The rise in the weight of wealth in OECD countries: Causes and consequences

The ratio of wealth to income has increased considerably in OECD countries: from 320% of GDP in 1990 to 680% today. A rise in wealth relative to GDP can have two causes: A rise in the savings rate; A total return on wealth that is higher than nominal growth . T his may result from: An increase in productivity gains and technological progress; An increase in asset prices. For the OECD from 1990 to 2021, the explanation is an abnormal rise in asset prices leading to an abnormally high total return on wealth. What happens when the ratio of wealth to GDP becomes abnormally high? Monetary and financial shocks have major effects on the economic equilibrium; Wealth and intergenerational inequality become s significantly greater than income inequality.