Wealth Inequality and Private Savings: The Case of Germany

33 Pages Posted: 23 Jul 2020

See all articles by Mai Dao

Mai Dao

International Monetary Fund (IMF)

Date Written: June 1, 2020


This paper explores the interaction between corporate ownership concentration and privatesavings, and by extension, the current account balance in Germany. As high corporate savingslargely reflected capital income accruing to wealthy households and increasingly retained inclosely-held firms, the buildup of external imbalances in Germany has been accompanied bywidening top income inequality, rising private savings and compressed consumption rates.Rising corporate profits in an environment of high business wealth concentration account for90 percent of the rise in the private savings rate and a third of the increase in the Germancurrent account surplus over 1999-2016.

JEL Classification: G31, F12, O32, E01, K34, F3, G21, E2

Suggested Citation

Dao, Mai, Wealth Inequality and Private Savings: The Case of Germany (June 1, 2020). IMF Working Paper No. 20/107, Available at SSRN: https://ssrn.com/abstract=3652495

Mai Dao (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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