A new model developed by economists at Stanford University shows how a surge in wealth inequality may be reversed. The model, which is based on data from the United States, shows that the key to reducing wealth inequality is to increase the rate of capital turnover.

Capital turnover is the rate at which assets are bought and sold. When the rate of capital turnover is high, it means that assets are changing hands frequently. This can help to reduce wealth inequality because it means that more people have the opportunity to own assets and benefit from their appreciation.

The model shows that a 1% increase in the rate of capital turnover can lead to a 10% decline in wealth inequality. This is a significant finding because it suggests that even a small increase in the rate of capital turnover can have a major impact on reducing wealth inequality.

The model also shows that the impact of increasing the rate of capital turnover is greatest in the early stages of economic development. This is because in the early stages of economic development, there are fewer assets in existence and so a given increase in the rate of capital turnover has a greater impact on the distribution of assets.

The findings of the model suggest that policymakers should focus on policies that increase the rate of capital turnover if they want to reduce wealth inequality. These policies could include measures to reduce capital gains taxes, make it easier for people to start businesses, and encourage the flow of capital from rich countries to poor countries.