Income inequality revisited 60 years later: Piketty vs Kuznets

Abstract

This paper compares two popular views on the evolution of income inequality. The one of Simon Kuznets, which was published in American Economic Review in 1955, considers inequality as a byproduct of economic growth and suggests that a relatively rich economy should be also less unequal. On the contrary, Thomas Piketty shows that inequality is progressing, and an internationally coordinated policy is required in order to place inequality under control. We apply the arguments of Kuznets and Piketty to the problem of income inequality in modern Russia.