Wealth Inequality and Private Savings: The Case of Germany

Download or read book Wealth Inequality and Private Savings: The Case of Germany written by Mai Dao and published by International Monetary Fund. This book was released on 2020-06-26 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the interaction between corporate ownership concentration and private savings, and by extension, the current account balance in Germany. As high corporate savings largely reflected capital income accruing to wealthy households and increasingly retained in closely-held firms, the buildup of external imbalances in Germany has been accompanied by widening top income inequality, rising private savings and compressed consumption rates. Rising corporate profits in an environment of high business wealth concentration account for 90 percent of the rise in the private savings rate and a third of the increase in the German current account surplus over 1999–2016.