Skott, Peter2024-04-262024-04-262011-1010.7275/3317881https://hdl.handle.net/20.500.14394/22095Rising inequality affects the composition of asset demands as well as aggregate demand. The poor have few financial assets and their portfolio is skewed towards fixed-income assets. The rich, by contrast, hold a large proportion of their wealth in stocks. Thus, an increase in inequality tends to raise the demand for stocks. This generates capital gains, and these gains can fuel a bubble, as desired portfolios shift further towards stocks.earnings inequalityportfolio compositionfinancial instabilityEconomicsWorking Paper