Asset-Price Redistribution

Andreas Fagereng, Matthieu Gomez, Émilien Gouin-Bonenfant, Martin Holm, Benjamin Moll and Gisle Natvik
Additional contact information
Matthieu Gomez: Columbia University [New York]
Émilien Gouin-Bonenfant: Columbia University [New York]
Benjamin Moll: LSE - London School of Economics and Political Science

World Inequality Lab Working Papers from HAL

Abstract: Over the last several decades, there has been a large increase in asset valuations across many asset classes. While these rising valuations had important effects on the distribution of wealth, little is known regarding their effect on the distribution of welfare. To make progress on this question, we develop a sufficient statistic for the money-metric welfare ef- fect of deviations in asset valuations (i.e., changes in asset prices keeping cash flows fixed). This welfare effect depends on the present value of an individual's net asset sales rather than asset holdings: higher asset valuations benefit prospective sellers and harm prospective buyers. We estimate this quantity using panel microdata covering the universe of financial transactions in Norway from 1994 to 2019. We find that the rise in asset valuations had large redistributive effects: it redistributed from the young towards the old and from the poor towards the wealthy.

Date: 2024-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04563909
References: Add references at CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-04563909/document (application/pdf)

Related works:
Working Paper: Asset-Price Redistribution (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wilwps:halshs-04563909

Access Statistics for this paper

More papers in World Inequality Lab Working Papers from HAL
Bibliographic data for series maintained by Caroline Bauer ().