Is inequality increasing?

Abstract

In academic economics, inequality has received little attention in recent decades, although popular concerns about the super-rich have grown. The World Top Incomes Database provides evidence of the rise of the super-rich in many countries since 1980. Thomas Piketty has publicised the new data, predicting increases in inequality due to the return to capital exceeding the rate of economic growth and advocating policies to counter such increases by high taxes on the income and wealth of the super-rich. This article asks why inequality has been a neglected topic, assesses empirical contributions and Piketty's model and discusses implications for evidence-based policies.