Is China’s Stock Market Bubble Simply A Massive Reverse-Robin-Hood Scheme To Bail Out The Rich?
Yes. And it’s not just China that does this.
Using comprehensive administrative data from China, we document a substantial increase in inequality of wealth held in risky assets by Chinese households in the 2014–2015 bubble-crash episode: the top 0.5% households in the equity market gained, while the bottom 85% lost, 250B RMB through active trading in this period, equating to 30% of each group’s initial equity wealth.
In comparison, the return differential between the top and bottom groups in periods of a relatively calm stock market is an order of magnitude smaller.
This article was originally posted here: https://www.ac2news.com/2020/07/is-chinas-stock-market-bubble-simply-a-massive-reverse-robin-hood-scheme-to-bail-out-the-rich/.