Rognlie also makes important critiques of Piketty's argument.[1] Piketty makes strong claims resting on declining labor share of capital. This is true, but is d

Rognlie also makes important critiques of Piketty's argument.[1] Piketty makes strong claims resting on declining labor share of capital. This is true, but is driven largely by an increase in owner-occupied rents in real estate, which suggests interpretations very different from Pikettys; namely that redistribution in the form of zoning and development restrictions has been the key driver rather than changes in the relative value of productive capital. From Rognlie's abstract: >>> Overall, the net capital share has increased since 1948, but when disaggregated this increase comes entirely from the housing sector: the contribution to net capital income from all other sectors has been zero or slightly negative, as the fall and rise have offset each other. When decomposed into a return on fixed assets and a residual share of pure profits, the fall and rise of capital income outside the housing sector in the US owes mostly to the residual: it is not paralleled by fluctuations in the measured value of non-housing capital. This observation—combined with the theory of factor substitution, and simulation results from a multisector model—casts doubt on explanations of changes in the net capital share that rely on changes in the value of capital. There is greater support in the data for narratives that emphasize cyclical and trend variation in market power. For a summary in layman's terms, I'd suggest Noah Smith in [2]. Note that Noah has Keynesian sympathies and is not particularly right leaning. [1] https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... [2] https://www.bloomberg.com/view/articles/2015-03-27/piketty-s-three-big-mistakes-in-inequality-analysis https://www.bloomberg.com/view/articles/2015-03-27/piketty-s...