The Role of Wealth in Shaping Inequalities

This article documents the interaction between wealth accumulation and different types of inequalities. First, wealth inequalities are themselves substantial and increasing. Differences of saving opportunities in terms of vehicles lead to returns increasing with respect to the size of individual wealth, which accelerates inequality dynamics. In addition to the housing issue due to the sharp increase of real-estate prices, this inflation combined to the decrease of real-estate returns, contributes to the inequality increase due to returns differentials. This meets the issue of increasing income inequalities, driven by the extreme concentration of capital income. In addition, the increase share of bequest and inheritance in wealth accumulation impacts the issue of inter-generational mobility and the persistence of inequalities.