Piketty's Capital - Implications for New Zealand - Dr Geoff Bertram - CHC

Data assembled by Bertram shows New Zealand’s stock of wealth follows a similar pattern to the countries in Piketty’s work. In particular, it had risen sharply in the 2000s, as households had taken “a decade or so” after the sudden rise in income inequality to watch their balance sheets either improve or decline. New Zealand’s wealth concentration was converging to the same level as those of the major world economies covered by Piketty. This was not surprising given that New Zealand’s economy was “as open as you can get” to foreign wealth, individuals and ideas. Also, the factors determining wealth inequality – such as the savings and growth rates – tended to become equalised in a globalised world. This implies that local policymakers who had contributed to New Zealand’s increased inequality – including politicians such as Roger Douglas and Ruth Richardson – were merely “riding the wave” of growing world inequality. “[Local] institutions and policies matter, but they are countervailing forces, not the prime drivers.”