Using a simple simulation model, this paper assesses the impact of relative movements in asset prices on the distribution of wealth during the 1969–75 period. Because of the strong negative correlation between wealth level and the ratio of debt to wealth, this particular inflation induced a substantial drop in the overall level of wealth inequality. Moreover, comparing the portfolios of different demographic groups, we found that middle‐aged households gained relatively to younger and older ones, married couples gained relatively to singles, whites gained relatively to non‐whites, and home‐owners gained relatively to renters. The biggest gainers from this inflation were home‐owners with large mortgages and the biggest losers the large stock holders.
|Original language||English (US)|
|Number of pages||13|
|Journal||Review of Income and Wealth|
|State||Published - Jun 1979|
ASJC Scopus subject areas
- Economics and Econometrics