Abstract
We present a Gordon-growth-model-based formula for wealth-income ratios and empirically examine its implications on long-run cross-country differences in wealth-income ratios. Firstly, we find that wealth-income ratios have a negative cross-country correlation with saving rates, contrary to the conventional understanding of the relationship as posited by Piketty and Zucman (2014). Secondly, we find that the labor share of income contributes significantly to cross-country variation in wealth-income ratios.
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