Wealth-Income Ratios in Free Market Capitalism: Switzerland, 1900–2020

Martínez, Isabel Z. and Enea Baselgia
Authors registered in the RePEc Author Service: Isabel Z. Martínez

No 16660, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We estimate the ratio of private wealth to national income, βpt, for Switzerland from 1900 to 2020. Our results indicate that over the 20th century, βpt did not follow a U-shaped pattern as in most European countries. Instead, it was exceptionally stable at around 500%. We argue that this consistently high βpt was the result of geopolitical factors combined with Switzerland’s capital friendly policymaking. Since the turn of the century, however, βpt has been on a rapid rise to reach 793% in 2020. This considerable increase is mainly driven by large capital gains, especially in housing wealth.

Keywords: Wealth-income ratio; Income distribution; Economic growth; Housing prices (search for similar items in EconPapers)
JEL-codes: D31 D33 E01 N34 (search for similar items in EconPapers)
Date: 2021-10
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