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St. Louis Fed Discusses Growing Importance of Wealth in U.S.


ST. LOUIS - The Center for Household Financial Stability (HFS) at the Federal Reserve Bank of St. Louis has released the latest issue of its publication In the Balance. The issue takes a look at the growing importance of wealth – and how wealth concentration itself continues to grow.

“Wealth is more important than ever,” the publication states. “Despite large asset-price declines associated with the Great Recession and weak investment in its aftermath, capital looms larger in the U.S. economy than it has in a century.”

Authors William R. Emmons and Lowell R. Ricketts dove into wealth concentration by looking at French economist Thomas Piketty’s research in his best-selling book, Capital in the Twenty-First Century. 

The authors looked at data from the Federal Reserve’s Financial Accounts of the United States and the Bureau of Economic Analysis’ National Income and Product Accounts to conclude that capital-to-income ratio and the share of national income flowing to owners of capital are at levels not seen on an extended basis since the early 20th century. 

“Based on these data, one can safely say that, at least through 2015, Thomas Piketty was right,” the study notes.

Click here for the full text of the December 2015 issue of In the Balance, or visit the Center for Household Financial Stability online.