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


  • Rishabh Kumar

    () (Department of Economics, New School for Social Research)


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 nd they had very little in uences on the trends and magnitudes of household net worth, relative to income. Using the dynamics of inter-group accumulation rates, I propose an accounting decomposi- tion 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

    1. Robert J. Shiller, 2015. "Irrational Exuberance," Economics Books, Princeton University Press, edition 3, number 10421.
    2. Mariacristina De Nardi, 2015. "Quantitative Models of Wealth Inequality: A Survey," NBER Working Papers 21106, National Bureau of Economic Research, Inc.
    3. Christopher D Carroll, 1997. "Why Do the Rich Save So Much?," Economics Working Paper Archive 388, The Johns Hopkins University,Department of Economics.
    4. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
    5. Lars Osberg, 2014. "Can Increasing Inequality Be a Steady State?," OECD Statistics Working Papers 2014/1, OECD Publishing.
    6. Dean Baker, 2011. "When Numbers Don't Add Up: The Statistical Discrepancy in GDP Accounts," CEPR Reports and Issue Briefs 2011-17, Center for Economic and Policy Research (CEPR).
    7. Saez, Emmanuel & Zucman, Gabriel, 2014. "Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," CEPR Discussion Papers 10227, C.E.P.R. Discussion Papers.
    8. Jesse Bricker & Alice Henriques & Jacob Krimmel & John Sabelhaus, 2016. "Measuring Income and Wealth at the Top Using Administrative and Survey Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 261-331.
    9. Chirinko, Robert S., 2008. "[sigma]: The long and short of it," Journal of Macroeconomics, Elsevier, vol. 30(2), pages 671-686, June.
    10. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, Oxford University Press, vol. 129(3), pages 1255-1310.
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    More about this item


    Saving rates; Top incomes; Wealth; National Accounts;

    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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