Financial crises have been attributed to rising income inequality via its induced high household leverage as observed in the USA and similar economies. Alternatively it has been suggested this is not a general relationship since it was found that inequality had no bearing on crises in 14...

Renewed attention to inequality and saving has arisen owing to their pronounced implications for global imbalances and financial crises. We show that the relationship between saving and inequality is negative if savers' funds are borrowed by spending households for consumption as in the USA, but...

type="main" xml:id="twec12188-abs-0001" <title type="main">Abstract</title> <p>Global imbalances are attributable to savings deficiency in some economies and savings glut in others. The recent global crisis has triggered widespread social conflict over income inequality. The inequality-saving link has again become a pressing...</p>