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Board of Governors of the Federal Reserve System (US)
Finance and Economics Discussion Series
How Much has Wealth Concentration Grown in the United States? A Re-Examination of Data from 2001-2013
Jesse Bricker
Alice M. Henriques
Lars Peter Hansen
Abstract

Well known research based on capitalized income tax data shows robust growth in wealth concentration in the late 2000s. We show that these robust growth estimates rely on an assumption---homogeneous rates of return across the wealth distribution---that is not supported by data. When the capitalization model incorporates heterogeneous rates of return (on just interest-bearing assets), wealth concentration estimates in 2011 fall from 40.5% to 33.9%. These estimates are consistent in levels and trend with other micro wealth data and show that wealth concentration increases until the Great Recession, then declines before increasing again.


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Jesse Bricker & Alice M. Henriques & Lars Peter Hansen, How Much has Wealth Concentration Grown in the United States? A Re-Examination of Data from 2001-2013, Board of Governors of the Federal Reserve System (US), Finance and Economics Discussion Series 2018-024, 13 Apr 2018.
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Keywords: Wealth concentration ; Household wealth
DOI: 10.17016/FEDS.2018.024
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