Title

The Saving Glut of the Rich

Author(s)

Atif Mian Atif Mian (Princeton University)

Ludwig Straub Ludwig Straub (Harvard University)

Amir Sufi Amir Sufi (Chicago Booth)

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.

Creation Date

2021-02

Section URL ID

Paper Number

2021-70

URL

https://scholar.harvard.edu/files/straub/files/mss_richsavingglut.pdf

File Function

Jel

D31, E21, E44, G51

Keyword(s)

Saving, Household Debt

Suppress

false

Series

13