France Is Catching Up to Japan, but Not in a Good Way

Source: Ludwig von Mises Institute
by Karl-Friedrich Israel

“Since the introduction of the euro in 1999, the wealth-to-income ratio in France has been on the same trajectory as it had been in Japan fifteen years earlier during the country’s massive asset price bubble of the 1980s. In France, there was an even weaker price correction after the Great Recession as the European Central Bank stepped in quickly to keep asset prices artificially afloat through unconventional monetary policy measures. Even though France’s wealth-to-income ratio at its peak never reached Japan’s peak of 808 percent in 1990, today they nearly match at 634 percent in Japan and 620 percent in France. Overall net wealth in France is thus more than 6 times as big as net annual income. This is a relatively high value compared to other developed countries.” (05/06/22)