Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216597 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8201
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Rising income inequality since the 1980s in the United States has generated a substantial increase in saving by the top of the income distribution, which we call the saving glut of the rich. The saving glut of the rich has been as large as the global saving glut, and it has not been associated with an increase in investment. Instead, the saving glut of the rich has been linked to the substantial dissaving and large accumulation of debt by the non-rich. Analysis using variation across states shows that the rise in top income shares can explain almost all of the accumulation of household debt held as a financial asset by the household sector. Since the Great Recession, the saving glut of the rich has been financing government deficits to a greater degree.
Subjects: 
inequality
saving glut
household debt
unveiling
JEL: 
E21
E44
G51
D31
Document Type: 
Working Paper
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