The available evidence suggests that about 75% of income shocks in individual states are smoothed, with 13% smoothed by the federal tax-transfer and grant system, 39% smoothed by insurance or cross-ownership of productive assets, and 23% smoothed by borrowing or lending.
And to put a rough number on the impact on aggregate activity more recently, simulations by the Board staff using our econometric model of the economy suggest that wealth generated in the equity markets over the past four years added about 1 percentage point to the growth rate of real GDP.