution", "an awesome work", "rigor of his capital analysis", "sheer, exhilarating intellectual elegance", "masterly diagnosis", "extremely important book on all fronts", and  "transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to."

Wow. Of course, Krugman's positive review isn't a surprise since Krugman has been talking inequality for decades. Now's he's got a big, thick tome from Piketty to back up his thesis.

But hold on -- seems there might be some funny business going on with Piketty's data. The Financial Times uncovered some issues that is making waves. Krugman in a remarkable post acknowledges this and says that Piketty will need to address this and that "we’ll see how well he does it." Quite a change from last month when Krugman said that anyone who sees problems with Piketty's data probably is wrong since Picketty's "done his homework!"  What makes this especially interesting is that Krugman led the charge during last year's economic data brouhaha when two economists were found to have made Excel errors in a well-known paper that claimed high debt levels led to lower growth.

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