The Missing Wealth of Nations: Are Europe and the U.S
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Econ 133 - Global Inequality and Growth
Econ 133 - Global Inequality and Growth Introduction Gabriel Zucman [email protected] 1 Econ 133 - Global Inequality and Growth Gabriel Zucman Roadmap 1. What is this course about? 2. Inequality and growth in the history of economic thought 3. Course organization: grading, readings, etc. 4. Overview of the five main parts of the course - 2 - Econ 133 - Global Inequality and Growth Gabriel Zucman 1 What is this course about? 1.1 What you've learned in Econ 1 or 2 Market economies are efficient: • Any competitive equilibrium is Pareto-efficient • Limit 1: assumes no market failures • Limit 2: says nothing about how resources will be distributed at the equilibrium - 3 - Econ 133 - Global Inequality and Growth Gabriel Zucman 1.2 Econ 133: an introduction to economics, but putting distribution at the center stage • How unequal is the world? • What are the forces that push toward equality and inequality? • How does inequality change as countries grow? • What policies can foster equitable growth? - 4 - Econ 133 - Global Inequality and Growth Gabriel Zucman 1.3 Inequality is at the center of research, policy, and the public debate • Rising inequality in many countries • Barack Obama: \Inequality is the defining challenge of our time" Inequality is an important subject for: • Everybody • Economists in universities, academia, think thanks, banks... • Policy-makers in governments & international organizations - 5 - Econ 133 - Global Inequality and Growth Gabriel Zucman 2 Inequality & growth in the history of economic thought 2.1 Thomas Malthus • Essay on the Principle of Population, 1798 • Iron law of wages: population grows ! labor supply increases ! wages fall to subsistence levels • End outcome: misery for the masses, revolution • To prevent this: limit population growth - 6 - Econ 133 - Global Inequality and Growth Gabriel Zucman 2.2 David Ricardo • Principles of Political Economy and Taxation, 1817 • Scarcity principle: if pop. -
Global Wealth Inequality
EC11CH05_Zucman ARjats.cls August 7, 2019 12:27 Annual Review of Economics Global Wealth Inequality Gabriel Zucman1,2 1Department of Economics, University of California, Berkeley, California 94720, USA; email: [email protected] 2National Bureau of Economic Research, Cambridge, MA 02138, USA Annu. Rev. Econ. 2019. 11:109–38 Keywords First published as a Review in Advance on inequality, wealth, tax havens May 13, 2019 The Annual Review of Economics is online at Abstract economics.annualreviews.org This article reviews the recent literature on the dynamics of global wealth https://doi.org/10.1146/annurev-economics- Annu. Rev. Econ. 2019.11:109-138. Downloaded from www.annualreviews.org inequality. I first reconcile available estimates of wealth inequality inthe 080218-025852 United States. Both surveys and tax data show that wealth inequality has in- Access provided by University of California - Berkeley on 08/26/19. For personal use only. Copyright © 2019 by Annual Reviews. creased dramatically since the 1980s, with a top 1% wealth share of approx- All rights reserved imately 40% in 2016 versus 25–30% in the 1980s. Second, I discuss the fast- JEL codes: D31, E21, H26 growing literature on wealth inequality across the world. Evidence points toward a rise in global wealth concentration: For China, Europe, and the United States combined, the top 1% wealth share has increased from 28% in 1980 to 33% today, while the bottom 75% share hovered around 10%. Recent studies, however, may underestimate the level and rise of inequal- ity, as financial globalization makes it increasingly hard to measure wealth at the top. -
Capital Is Back: Wealth-Income Ratios in Rich Countries 1700-2010
Capital is Back: Wealth-Income Ratios in Rich Countries 1700-2010 Thomas Piketty Gabriel Zucman Paris School of Economics Paris School of Economics July 26, 2013⇤ Abstract How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970-2010 national balance sheets recently compiled in the top eight developed economies. For the U.S., U.K., Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise of wealth-income ratios in recent decades, from about 200-300% in 1970 to 400-600% in 2010. In e↵ect, today’s ratios appear to be returning to the high values observed in Europe in the eighteenth and nineteenth centuries (600-700%). This can be explained by a long run asset price recovery (itself driven by changes in capital policies since the world wars) and by the slowdown of productivity and population growth, in line with the β = s/g Harrod-Domar-Solow formula. That is, for a given net saving rate s = 10%, the long run wealth-income ratio β is about 300% if g = 3% and 600% if g = 1.5%. Our results have important implications for capital taxation and regulation and shed new light on the changing nature of wealth, the shape of the production function, and the rise of capital shares. ⇤Thomas Piketty: [email protected]; Gabriel Zucman: [email protected]. We are grateful to seminar par- ticipants at the Paris School of Economics, Sciences Po, the International Monetary Fund, Columbia University, University of Pennsylvania, the European Commission, the University of Copenhagen, and the NBER summer institute for their comments and reactions. -
Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality
Journal of Public Economics 162 (2018) 89–100 Contents lists available at ScienceDirect Journal of Public Economics journal homepage: www.elsevier.com/locate/jpube Who owns the wealth in tax havens? Macro evidence and implications for ☆ T global inequality Annette Alstadsætera, Niels Johannesenb, Gabriel Zucmanc,d,* a Norwegian University of Life Sciences, Norway b CEBI, University of Copenhagen, Denmark c UC Berkeley, United States d NBER, United States ARTICLE INFO ABSTRACT Keywords: Drawing on newly published macroeconomic statistics, this paper estimates the amount of household wealth Inequality owned by each country in offshore tax havens. The equivalent of 10% of world GDP is held in tax havens Wealth globally, but this average masks a great deal of heterogeneity—from a few percent of GDP in Scandinavia, to Tax evasion about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies. We use these Tax havens estimates to construct revised series of top wealth shares in ten countries, which account for close to half of JEL classification: world GDP. Because offshore wealth is very concentrated at the top, accounting for it increases the top 0.01% H26 wealth share substantially in Europe, even in countries that do not use tax havens extensively. It has considerable H87 effects in Russia, where the vast majority of wealth at the top is held offshore. These results highlight the E21 importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world. 1. Introduction statistics, we do not have a clear view of who uses tax havens. -
The Silicon Six
The Silicon Six and their $100 billion global tax gap December 2019 © Fair Tax Mark 2019 About the Fair Tax Mark The Fair Tax Mark certification scheme was launched in - regulators, investors and municipalities across the UK in 2014, and seeks to encourage and recognise the globe have expressed a desire to support Fair organisations that pay the right amount of corporation tax Tax Mark accreditation (or equivalent) in their at the right time and in the right place. Tax contributions jurisdictions; are a key part of the wider social and economic contribution made by business, helping the communities - there is in many parts of the world an ongoing in which they operate to deliver valuable public services international race to the bottom on tax, and and build the infrastructure that paves the way for growth. this creates a downward pressure on standards everywhere (including in the UK); and More than fifty businesses have now been certified in the UK, including FTSE-listed PLCs, co-operatives, - if no action is taken by civil society, unscrupulous social enterprises and large private business – which accounting and auditing entities will step into the between them have over 7,000 offices and outlets. vacuum and propagate low-bar tax kitemarks. We operate as a not-for-profit social enterprise and believe that companies paying tax responsibly should Further information at: be celebrated, and any race to the bottom resisted. • Website: www.fairtaxmark.net To date, the Fair Tax Mark’s activities have been focused on the UK; however, a new suite of international • Phone: (within UK) 0161 7690427 / standards is now under development. -
The Wealth of Nations by Adam Smith
an INQUIRY into the Nature and Causes of the — Books I, II, III, IV and V — Wealth of Nations Adam Smith p q xΜεταLibriy Copyright © 2007 ΜεταLibri this digital edition ALL RIGHTS RESERVED. No part of this digital edition may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, eletronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the copyright holder. ΜεταLibri http://metalibri.incubadora.fapesp.br Amsterdam • Lausanne • Melbourne Milan • New York • São Paulo 29th May 2007 IN this edition references are made to corresponding pages of the best mod- ern edition of the WealthEditorial of Nations: the Note second volume of The Glasgow Edition of the Works and Correspondence of Adam Smith [1]. These refer- ences are printed as margin notes. For example, ‘G.ed.p26’ means ‘page 26 of the Glasgow Edition’. Smith’s own footnotes are marked with ‘[Smith]’ in bold face just before the footnote. Paragraph number are printed inside brackets on the left margin and the numbering restarts at the beginning of every section. References to this edition can be made in this way: Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Edited by S. M. Soares. MetaLibri Digital Library, 29th May 2007. SÁLVIO MARCELO SOARES Lausanne, 29th May 2007 [email protected] CONTENTS Editorial Note iii Advertisement to the Third Edition 2 Advertisement to the Fourth Edition 3 Introduction and Plan of the Work 4 BOOK I Of The Causes of Improvement in the Productive Powers -
240 Years of the Wealth of Nations 240 Anos De a Riqueza Das Nações
DOI: http://dx.doi.org/10.1590/0103-6351/3743 240 years of The Wealth of Nations 240 anos de A Riqueza das Nações Maria Pia Paganelli Trinity University Abstract Resumo Why should we read a book printed 240 Por que deveríamos ler um livro publicado há years ago? The book is old. Our circum- 240 anos? Trata-se de um livro antigo. Nossas stances and institutions are different. Its ex- circunstâncias e instituições são diferentes. Seus amples are dated. Its policies are irrelevant exemplos são datados. Suas recomendações de today. Its economic theories are full of mis- política são irrelevantes hoje. Suas teorias econô- takes. Even its political ideology is ambigu- micas estão repletas de erros. Mesmo a sua ideo- ous. So, why bother reading this old book? logia política é ambígua. Então, por que se dar ao trabalho de ler este velho livro? Keywords Palavras-chave Adam Smith; Wealth of Nations; wealth; Adam Smith; A Riqueza das Nações; riqueza; growth; justice. crescimento; justiça. JEL Codes B12; O10. Códigos JEL B12; O10. v.27 n.2 p.7-19 2017 Nova Economia� 7 Paganelli “Convictions are more dangerous enemies of truth than lies” Friedrich Nietzsche Why would anybody care to read a book that is almost two and a half centuries old? Better (or worse), why would anybody refer to – and yet not read – a book that is well over two centuries old? Or maybe I should ask: why should anybody read a book that is well over two centuries old? Age aside, the Wealth of Nations is also in many ways a dated book. -
Private Property Rights, Economic Freedom, and Well Being
Working Paper 19 Private Property Rights, Economic Freedom, and Well Being * BENJAMIN POWELL * Benjamin Powell is a PhD Student at George Mason University and a Social Change Research Fellow with the Mercatus Center in Arlington, VA. He was an AIER Summer Fellow in 2002. The ideas presented in this research are the author’s and do not represent official positions of the Mercatus Center at George Mason University. Private Property Rights, Economic Freedom, and Well Being The question of why some countries are rich, and others are poor, is a question that has plagued economists at least since 1776, when Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. Some countries that have a wealth of human and natural resources remain in poverty (in Sub-Saharan Africa for example) while other countries with few natural resources (like Hong Kong) flourish. An understanding of how private property and economic freedom allow people to coordinate their activities while engaging in trades that make them both people better off, gives us an indication of the institutional environment that is necessary for prosperity. Observation of the countries around the world also indicates that those countries with an institutional environment of secure property rights and highPAPER degrees of economic freedom have achieved higher levels of the various measures of human well being. Property Rights and Voluntary Interaction The freedom to exchange allows individuals to make trades that both parties believe will make them better off. Private property provides the incentives for individuals to economize on resource use because the user bears the costs of their actions. -
Changes in the Wealth of Nations (P
Federal Reserve Bank of Minneapolis Spring 1993 Changes in the Wealth of Nations (p. 3) Stephen L. Parente Edward C. Prescott Early Progress on the "Problem of Economic Development" (p. 17) James A. Schmitz, Jr. Federal Reserve Bank of Minneapolis Quarterly Review Vol. 17, No. 2 ISSN 0271-5287 This publication primarily presents economic research aimed at improving policymaking by the Federal Reserve System and other governmental authorities. Any views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. Editor: Arthur J. Rolnick Associate Editors: S. Rao Aiyagari, John H. Boyd, Warren E. Weber Economic Advisory Board: R. Anton Braun, John Geweke, Edward J. Green, Ellen R. McGrattan, James A. Schmitz, Jr. Managing Editor: Kathleen S. Rolfe Article Editor/Writers: Kathleen S. Rolfe, Martha L. Starr Designer: Phil Swenson Associate Designer: Beth Leigh Grorud Typesetters: Jody Fahland, Correan M. Hanover Editorial Assistant: Diane M. Sanborn Circulation Assistant: Cheryl Vukelich The Quarterly Review is published by the Research Department Direct all comments and questions to of the Federal Reserve Bank of Minneapolis. Subscriptions are available free of charge. Quarterly Review Research Department Articles may be reprinted if the reprint fully credits the source— Federal Reserve Bank of Minneapolis the Minneapolis Federal Reserve Bank as well as the Quarterly P.O. Box 291 Review. Please include with the reprinted article some version of Minneapolis, Minnesota 55480-0291 the standard Federal Reserve disclaimer and send the Minneapo- (612-340-2341 / FAX 612-340-2366). lis Fed Research Department a copy of the reprint. -
$7.6 Trillion $21-32 Trillion
NO EASY TASK: Quantifying Illicit Financial Flows The Financial Transparency Coalition works to curtail the whole range of illicit financial flows. Some FTC members focus on the cross-border movement of money that is illegal- ly earned, transferred, or utilized. These illicit financial flows come from tax evasion, trade manipulation, organized crime, and corrupt payments to public officials. Coalition members also address the wider aspects of illicit flows, including tax avoidance by multi- national companies. But pinpointing the scale of the problem is no easy task. Whether it’s using data to uncov- er trade misinvoicing, measuring the amount wealthy elites hide in secrecy jurisdictions, or quantifying how much corporations shift in profits to avoid tax, there’s a growing body of literature around illicit financial flows. No matter how you look at the data, one thing is clear: financial secrecy has turned illicit flows into a thriving business. HOW DO YOU QUANTIFY ILLICIT FINANCIAL FLOWS? TRADE & FINANCE DATA Lost By Developing Lost In 2013 Alone 1 And Emerging $7.8 Countries To Illicit Financial Flows $1.1 TRILLION (2004-2013) 1 TRILLION Trade misinvoicing, or moving money across borders in a commercial transaction while deliberately misreporting the value – a form of which is trade-based money laundering – is cited by Global Financial Integrity as the largest component of measurable illicit financial flows. To get to their global estimates on illicit financial flows, GFI combines the use of trade data to capture misinvoicing with an analysis of balance of payments data to identify when it looks like more money is leaving a country than what has been reported. -
Of Risks and Remedies: Best Practices in Tax Rulings Transparency.” Leandra Lederman Indiana University Maurer School of Law
FALL 2020 NEW YORK UNIVERSITY SCHOOL OF LAW “Of Risks and Remedies: Best Practices in Tax Rulings Transparency.” Leandra Lederman Indiana University Maurer School of Law September 29, 2020 Via Zoom Time: 2:00 – 3:50 p.m. EST Week 6 SCHEDULE FOR FALL 2020 NYU TAX POLICY COLLOQUIUM (All sessions meet online on Tuesdays, from 2:00 to 3:50 pm EST) 1. Tuesday, August 25 – Steven Dean, NYU Law School. “A Constitutional Moment in Cross-Border Taxation.” 2. Tuesday, September 1 – Clinton Wallace, University of South Carolina School of Law. “Democratic Justice in Tax Policymaking.” 3. Tuesday, September 8 – Natasha Sarin, University of Pennsylvania Law School. “Understanding the Revenue Potential of Tax Compliance Investments.” 4. Tuesday, September 15 – Adam Kern, Princeton Politics Department and NYU Law School. “Illusions of Justice in International Taxation.” 5. Tuesday, September 22 – Henrik Kleven, Princeton Economics Department. “The EITC and the Extensive Margin: A Reappraisal.” 6. Tuesday, September 29 – Leandra Lederman, Indiana University Maurer School of Law. “Of Risks and Remedies: Best Practices in Tax Rulings Transparency.” 7. Tuesday, October 6 – Daniel Shaviro, NYU Law School. “What Are Minimum Taxes, and Why Might One Favor or Disfavor Them?” 8. Tuesday, October 13 – Steve Rosenthal, Urban-Brookings Tax Policy Center. “Tax Implications of the Shifting Ownership of U.S. Stock.” 9. Tuesday, October 20 – Michelle Layser, University of Illinois College of Law. “How Place-Based Tax Incentives Can Reduce Economic Inequality.” 10. Tuesday, October 27 – Gabriel Zucman, University of California, Berkeley. “The Rise of Income and Wealth Inequality in America: Evidence from Distributional Macroeconomic Accounts.” 11. -
Political Economy in the Carolinas
POLITICAL ECONOMY IN THE CAROLINAS ere is a basic truth in the affairs of IS CAPITALISM men: there are pivotal people at pivotal Htimes. The great F. A. Hayek played SUSTAINABLE? that role when he wrote The Road to Serfdom, and of course Adam Smith played that role Michael Munger when he authored The Wealth of Nations, as Great Barrington, MA: American Institute for did John Maynard Keynes with The General Economic Research, 2019. Pp Theory and John Kenneth Galbraith with The 422. $18.00, hardcover. Af uent Society. In the late 1970s on TV and in the best-selling book Free to Choose, Milton Book Review by: Friedman emerged as the strongest voice Peter Boettke George Mason University for economic liberalism in his generation. Friedman had great charm on camera and felicity with the pen. He was also in possession of razor-sharp mind and quick wit. If there ever was a pivotal person at a pivotal time for economic liberalism, Friedman was that person in the economics profession and in the general intellectual culture from 1980 until his death in 2006. Since that time, a common question has been: who will be the next Milton Friedman? There are several contenders, but Michael Munger of Duke University would be on any list one could imagine. For the past thirty years, Munger has consistently explored the topics in this volume in academic and popular writing and in podcasts and video presentations. These topics include analyses of the market process,the political process, and the interaction between the political and market sectors.