Wealth Inequality and Private Savings: The Case of Germany

June 26, 2020

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Format: Chicago

Mai Dao. Wealth Inequality and Private Savings: The Case of Germany, (USA: International Monetary Fund, 2020) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper explores the interaction between corporate ownership concentration and private savings, and by extension, the current account balance in Germany. As high corporate savings largely reflected capital income accruing to wealthy households and increasingly retained in closely-held firms, the buildup of external imbalances in Germany has been accompanied by widening top income inequality, rising private savings and compressed consumption rates. Rising corporate profits in an environment of high business wealth concentration account for 90 percent of the rise in the private savings rate and a third of the increase in the German current account surplus over 1999–2016.

Subject: Disposable income, Income, Income distribution, Income inequality, National accounts, Private savings

Keywords: Closely-held firm, Corporate saving, Current account surplus, Disposable income, Germany, Global, Income, Income distribution, Income inequality, Income inequality, Income share, Inequality loop, Investment behavior, Net, NFC saving, Private savings, Saving rate, Wealth inequality, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/107
Stock No:

WPIEA2020107
ISBN:

9781513546063
ISSN:

1018-5941

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