The Rise and Fall of Pandemic Excess Wealth

Abdelrahman, Hamza; Oliveira, Luiz E.; Shapiro, Adam Hale

Journal Article

The Rise and Fall of Pandemic Excess Wealth

Abstract: U.S. households accumulated significantly more wealth following the pandemic onset than would have been expected without the pandemic shock. Overall excess household wealth—measured as households’ inflation-adjusted net worth beyond pre-pandemic projections—peaked in late 2021 at $13 trillion, then rapidly fell to zero in late 2022, where it broadly remained through the third quarter of 2023. This rise and fall can be attributed mainly to financial assets, particularly equity holdings. Similarly, real liquid asset holdings currently sit below pre-pandemic projections despite a persistent rise in checking account balances.

Keywords: covid19; pandemic; households; wealth; net worth;