Piketty’s Rising Share of Capital Income and the US Housing Market
The rising share of income accruing to housing is a key feature of the changing US income distribution. This column examines the determinants of this phenomenon. The rise occurred due to an increasing share of income accruing to owner-occupiers through imputed rent, it is concentrated in states that are constrained in terms of new housing supply, and it is closely associated with the long-run decline in real interest rates and inflation.
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