Pandemic-Era Liquid Wealth Is Running Dry

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

Journal Article

Pandemic-Era Liquid Wealth Is Running Dry

Abstract: Households accumulated more liquid assets beginning in 2020 than would have been expected without the pandemic. These “extra” liquid assets have dissipated, but their evolution has differed significantly by income group. While middle- and lower-income households hold substantially less liquid wealth than implied by pre-pandemic projections, the level for higher-income households remains close to its pre-pandemic path. Over the same period, credit card delinquency rates initially dropped and, more recently, have steadily risen as pandemic-era liquid wealth was depleted, especially for middle- and lower-income households.

Keywords: covid19; pandemic; wealth; liquid assets; households; lower-income;