Working Paper: NBER ID: w26941
Authors: Atif R. Mian; Ludwig Straub; Amir Sufi
Abstract: There has been a large rise in savings by Americans in the top 1% of the income or wealth distribution over the past 40 years, which we call the saving glut of the rich. Instead of financing investment, this saving glut has been associated with dissaving by the non-rich and dissaving by the government. An unveiling of the financial sector reveals that rich households have accumulated substantial financial assets that are direct claims on U.S. government and household debt. State-level analysis shows that the rise in top income shares has been important in generating the rise in savings by the rich.
Keywords: savings; wealth distribution; household debt; financial sector; top income shares
JEL Codes: D31; E21; E44; G51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| rise in savings by the top 1% (E21) | increase in financial asset accumulation (D14) |
| rise in savings by the top 1% (E21) | dissaving by the bottom 90% (E21) |
| dissaving by the bottom 90% (E21) | increased borrowing and decline in accumulation of financial assets (F65) |
| rise in savings by the top 1% (E21) | larger deficits by the government (H69) |
| financial sector evolution (O16) | channeling savings into government and household debt (H69) |
| rise in savings by the top 1% (E21) | implications for pricing and quantity of household debt (G51) |
| rise in savings by the top 1% (E21) | no increased capital formation in the economy (E22) |