## wpiea2020107-print-pdf — Sections 2.1 and 5.1

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### Home ownership, housing market, and effects on wealth distribution
- Private home ownership is very low among German households; home ownership rate is the lowest among Euro area countries.
- Low home ownership is particularly pronounced among households in the low-middle segment of the income distribution; it does not vary much across countries among high-income households.
- Consequences and mechanisms:
  - Traditional reliance on generally well-functioning rental markets with strong tenant protection contributed to low home ownership.
  - Recent appreciating house prices have not benefited the broader population; higher rents, particularly in major cities, have increased housing affordability strains for lower-income households.
  - Trend developments (declining mortgage interest rates amid rising rentals and residential mobility among the young) have exacerbated income inequality (Dustmann et al., 2018).

### Corporate ownership structure and private business wealth
- Most corporate net worth in Germany is concentrated in privately-held firms; around 60 percent of corporate assets and profits are generated by firms in private ownership.
- Many Mittelstand firms remain in private, often family-controlled ownership even when large or multinational.
- Among publicly-listed firms:
  - 65 percent are controlled by a family (directly through at least 20 percent of stock ownership or through cross-holdings).
  - The largest controlling shareholder holds an average of 54.5 percent of voting rights within a German publicly listed firm, compared with 20-25 percent in the UK and 31 percent in Sweden (Faccio and Lang, 2002).
- Private business wealth and concentration:
  - The top 10 percent wealthiest households in Germany own around 60 percent of aggregate net wealth.
  - 40 percent of the top 10 percent’s wealth is in the form of private business ownership.
  - Private business wealth accounts for 25 percent of overall national wealth.
  - 95 percent of private business wealth is owned by the top 10 percent wealthiest households.
- Implication: persistent rise in corporate profits and corporate saving since the early 2000s mostly accrued to the wealthiest households via dividends or appreciating equity valuation, boosting top income and wealth shares; concurrently, wage restraint contributed to households in lower segments losing out.

### Taxation, inheritance, and property valuation
- Revenues from property taxes in Germany (comprising real property, inheritance and other property taxes) are only 1 percent of GDP and are very low compared to peers.
  - Property tax revenues have declined, reflecting reductions in marginal tax rates in the 1990s and the inheritance tax reform of 2009, which greatly increased exemption of inheritance wealth through intra-family business transmission.
- The average inheritance flow has grown from 4 percent in 1980 to over 10 percent of national income annually in 2010; this increase almost entirely reflects increases in inheritance and inter-vivos transfers of wealthy families (Piketty, 2016).
- The inheritance tax regime primarily benefits the wealthiest, who can claim exemption of corporate assets, while average families face higher burdens given relatively low personal exemptions and substantial marginal rates; the regime is characterized as regressive.
- Taxes on real property are only 0.4 percent of GDP, particularly low internationally due to the widening gap between tax- and market-valuations; last encompassing updates of property values occurred in 1935 and 1964 (only West Germany). Under-valuation of real estate disproportionately benefits the wealthy given their higher home ownership rate and recent house price appreciation.

### Implications for household disposable income and consumption
- Aggregate patterns:
  - The rise in NFC (non-financial corporation) gross saving underpinning the rise in the current-account surplus has been mirrored by a decline in household disposable income and consumption as a share of GDP.
  - Household disposable income to GDP ratio declined by around 6 percentage points over 2005-2017.
- Drivers:
  - NFC gross saving rate has risen since the early 2000s; driven by rising profits of German corporations and, more recently, declining dividend payout rates (Dao and Maggi, 2018).
  - Higher profitability has been supported by wage restraint/lower labor income shares and declining interest payments on debt, spurring exports and profits but reducing household disposable incomes (in percent of GDP).
  - Strong labor market after mid-2000s contributed to recovering labor income share starting in 2008 through higher employment and more recently higher wage growth.
  - Decline in unemployment and retrenchment of the welfare state following the Hartz IV reforms contributed to reducing disposable income through lower net benefits since 2005, offsetting modest gains in labor incomes.
  - The corporate tax reforms in 2001 and 2008 favored retained earnings relative to dividend distribution and new equity issuance; the 2008 reform substantially reduced the tax burden on retained earnings while slightly increasing the effective tax rate on dividends for unincorporated businesses.
  - Declining interest rates (end-2008 to 2018) reduced household interest income by 2 - 4 percentage points depending on maturity.
  - A higher share of total assets of lower-middle income German households is held as financial assets compared to other Euro area countries (44 percent in Germany compared to 13.5 percent elsewhere in the Euro area); around half of those assets are in sight deposits and saving accounts subject to declining interest rates (HFCS 2nd wave).
- Distributional effects:
  - The decline in disposable income share was concentrated among lower- and median-income households, who have high propensity to consume, leading to a decline in the aggregate consumption to GDP ratio.
  - The steepest decline in household disposable income to GDP occurred starting in 2005; transfer retrenchment and interest income reduction contributed the most, while dividend (and other property income) ratio only started to decline in 2010 and stabilized in 2015.
  - Lower income households experienced relative and absolute erosion or stagnation of real purchasing power; widening income inequality and erosion in the lower deciles began in the early 2000s, coinciding with the rise in the current account.
  - Large-scale immigration after 2010 also played a significant role for bottom-income dynamics in recent years (DIW Wochenbericht 19/2019).
  - Survey data show lower/median income households tend to have a propensity to consume close to one (Börsch-Supan et al., 2006); the shift in income distribution toward the top, where propensity to consume is low, helps explain the decline in aggregate consumption and rise in the current-account surplus.

### Empirical testing: NFC saving, profits, and income inequality
- Empirical strategy:
  - Regression: IncInequ_ct = α + γ_c + β NFCGS_ct + δ_t + ε_ct, using sectoral national account data for NFC saving rate (percent of GDP) and income inequality indices from WID; unbalanced panel of 27 countries broadly from 1995-2015.
- Key empirical findings:
  - An increase in the NFC saving rate is associated with an increase in income inequality.
  - Quantitatively, a 1 percentage point increase in NFC saving rate is associated with a 0.3-0.4 ppt increase in the share of income going to the top 10 percent highest-income individuals.
  - Variation in corporate saving over time can explain 20 percent of the long-run change in income inequality in the sample.
- Interaction with wealth inequality:
  - Regression: ∆IncInequ_ct = α + δ_t + β1 ∆NFCGOS_ct + β2 ∆NFCGOS_ct × WealthInequ_c + β3 WealthInequ_c + ε_ct.
  - Results:
    - The interaction term between changes in corporate profits and country-specific wealth inequality (top 10 percent wealth share) is positive and significant.
    - Higher corporate profits are associated with lower income inequality only for countries with low wealth inequality (below the 40th percentile of the sample). For higher levels of wealth inequality (and Germany exceeds this threshold), an increase in corporate profits is associated with higher income inequality, with larger increases when wealth inequality is higher.
    - Similar results obtain for interaction between wealth inequality and corporate saving (instead of profits).
    - The regression results imply the rise in corporate saving, coupled with the degree of wealth inequality, can explain about half of the rise in top income inequality in Germany over 2000 - 2015.

### From corporate savings to aggregate private savings
- Mechanism and evidence:
  - Widening income inequality driven in large part by higher corporate profits was associated with lower disposable incomes and consumption for households in the bottom deciles and higher incomes for top wealth households.
  - Marginal propensity to consume (MPC) declines with income and wealth; survey data indicate one third of German households do not save, while the wealthiest save a very high share of their income (Börsch-Supan et al., 2006).
  - As income shifts toward high-saving wealthy households (low MPC) from lower-income households (high MPC, close to one), the average consumption/GDP ratio declines, boosting aggregate private saving rate.

### Key statistics from Section 2.1
- Home ownership rate: lowest among Euro area countries (no numeric rate provided in source excerpt).
- Corporate private ownership share: around 60 percent of corporate assets and profits.
- Family control among publicly-listed firms: 65 percent.
- Average largest controlling shareholder voting rights in German listed firms: 54.5 percent.
- Top 10 percent wealth share: around 60 percent of aggregate net wealth.
- Share of top 10 percent wealth held as private business ownership: 40 percent.
- Private business wealth share of national wealth: 25 percent.
- Share of private business wealth owned by top 10 percent: 95 percent.
- Property tax revenues: 1 percent of GDP (all property taxes); taxes on real property: 0.4 percent of GDP.
- Average inheritance flow: from 4 percent in 1980 to over 10 percent of national income annually in 2010.
- Household disposable income to GDP ratio decline: around 6 percentage points over 2005-2017.
- Share of total assets held as financial assets by lower-middle income German households: 44 percent in Germany compared to 13.5 percent elsewhere in the Euro area.
- Decline in household interest income due to falling rates (end-2008 to 2018): 2 - 4 percentage points depending on maturity.

---

### 5.1 Motives and theoretical predictions (Correlation between corporate and overall private savings)
- Theoretical motives:
  - Firms may accumulate saving for precautionary reasons, especially to finance investment in innovation and intangible capital (Falato et al. 2013; Adler et al. 2018).
  - Business-driven corporate saving motive should be independent of ownership concentration.
  - If strong tax incentives induce shareholders to retain savings within the firm rather than distribute them, the correlation between corporate and overall private saving should be stronger when wealth distribution is more concentrated.
- Two channels:
  - Higher ownership concentration increases incidence of closely-held firms, where firm saving/investment behavior partly reflects personal incentives of largest owners; corporate savings can partly reflect disguised savings of wealthy households.
  - High wealth inequality implies concentration of aggregate private savings among the wealthy (Späth and Schmid (2016) estimate that 54-65 percent of aggregate saving is carried out by the top 10 percent wealthiest households), so aggregate private saving is more strongly driven by top households by composition.
- Combined implication: where firms are closely-held and wealth concentration is high, positive correlation between private saving and corporate saving should be stronger.

### Empirical specification (Section 5.1)
- Regression:
  ∆PrivateSavings_ct = α + δ_t + β_1 ∆NFCGOS_ct + β_2 ∆NFCGOS_ct × WealthInequ_c + β_3 WealthInequ_c + ε_ct
- Variable notes:
  - ∆PrivateSavings_ct: 5-year change in private saving rate (dependent variable in Table 3).
  - ∆NFCGOS_ct: 5-year non-overlapping changes in the gross saving rate of the non-financial corporate sector (NFC Saving change).
  - WealthInequ_c: measures of wealth inequality (top 10% wealth share or net wealth Gini coefficient).
  - Time fixed effects (δ_t) and country fixed effects included.

### Main macro-level findings
- Table 3 regression results:
  - The interaction term between NFC saving change and wealth inequality (measured either by top 10% wealth share or net wealth Gini coefficient) is positive and strongly statistically significant.
  - This indicates that with higher wealth inequality, overall private saving rates are more closely linked with corporate savings.
- Figure 11:
  - The positive correlation between corporate and private saving is driven by countries with relatively high wealth inequality; correlation is significantly weaker for other countries.
- Economic magnitude:
  - The rise in corporate saving, coupled with the level of observed wealth inequality can explain around 90 percent of the rise in private saving in Germany over 1999-2016 and one-third of the rise in the overall CA (current account).
- Cross-country relationship:
  - Variation in private saving evolution over the past 20 years explains over 23 percent of the current cross-sectional variation in wealth inequality across 27 countries.

### Interpretation and mechanism
- The positive and significant interaction term supports the view that part of the change in corporate saving over time is disguised household saving when wealth is highly concentrated.
- Two reinforcing mechanisms:
  - Corporate savings reflect household saving at the top when ownership is concentrated.
  - Aggregate private saving is driven by top household saving when wealth concentration is high.
- Mutual reinforcement:
  - Persistent, concentrated rises in private saving exacerbate wealth inequality over time.
  - Wealth inequality widens with rising income inequality, especially if income inequalities are sustained.
  - Richer households have higher saving rates; top-biased income trends (e.g., higher corporate profits) lead to higher saving rates by these households and over time produce more wealth accumulation at the top.
- Literature note: saving rates increasing in wealth are essential to match the tail of the empirical wealth distribution (Benhabib and Bisin, 2018).

### Key statistics and exact figures from Section 5.1
- Top 10% households estimated to carry out 54-65 percent of aggregate saving (Späth and Schmid (2016)).
- Interaction coefficients in Table 3 (selected reported values):
  - NFC Saving Change * Top wealth share: 0.0113***.
  - NFC Saving Change * Gini coef.: 0.920***.
  - Top wealth share coefficient examples: 0.0547**, 0.0430.
  - Gini coef. coefficient example: 7.390.
- Regression sample sizes and fit (from Table 3):
  - N values reported: N 1107 1811 1071 81.
  - r2 values reported per column: 0.562 0.564 0.483 0.585 0.575 0.543.
- Cross-country explanatory power: changes in private saving explain over 23 percent of cross-sectional variation in wealth inequality across 27 countries.
- Germany-specific decomposition: corporate saving rise explains around 90 percent of rise in private saving (1999-2016) and one-third of rise in overall current account.

### Macro implications emphasized
- Wealth inequality is a central force shaping macroeconomic adjustments and imbalances:
  - It affects distribution of returns to capital and labor at the micro level and shapes the macroeconomic adjustment to external shocks/secular trends.
  - The case of Germany illustrates how rising corporate profitability translated into higher aggregate private saving and current account surplus when corporate ownership is concentrated.

*Source: wpiea2020107-print-pdf — Excerpts from "2.1 Drivers of high wealth inequality" and "5.1 Correlation between corporate and overall private savings: macro-level patterns"*

### 2.1  Drivers of high wealth inequality

### 2.1  Drivers of high wealth inequality

### Home ownership, housing market, and effects on wealth distribution
- Private home ownership is very low among German households; home ownership rate is the lowest among Euro area countries (Figure 4, left panel).
- The low home ownership rate is particularly pronounced among households in the low-middle segment of the income distribution, while it does not vary much across countries among high-income households.
- Consequences and mechanisms:
  - Traditional reliance on generally well-functioning rental markets with strong tenant protection has contributed to low home ownership.
  - Recent appreciating house prices have not benefited the broader population; higher rents, particularly in major cities, have increased housing affordability strains for lower-income households.
  - Trend developments (declining mortgage interest rates amid rising rentals and residential mobility among the young) have exacerbated income inequality (Dustmann et al., 2018).

### Corporate ownership structure and private business wealth
- Most corporate net worth in Germany is concentrated in privately-held firms; around 60 percent of corporate assets and profits are generated by firms in private ownership (Figure 4, right panel).
- Many Mittelstand firms remain in private, often family-controlled ownership even when large or multinational.
- Among publicly-listed firms, 65 percent are controlled by a family (directly through at least 20 percent of stock ownership or through cross-holdings). The largest controlling shareholder holds an average of 54.5 percent of voting rights within a German publicly listed firm, compared with 20-25 percent in the UK and 31 percent in Sweden (Faccio and Lang, 2002).
- Private business wealth accounts for a large share of national wealth and of wealth concentration:
  - The top 10 percent wealthiest households in Germany own around 60 percent of aggregate net wealth.
  - 40 percent of the top 10 percent’s wealth is in the form of private business ownership (Figure 5).
  - Private business wealth accounts for 25 percent of overall national wealth.
  - 95 percent of private business wealth is owned by the top 10 percent wealthiest households.
- Implication: persistent rise in corporate profits and corporate saving since the early 2000s mostly accrued to the wealthiest households via dividends or appreciating equity valuation, boosting top income and wealth shares; concurrently, wage restraint contributed to households in lower segments losing out.

### Taxation, inheritance, and property valuation
- Revenues from property taxes in Germany (comprising real property, inheritance and other property taxes) are only 1 percent of GDP and are very low compared to peers (Figure 6).
  - Property tax revenues have declined, reflecting reductions in marginal tax rates in the 1990s and the inheritance tax reform of 2009, which greatly increased exemption of inheritance wealth through intra-family business transmission.
- The average inheritance flow has grown from 4 percent in 1980 to over 10 percent of national income annually in 2010; this increase almost entirely reflects increases in inheritance and inter-vivos transfers of wealthy families (Piketty, 2016).
- The inheritance tax regime primarily benefits the wealthiest, who can claim exemption of corporate assets, while average families face higher burdens given relatively low personal exemptions and substantial marginal rates; the regime is therefore characterized as regressive.
- Taxes on real property are only 0.4 percent of GDP, particularly low internationally due to the widening gap between tax- and market-valuations; last encompassing updates of property values occurred in 1935 and 1964 (only West Germany). Under-valuation of real estate disproportionately benefits the wealthy given their higher home ownership rate and recent house price appreciation.

### Implications for household disposable income and consumption
- The rise in NFC (non-financial corporation) gross saving underpinning the rise in the current-account surplus has been mirrored by a decline in household disposable income and consumption as a share of GDP (Figure 7).
- Drivers:
  - NFC gross saving rate has risen since the early 2000s; this increase has been driven by rising profits of German corporations and, more recently, declining dividend payout rates (Dao and Maggi, 2018).
  - Higher profitability has been supported by wage restraint/lower labor income shares and declining interest payments on debt, spurring exports and profits but reducing household disposable incomes (in percent of GDP).
  - The strong labor market after mid-2000s contributed to recovering labor income share starting in 2008 through higher employment and more recently higher wage growth.
  - Decline in unemployment and retrenchment of the welfare state following the Hartz IV reforms contributed to reducing disposable income through lower net benefits since 2005, offsetting modest gains in labor incomes.
- Aggregate outcome:
  - Household disposable income to GDP ratio declined by around 6 percentage points over 2005-2017.
  - The corporate tax reforms in 2001 and 2008 favored retained earnings relative to dividend distribution and new equity issuance, reducing payout share; the 2008 reform substantially reduced the tax burden on retained earnings while slightly increasing the effective tax rate on dividends for unincorporated businesses, creating incentives to retain rather than distribute profits.
  - Declining interest rates (end-2008 to 2018) reduced household interest income by 2 - 4 percentage points depending on maturity.
  - A higher share of total assets of lower-middle income German households is held as financial assets compared to other Euro area countries (44 percent in Germany compared to 13.5 percent elsewhere in the Euro area); around half of those assets are in sight deposits and saving accounts subject to declining interest rates (HFCS 2nd wave).
- Distributional effects:
  - The decline in disposable income share was concentrated among lower- and median-income households, who have high propensity to consume, leading to a decline in the aggregate consumption to GDP ratio.
  - The steepest decline in household disposable income to GDP occurred starting in 2005; transfer retrenchment and interest income reduction contributed the most, while dividend (and other property income) ratio only started to decline in 2010 and stabilized in 2015.
  - Lower income households experienced relative and absolute erosion or stagnation of real purchasing power; widening income inequality and erosion in the lower deciles began in the early 2000s, coinciding with the rise in the current account.
  - Large-scale immigration after 2010 also played a significant role for bottom-income dynamics in recent years (DIW Wochenbericht 19/2019).
  - Survey data show lower/median income households tend to have a propensity to consume close to one (Börsch-Supan et al., 2006); the shift in income distribution toward the top, where propensity to consume is low, helps explain the decline in aggregate consumption and rise in the current-account surplus.

### Empirical testing: NFC saving, profits, and income inequality
- Empirical strategy:
  - To test whether higher NFC gross saving rates are associated with higher income inequality over time within countries, the regression IncInequ_ct = α + γ_c + β NFCGS_ct + δ_t + ε_ct was estimated using sectoral national account data for NFC saving rate (percent of GDP) and income inequality indices from WID, yielding an unbalanced panel of 27 countries broadly from 1995-2015.
- Key empirical findings (Table 1 summary):
  - An increase in the NFC saving rate is associated with an increase in income inequality.
  - Quantitatively, a 1 percentage point increase in NFC saving rate is associated with a 0.3-0.4 ppt increase in the share of income going to the top 10 percent highest-income individuals.
  - Variation in corporate saving over time can explain 20 percent of the long-run change in income inequality in the sample (Figure 9).
- Interaction with wealth inequality (testing heterogeneity):
  - Hypothesis: if unequal wealth distribution allows higher corporate profits to disproportionately benefit high-income households who own corporations, then increases in profits should produce a stronger increase in income inequality where wealth concentration is higher.
  - Regression specification: ∆IncInequ_ct = α + δ_t + β1 ∆NFCGOS_ct + β2 ∆NFCGOS_ct × WealthInequ_c + β3 WealthInequ_c + ε_ct.
  - Results (Table 2 summary):
    - The interaction term between changes in corporate profits and country-specific wealth inequality (top 10 percent wealth share) is positive and significant.
    - Higher corporate profits are associated with lower income inequality only for countries with low wealth inequality (below the 40th percentile of the sample). For higher levels of wealth inequality (and Germany exceeds this threshold), an increase in corporate profits is associated with higher income inequality, with larger increases when wealth inequality is higher.
    - Similar results obtain for interaction between wealth inequality and corporate saving (instead of profits).
    - The regression results imply the rise in corporate saving, coupled with the degree of wealth inequality, can explain about half of the rise in top income inequality in Germany over 2000 - 2015.

### From corporate savings to aggregate private savings
- Mechanism and evidence:
  - Widening income inequality driven in large part by higher corporate profits was associated with lower disposable incomes and consumption for households in the bottom deciles and higher incomes for top wealth households.
  - Marginal propensity to consume (MPC) declines with income and wealth; survey data indicate one third of German households do not save, while the wealthiest save a very high share of their income (Börsch-Supan et al., 2006).
  - As income shifts toward high-saving wealthy households (low MPC) from lower-income households (high MPC, close to one), the average consumption/GDP ratio declines, boosting aggregate private saving rate.

*Source: wpiea2020107-print-pdf - 2.1  Drivers of high wealth inequality*

### 5.1  Correlation between corporate and overall private sav-

### 5.1  Correlation between corporate and overall private savings: macro-level patterns

### Motives and theoretical predictions
- Firms may accumulate saving for precautionary reasons, especially to finance investment in innovation and intangible capital (see Falato et al. 2013; Adler et al. 2018).
- Business-driven corporate saving motive should be independent of ownership concentration.
- If strong tax incentives induce shareholders to retain savings within the firm rather than distribute them, the correlation between corporate and overall private saving should be stronger when wealth distribution is more concentrated.
- Two channels for this prediction:
  - Higher ownership concentration implies a higher incidence of closely-held firms, where firm saving/investment behavior partly reflects personal incentives of largest owners rather than pure profit maximization; corporate savings can partly reflect disguised savings of wealthy households.
  - High wealth inequality implies high concentration of aggregate private savings among the wealthy (Späth and Schmid (2016) estimate that 54-65 percent of aggregate saving is carried out by the top 10 percent wealthiest households), so aggregate private saving is more strongly driven by top households by simple composition.

- Combined implication: where firms are closely-held and wealth concentration is high, the positive correlation between private saving and corporate saving should be stronger.

### Empirical specification
- Regression tested (as presented in the source):
  ∆PrivateSavings_ct = α + δ_t + β_1 ∆NFCGOS_ct + β_2 ∆NFCGOS_ct × WealthInequ_c + β_3 WealthInequ_c + ε_ct

- Notes on variables:
  - ∆PrivateSavings_ct: 5-year change in private saving rate (dependent variable in Table 3).
  - ∆NFCGOS_ct: 5-year non-overlapping changes in the gross saving rate of the non-financial corporate sector (NFC Saving change).
  - WealthInequ_c: measures of wealth inequality (top 10% wealth share or net wealth Gini coefficient).
  - Time fixed effects (δ_t) and country fixed effects included.

### Main macro-level findings
- Table 3 regression results strongly support the prediction:
  - The interaction term between NFC saving change and wealth inequality (measured either by top 10% wealth share or net wealth Gini coefficient) is positive and strongly statistically significant.
  - This indicates that with higher wealth inequality, overall private saving rates are more closely linked with corporate savings.
- Figure 11 shows:
  - The positive correlation between corporate and private saving is driven by countries with relatively high wealth inequality, while it is significantly weaker for other countries.
- Economic magnitude:
  - The rise in corporate saving, coupled with the level of observed wealth inequality can explain around 90 percent of the rise in private saving in Germany over 1999-2016 and one-third of the rise in the overall CA (current account).
- Cross-country relationship:
  - Variation in private saving evolution over the past 20 years explains over 23 percent of the current cross-sectional variation in wealth inequality across 27 countries in the sample (Figure 13).

### Interpretation and mechanism
- The positive and significant interaction term supports the view that part of the change in corporate saving over time is disguised household saving when wealth is highly concentrated.
- Two reinforcing mechanisms operate:
  - Corporate savings reflect household saving at the top when ownership is concentrated.
  - Aggregate private saving is driven by top household saving when wealth concentration is high.
- The relationship is mutually reinforcing:
  - Persistent, concentrated rises in private saving exacerbate wealth inequality over time.
  - Wealth inequality widens with rising income inequality, especially if income inequalities are sustained.
  - Richer households have higher saving rates; top-biased income trends (e.g., higher corporate profits) lead to higher saving rates by these households and over time produce more wealth accumulation at the top.
- Literature note: saving rates increasing in wealth are essential to match the tail of the empirical wealth distribution (Benhabib and Bisin, 2018).

### Key statistics and exact figures from the analysis
- Top 10% households estimated to carry out 54-65 percent of aggregate saving (Späth and Schmid (2016)).
- Interaction coefficients in Table 3 (selected reported values):
  - NFC Saving Change * Top wealth share: 0.0113*** (t-statistics reported in table).
  - NFC Saving Change * Gini coef.: 0.920*** (t-statistics reported in table).
  - Top wealth share coefficient examples: 0.0547**, 0.0430 (columns reported).
  - Gini coef. coefficient example: 7.390 (column reported).
- Regression sample sizes and fit (from Table 3):
  - N values reported: N 1107 1811 1071 81 (as shown in table layout).
  - r2 values reported per column: 0.562 0.564 0.483 0.585 0.575 0.543 (as shown).
- Cross-country explanatory power: changes in private saving explain over 23 percent of cross-sectional variation in wealth inequality across 27 countries.
- Germany-specific decomposition: corporate saving rise explains around 90 percent of rise in private saving (1999-2016) and one-third of rise in overall current account.

### Macro implications emphasized
- Wealth inequality is a central force shaping macroeconomic adjustments and imbalances:
  - It affects distribution of returns to capital and labor at the micro level and shapes the macroeconomic adjustment to external shocks/secular trends.
  - The case of Germany illustrates how rising corporate profitability translated into higher aggregate private saving and current account surplus when corporate ownership is concentrated.

*Source: Excerpt from the PDF chapter "5.1 Correlation between corporate and overall private savings: macro-level patterns" (IMF working paper content provided).*

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_Source: https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020107-print-pdf.pdf_