 Who gets the flow? Financial globalisation and wealth inequalityJournal of Macroeconomics, 2024, vol. 81, issue C Abstract: This paper studies whether the advent of financial globalisation has contributed to increasing wealth inequality in the United States, France, and the United Kingdom. I find that (i) positive changes in the benchmark measure of financial globalisation are associated with a positive change in the top 1% and 10% wealth shares and a negative change in the wealth share of the bottom 50% of the distribution. This is equivalent to an average gain of $1 trillion for the top 10% and $1.6 trillion for the top 1%, over the period of interest. (ii) Portfolio equities and financial derivatives appear to be the driving components behind the increase in wealth shares. (iii) The implied change in wealth shares is driven by the accumulation of new financial wealth (flow) rather than the valuation of existing one. (iv) The dynamic is strengthened when a banking crisis hits the economy, possibly because people at the top of the distribution can recover their lost wealth faster than people at the bottom. The main finding is robust to an expanded country sample, albeit reducing the historical context beyond the scope of this paper. Keywords: Financial globalisation; International financial integration; Wealth inequality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:81:y:2024:i:c:s0164070424000338 DOI: 10.1016/j.jmacro.2024.103618 Access Statistics for this article Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos More articles in Journal of Macroeconomics from Elsevier |
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