Capital and Wealth in the 21st Century

NBER Working Paper No. 20919

Issued in January 2015

NBER Program(s):Economic Fluctuations and Growth



In Capital in the 21st Century, Thomas Piketty uses the market value of tradeable assets to measure both productive capital and wealth. As a measure of wealth this is problematic because it ignores the value of human capital and transfer wealth, which have grown enormously over the last 300 years. Thus the constancy of the wealth/income ratio as portrayed in his data is an illusion. Further, the types of wealth that he does not measure are more equally distributed than tradeable assets. The approach also incorrectly identifies capital gains due to reduced discount rates as increases in the capital stock.

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Document Object Identifier (DOI): 10.3386/w20919

Published: Weil, D. (2015). Capital and Wealth in the Twenty-First Century. The American Economic Review, 105(5), 34-37.

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