The shape of the graph got me thinking, what did the spikes in the latter period coincide with? I realized that the spikes matched the run-up to our major bubble/bust periods: S&L bubble in the late 1980s, tech bubble of the late 90s, and residential real estate bubble of the mid 2000s. Given my semi-obsession with the role of debt (thank you Steve Keen) in macroeconomic behavior, I wondered how the Total Debt/GDP changes lined up with the wealth distribution changes.
Using Piketty & Saez's 2009 data on wealth changes and the Federal Reserve's outstanding U.S. Dollar debt figures (data pulled from their 2009 releases), I created a rate of change comparison chart. To eliminate some of the noise, I took a three-year Simple Moving Average of the delta-squareds.
Alternatively, here's the same graph with nominal change in the Top 0.1% Earners' Share of Income. Comparing second-derivative change on the Debt/GDP side with first-derivative change in 0.1% Earners' Share might be a bit funky, but it tells a better story and makes sense from the perspective of matching with the original graph... If I remembered my financial econometrics well enough I'd make a comment about data stationarity here...
If anyone is interested in the source data please let me know and I will post my set.
My concluding question: how much of the change in wealth distribution from 1980-today was directly from the Financial Services sector profiting off leverage/credit expansion?
Kyle
Emmanuel Saez's dataset updated Aug 2009 available: http://elsa.berkeley.edu/~saez/
Federal Reserve data available at the usual place: http://www.federalreserve.gov
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