From Krusell and Smith:
There has been some confusion on this point. The K&S note is worth reading in its entirety (it's short).![]()
We emphasize, first, that Piketty's predictions are not mere extrapolations from past data but, instead, rest importantly on the use of economic theory. This is important, since for the predictions to be reliable, one would want to feel some comfort in the particular theory that is used.
There has been some confusion on this point. The K&S note is worth reading in its entirety (it's short).