>There are a lot of problems with the study you're reacting to. It takes no account of the increase in debt, which has depressed the savings rate. It uses income quintiles, even though wealth isn't perfectly correlated with income and even though it's only the top couple of percent of the (wealth) distribution that holds most of the stock (making quintiles too broad a measure). I've queried the authors about this, and their responses aren't terribly impressive. But a footnote at the beginning said it was written under the inspiration of Alan Greenspan, so it must be right. Doug Bonehead question. In the study, there is only a slight increase in the concentration in the ownership of financial assets in the top income quintile over the last 3 SCF cycles--to something like 65%, from what 61% in 1989. The proportion of assets held by each income quintile hasn't changed that much. What has changed, the report says, is the ratio of the value of those assets to income (which has gone up considerably even for the lowest quintile), *and* the net acquisition of liabilities by the upper income quintile. The latter accounts for the drop in savings rates for the most part, the report says. But the proportion of liabilities held by the upper income quintile has actually gone down, according to their figures. How do these two findings square? If the value of the liabilities isn't the measure they use to determine proportion owned, what is? Christian
