Readings:
Branko Milanovic, Peter H. Lindert, and Jeffrey G. Williamson (2010): Pre-Industrial Inequality http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2010.02403.x/abstract
Thomas Piketty and Gabriel Zucman (2014): Capital Is Back: Wealth-Income Ratios in Rich Countries 1700–2010 http://qje.oxfordjournals.org/content/129/3/1255.full.pdf
Claudia Goldin and Lawrence Katz (2008): The Race between Education and Technology. Chapter 8: The Race between Education and Technology.
Jason Long and Joseph Ferrie (2013): Intergenerational Occupational Mobility in Great Britain and the United States since 1850 https://www.aeaweb.org/atypon.php?return_to=/doi/pdfplus/10.1257/aer.103.4.1109
https://www.icloud.com/keynote/0LvoKeQzg11t3SWw7NbOyYONA
Memo Question: Inequality: In an economy with constant returns to scale, perfect competition, symmetric information, and no externalities—neither physical externalities in production nor psychological externalities in consumption—the market equilibrium can be thought of as the maximum of a social welfare function in which each individual's weight is proportional to the inverse of their marginal utility of wealth. Thus if everybody (say) has the same utility function that is logarithmic in wealth, the market's implicit social welfare function will weigh each person by their wealth when it makes its interpersonal utility tradeoffs. Pick one paper. What light does it shed on whether the market's implicit social welfare function is a sensible one to maximize?
Memo Question: American Exceptionalism: Donaldson and Hornbeck dispute Robert Fogel's conclusion that an expanded system of canals would have substituted well for America's late-19th century railway network. What economic and historical arguments do Donaldson and Hornbeck make to buttress their point? Would Fogel have found it convincing? If not, why not?
Warm-Up:
- Looking Back (5 min): Main lessons from last time
- Today (5 min): Interesting points from reaction essays
Core:
- (10 min) Overview
- (5 min) Issues and questions
- (20 min) Milanovic et al.:
- Why is this paper being written?
- What are the main arguments?
- What are the major pieces of evidence?
- Why won't those who think differently be convinced?
- Who is right?
- (20 min) Piketty and Zucman:
- Why is this paper being written?
- What are the main arguments?
- What are the major pieces of evidence?
- Why won't those who think differently be convinced?
- Who is right?
- (20 min) Goldin and Katz:
- Why is this paper being written?
- What are the main arguments?
- What are the major pieces of evidence?
- Why won't those who think differently be convinced?
- Who is right?
- (20 min) Long and Ferrie
- Why is this paper being written?
- What are the main arguments?
- What are the major pieces of evidence?
- Why won't those who think differently be convinced?
- Who is right?
Cool-Down:
- Looking Forward (5 min): Next time
- Looking Forward (5 min): Next reaction question