The Saving Glut of the Rich and the Rise in Household Debt

Atif Mian, Ludwig Straub and Amir Sufi

No 8201, CESifo Working Paper Series from CESifo

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.

Keywords: inequality; saving glut; household debt; unveiling (search for similar items in EconPapers)
JEL-codes: D31 E21 E44 G51 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-his and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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