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The Distributional Effects Of The 1969–75 Inflation On Holdings Of Household Wealth In The United States

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  • Edward N. Wolff

Abstract

Using a simple simulation model, this paper assesses the impact of relative movements in asset prices on the distribution of wealth during the 1969–75 period. Because of the strong negative correlation between wealth level and the ratio of debt to wealth, this particular inflation induced a substantial drop in the overall level of wealth inequality. Moreover, comparing the portfolios of different demographic groups, we found that middle‐aged households gained relatively to younger and older ones, married couples gained relatively to singles, whites gained relatively to non‐whites, and home‐owners gained relatively to renters. The biggest gainers from this inflation were home‐owners with large mortgages and the biggest losers the large stock holders.

Suggested Citation

  • Edward N. Wolff, 1979. "The Distributional Effects Of The 1969–75 Inflation On Holdings Of Household Wealth In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(2), pages 195-207, June.
    • Handle: RePEc:bla:revinw:v:25:y:1979:i:2:p:195-207
    DOI: 10.1111/j.1475-4991.1979.tb00093.x
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    Cited by:

    1. Seghezza, Elena & Morelli, Pierluigi, 2014. "Conflict inflation and delayed stabilization," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 171-184.
    2. Heer, Burkhard & Sussmuth, Bernd, 2007. "Effects of inflation on wealth distribution: Do stock market participation fees and capital income taxation matter?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(1), pages 277-303, January.
    3. Keerti Mallela & Sunny Kumar Singh & Archana Srivastava, 2020. "Estimating Bilateral Remittances in a Macroeconomic Framework: Evidence from top Remittance-Receiving Countries," Studies in Microeconomics, , vol. 8(1), pages 95-118, June.
    4. Edward N. Wolff, 2012. "The Asset Price Meltdown and the Wealth of the Middle Class," NBER Working Papers 18559, National Bureau of Economic Research, Inc.
    5. Süssmuth, Bernd & Wieschemeyer, Matthias, 2017. "Progressive tax-like effects of inflation: Fact or myth? The U.S. post-war experience," IWH Discussion Papers 33/2017, Halle Institute for Economic Research (IWH).
    6. Wieschemeyer, Matthias & Süssmuth, Bernd, 2019. "Progressive tax-like effects of inflation: Fact or myth? The U.S. post-war experience," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203634, Verein für Socialpolitik / German Economic Association.

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