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Savings from top incomes and accumulation in the United States context: Results from disaggregated national accounts

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  • Rishabh Kumar

    (Department of Economics, New School for Social Research)

Abstract

This paper proposes that high savings out of top incomes con- tributed to the steady wealth income ratio amongst US households. I explore counter claims regarding capital gains and housing prices and find they had very little influence on the trends and magnitudes of household net worth, relative to income. Using the dynamics of inter-group accumulation rates, I propose an accounting decomposition formula which captures savings rates for any reference group. This methodology is applied to data from national accounts, balance sheets and income distribution statistics in order to compute saving rates for the Top 1% of households in the US income distribution. The estimates support the idea that high savings from top incomes have captured a growing share of wealth between 1980 and 2010.

Suggested Citation

  • Rishabh Kumar, 2015. "Savings from top incomes and accumulation in the United States context: Results from disaggregated national accounts," Working Papers 1524, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1524
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    References listed on IDEAS

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    More about this item

    Keywords

    Saving rates; Top incomes; Wealth; National Accounts;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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