The Saving Glut of the Rich
This paper develops a new unveiling methodology to trace distributional household saving through the financial system and applies it to tax records from 1963 to 2019. Since the 1980s, saving by the top 1% has surged, creating a saving glut of the rich comparable in scale to the global saving glut and equally influential in driving the demand for safe assets. Unveiling the financial sector reveals that this glut financed much of the rise in middle-class borrowing before 2008 and the expansion of federal debt thereafter. Our framework helps illustrate how rising inequality reshapes financial intermediation and debt dynamics.
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