Wealth Inequality and Return Heterogeneity During the COVID-19 Pandemic

Kartashova, Katya; Zhou, Xiaoqing

doi:10.24149/wp2114

Cited by 2 publications

(1 citation statement)

References 21 publications

(56 reference statements)

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“…Since the 2008 financial crisis, the Federal Reserve has ballooned their balance sheet from 900 billion to today's 8.8 trillion while maintaining interest rates at record low levels for nearly two decades. Although the FED's chair reiterated that their action "absolutely" does not widen the wealth gap in America, many papers, such as Kuhn et al [1]; Davis [2]; Kartashova et al [3]; and Coibion et al [4], have found conclusive evidence that the FED's monetary policy has widened the wealth gap of Americans.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Federal Reserves Monetary Policy on Wealth Inequality During COVID-19

2023

AEMPS

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The term wealth in wealth inequality is referred to the total asset of a household, and the wealth inequality implies the uneven distribution of wealth within a community. While many papers have discussed and investigated the change in wealth inequality in the past, this paper aims to investigate the change in wealth inequality during the COVID-19 pandemic (Q4 2019 to Q2 2022) in the United States. This approach was to take a snapshot of the wealth distribution of the top 0.1% and the bottom 50% at the start of Q4 2019 and forecast the change in wealth from changes in asset prices. Conclusive evidence from this paper and from prior research indicates that wealth inequality and the Federal Reserves monetary policy are inversely proportional; in other words, as the FED loosens its policy, wealth inequality expands.

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Section: Introductionmentioning

confidence: 99%

The Effect of Federal Reserves Monetary Policy on Wealth Inequality During COVID-19

2023

AEMPS

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The accuracy of homeowners’ valuations in the twenty-first century

Dreesen

Damen²

2022

Empir Econ

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We study the accuracy of homeowners' self-reported estimates using data from the 2001-2019 American Housing Survey. By comparing sellers' estimates with deflated transaction prices for the same properties, we find evidence that American sellers overestimate the value of their homes by 1.3% on average. The mean absolute error is equal to 15.6%. Correcting for selection bias, we find that the (absolute) valuation error is strongly related to several household characteristics, most importantly marriage and education. Moreover, we find that housing market conditions such as recent local price growth and volatility are important determinants for the size and direction of the error. In particular, volatility in house prices decreases the accuracy of homeowners in estimating their property's value. Our results imply that transaction prices are preferred over self-assessed values in several applications such as wealth estimations and hedonic price models.

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Wealth Inequality and Return Heterogeneity During the COVID-19 Pandemic

Cited by 2 publications

References 21 publications

The Effect of Federal Reserves Monetary Policy on Wealth Inequality During COVID-19

The Effect of Federal Reserves Monetary Policy on Wealth Inequality During COVID-19

The accuracy of homeowners’ valuations in the twenty-first century

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