McKinsey Global Institute, the research subsidiary of the well-known consulting firm, is one of the sources that’s been monitoring these benchmarks in recent years, taking a broad look at all assets and liabilities on Earth in an attempt to “provide a lens into economic health.”
Its latest report, though, has a troubling thesis: that our international financial statement has become distinctly “out of kilter” with the economy, as less and less concrete capital — and progressively more theoretical returns — make up the quadrillions of dollars of wealth that exists.
Money on paper is outpacing investment and productive output
This wealth is, McKinsey writes, now “rooted in asset values rising faster than real economy investment and growth, creating record levels of global wealth ‘on paper,’ to a greater extent than previously.”
The primary suspects behind the trend are China and the U.S., where the surging values of certain existing commodities and businesses are key drivers of an overall jump in “wealth” despite not being true indicators of real value formation. This is also amid record debt in both countries.
As the researchers write, “When equity values rise faster than GDP, capital may disproportionately go to asset repurchases, sometimes with a lot of leverage. This may push up valuations, but leave the economy deprived of the type of investment that generates long-run growth.”
One big elephant in the room is the monumental expenditures in the realm of AI, much of which is funded by precarious circular financing and, even worse, debt, all for something that has yet to prove its worth. Some experts argued that AI did basically nothing to the economy in 2025, despite so much being poured into the sector.
But, the runaway stocks of these tech companies pushed world equities up by a staggering 20% over the course of the year, raising their values to nearly four times the US’s total GDP. Amid the flurry of the buildout, McKinsey notes that it’s “ imperative that corporate earnings deliver on high expectations” — something that still isn’t guaranteed.
This all serves as more solely “on-paper” growth, which McKinsey doesn’t deem as healthy economic progress.
Where the divergence could lead
While household wealth across all nations has been surging disproportionately to GDP for some 30 years, last year’s numbers show a particularly drastic rift, with the world’s fortune reaching the highest level ever recorded — $1.7 quadrillion in total assets and $570 trillion in household wealth — while many economies flatline.
