Wealth Inequality—A Tale of the Diverging Tails
The issue of increased wealth inequality has accompanied the recovery in U.S. household balance sheets to the point where the Top 10% of U.S. households now hold 70% of the wealth, while the Bottom 90% account for just 30%. This paper examines the underlying drivers of the widening wealth distribution and its potential economic effects. The policy prescriptions to narrow wealth inequality include approaches that will work more slowly than measures to directly restrain accumulation at the top, such as a wealth tax, but they will also have far fewer unintended consequences.