The Saving Blood of the Rich

David Frum: Hano Lustig's paper sheds light on some of the other discussions going on right now about low interest rates. Rich households are not just scaled up versions of poor households, he says; their consumption technology is different and they save more. If you sort of increase income inequality and you give them a bigger fraction of the pie to the rich, that's going to mean that there's more savings in equilibrium that have to be absorbed than that drives down our real rates,. That's the channel. He says it's very hard to precisely identify which of these components accounts for what fraction.

Transcript

Play full episode

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app