Logo
Munich Personal RePEc Archive

Spending by Bottom-80% U.S. Households Is Persistently Greater than Income. What Funds the Deficit?

Roth, Steve (2021): Spending by Bottom-80% U.S. Households Is Persistently Greater than Income. What Funds the Deficit?

WarningThere is a more recent version of this item available.
[img]
Preview
PDF
MPRA_paper_110670.pdf

Download (644kB) | Preview

Abstract

This paper explores economic measures that are surprisingly hard to assemble: US household income quintiles’ annual spending relative to annual income. The total sector’s income-minus-spending surplus is heavily dominated by the top 20%. The bottom 80% runs persistent spending deficits, implying ongoing asset disaccumulation; the bottom 80%’s annual “propensity” to spend relative to income, or spending multiplier, is greater than one. This spending deficit is found to be largely explained or “funded” by two additional asset sources that are not included in income: borrowing from the financial/banks sector, and — to a far greater extent — capital gains on asset holdings.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.