Total net worth, or household wealth, has reached a new record high, at least in nominal terms. This has pushed many to argue that Americans have been using the accumulation in net worth to increase consumption. And there is some truth around this idea that Americans have been using increases in wealth to increase consumption. However, many economists, including us, have conducted research on this topic in the past and, while it is true that households use wealth accumulation to increase consumption, the impact of wealth accumulation on overall consumption is not as strong as many seem to suggest. But before getting ... (full story)