Gap between rich and poor has increased more quickly in the US than in Europe

Wealth inequality in the United States has increased more quickly than in Europe in the last 50 years, according to a new Imperial study. The wealth gap was partly due to significant rises in stock market prices, according to the new study from Imperial College Business School , published in the Journal of Monetary Economics. Researchers from Imperial and the Paris School of Economics are calling for action to be taken by governments and policy makers in the US, to boost wages at the lower end of the market, control unemployment, and stabilise house prices. The researchers drew on new economic data from which they could build a database of the distribution of wealth for most European countries for the first time. This brought the data in line with the available US financial figures and allowed them to compare the change in both total household wealth and wealth inequality in Europe and the United States since the 1970s to the present day, as well as working out the reasons for those changes. "High levels of economic inequality can lead to economic and political instability. This is why action needs to be taken before societies become polarised." Dr Clara Martinez-Toledano Assistant Professor in Finance, Business School The researchers found that although both regions had a similar steady growth in total household wealth, the way the wealth had been distributed has been markedly different since the 1980s.