@SteveRoth People do face a choice.

With new income, "should I spend this money on newly produced goods and services, or purchase an existing long-lived goods, or purchase a financial asset?"

With existing financial wealth, at any given time, "should I retain this wealth in the form of a financial portfolio asset, or shift into existing long-lived goods, or mobilize it into commissioning real goods and service?"

@SteveRoth If these don't seem like choices, it's because under conditions of the kind of stability we've enjoyed, the answers are very predictable. As income increases, the share devoted to financial assets increases, asymptoting at 1. As wealth increases, the likelihood financial assets are mobilized as anything else decreases, asymptoting towards zero.

@SteveRoth Under conditions of reduced financial stability, these choices might become much more urgent, though. When financial assets come to seem questionable, for example, I think wealth might shift from financial assets towards real estate (both bidding up existing assets and commissioning new ones), with profound real economic effects. Existing wealth holders might revise their choice.

@SteveRoth We see this certainly in almost every developing economy, where domestic financial assets have never seemed safe and so real estate is the primary "store of value" for the rich. China in the news is suffering from that story right now. The question is whether places with histories of more stable financial assets can become at risk of shifting towards that equilibrium.