Measurement without theory, and theory without measurement: What's wrong with Piketty's capital in the XXI century?

Abstract

Thomas Piketty's (2014) Capital in the XXI Century analyzes distributions of income and wealth in a set of developed countries and their determinants, from the nineteenth century to the present. The objective is a bold one, made even more so by the fact that Piketty pursues it not only from a theoretical, but also from an empirical point of view. The task is particularly impressive not only because of the enormous effort required in organizing data, but also because it entails attaching a deterministic interpretation to facts and figures from radically different countries, over a time span that covers almost two centuries. This study argues that the empirical ‘methods and concepts’ adopted by Piketty are not always consistent with those coming from his reference theoretical framework, nor from National Accounts (United Nations, 2009).