Home Economy Fed Decries a Wealth Gap It Helps Perpetuate

Fed Decries a Wealth Gap It Helps Perpetuate


But a recent study casts this dynamic in a different light. The February research, “The Savings Glut of the Rich” by Atif Mian of Princeton University, Ludwig Straub of Harvard University and Amir Sufi of the University of Chicago, suggests that the lopsided distribution of wealth is more than a social issue; it’s actually dissuading productive investment. Instead, the study shows that wealthy people are parking more of their cash in debt funds, which account for a significant proportion of lending to U.S. governments and households. Basically, the U.S. and lower-income families are becoming more indebted, rich people have more money tied up in debt funds, and less money goes toward fostering innovation and prosperity.

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