Household Wealth as a Factor of Economic Growth: A Case Study of Italy

Abstract

The wealth possessed by households, identifiable as so-called net worth, varies greatly in quantity and form between different socioeconomic contexts. We describe several forms of wealth typically owned by consumer households, considering their economic and social effects. We analyze the economic role of the wealth forms that compose the households’ net worth (real and financial assets minus the debt) in a panel data analysis of Italian regions, and we suggest a possible alternative use for a specific part of household net worth. In particular, the well-known financial share is already useful and exploited by the economic system, as confirmed empirically. Instead, a share of the real assets could prove useful as a source of support for the economy if some conditions are met. The results of the regional analysis illustrate the supposed lack of contribution and we suggest how the net worth not “fully exploited” could be integrated in the economic cycle, activating a propulsive mechanism to start “accelerated” growth processes.