Generational Wealth Accounts: did public and private inter-generational transfers offset each other over the financial crisis?
File(s)
Accepted version
Author(s)
McCarthy, David
Sefton, James
Lee, Ronald
Sambt, Joze
Type
Journal Article
Abstract
We develop Generational Wealth Accounts (GWA): the first set of balance sheets, broken down by generations, to include all human capital, tangible wealth, financial wealth, and transfer wealth, and the uses to which these resources are put. We then use them to measure the size, nature (public or private; capital or current) and direction of inter-generational transfers and assess the sustainability of public and private consumption plans. We confirm that public sector consumption in the UK is unsustainable but show that the private sector is close to balance. Aggregate consumption plans are therefore unsustainable. Although public sector finances
worsened significantly over the crisis, the private sector balance improved and capital transfers to the young increased, more than fully offsetting this deterioration. We find that increases in house prices redistributed resources away from the young and towards the old but had little effect on overall sustainability.
worsened significantly over the crisis, the private sector balance improved and capital transfers to the young increased, more than fully offsetting this deterioration. We find that increases in house prices redistributed resources away from the young and towards the old but had little effect on overall sustainability.
Editor(s)
Guner, Nezih
Date Issued
2022-10-01
Date Acceptance
2022-02-28
Citation
The Economic Journal, 2022, 132 (647), pp.2412-2437
ISSN
0013-0133
Publisher
Oxford University Press
Start Page
2412
End Page
2437
Journal / Book Title
The Economic Journal
Volume
132
Issue
647
Copyright Statement
© The Author(s) 2022. Published by Oxford University Press on behalf of Royal Economic Society. . This is a pre-copy-editing, author-produced version of an article accepted for publication in The Economic Journal following peer review. The definitive publisher-authenticated version is available online at: https://academic.oup.com/ej/advance-article/doi/10.1093/ej/ueac019/6550017
Sponsor
Economic & Social Research Council (ESRC)
Grant Number
ES/P000142/1
Subjects
Social Sciences
Economics
Business & Economics
INHERITANCES
Economics
14 Economics
Publication Status
Published
Date Publish Online
2022-03-17