Summary of A Wealthless Recovery?

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Recommendation

Disparities in US income distribution have garnered a lot of attention since the Great Recession, even though household wealth in the aggregate has surpassed its 2007 benchmark and continued its upward trajectory. Economists Lisa J. Dettling, Joanne W. Hsu and Elizabeth Llanes offer an informative look at why the top 10% of the population has seen its wealth recover, while the net worth of the bottom 90% has still not gotten back to precrisis levels. This accessible article will likely engage analysts, economists and those interested in inequality dynamics.

In this summary, you will learn

  • How different income groups in the United States have seen their wealth recover since the Great Recession, 
  • What factors drive the unequal outcomes and 
  • Why consumer spending did not keep up with aggregate increases in wealth through 2016.
 

About the Authors

Lisa J. Dettling, Joanne W. Hsu and Elizabeth Llanes are economists with the Federal Reserve. 

 

Summary

Americans’ overall wealth sank a whopping 20% in the Great Recession, but it had more than recovered by 2012, with continuing gains through 2016. However, this aggregate growth glosses over the fact that the top 10% of the population, which owns 80% of US wealth, recovered much better than households in the bottom 90% did. Stratified analyses of the Federal Reserve Board’s Survey of Consumer Finances provide a close-up view of how different population segments fared. The study examined the top 10% of earners and the bottom 90%. All groups lost wealth during the recession. But as of 2016, the average net worth of the bottom contingent was still below 2007 levels, while that of the top 10% stood at 11% above precrisis levels.  


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