The US labor share of income: what shocks matter?

Mendieta‐Muñoz, Ivan; Rada, Codrina; Santetti, Márcio; Arnim, Rudiger von

doi:10.1080/00346764.2020.1821907

Cited by 15 publications

(22 citation statements)

References 36 publications

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“…The focus of Mendieta‐Muñoz et al. (2020) is to identify structural innovations in a four variable structural VAR (SVAR), and subsequently assess the impact of these exogenous variations on the labor share itself, and specifically across two different periods (1948–1985, and on to 2018). However, the four variable SVAR speaks directly to this literature; restrictions are motivated on the basis of neo‐Goodwinian theory, and include a contemporaneous effect of output on labor productivity (see next paragraph).…”

Section: Evidencementioning

confidence: 99%

“…LPs collect new estimates for each forecast horizon by regressing the dependent variable (vector) at horizon

t+h

on the information set at

t

; thus, the projections of forward values of the dependent variable (vector) on the information set are local to each horizon. Initially, it was argued that VARs and LPs are conceptually different, but the more recent literature demonstrates that the two methods in fact estimate the same population and sample IRFs (see also Mendieta‐Muñoz et al., 2020, Section 5), and thus provide a suitable robustness check for VAR results. Figure 3 shows the key IRFs obtained from the models that considered

(\psi _t , u_t )^{\prime }

in the top row and

(\psi _t , e_t )^{\prime }

in the bottom row, respectively.…”

Section: Evidencementioning

confidence: 99%

“…On the other hand, Mendieta‐Muñoz et al. (2020) use quarterly growth rates in their four variable SVAR, and nevertheless find evidence for the distributive cycle. Future research could seek to further elucidate the connections between these related but different applications.…”

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confidence: 99%

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The distributive cycle: Evidence and current debates

Barrales‐Ruiz

Mendieta‐Muñoz

Rada

et al. 2021

Journal of Economic Surveys

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This paper surveys current debates on the distributive cycle. The literature builds on R.M. Goodwin' s seminal 1967 chapter titled " A growth cycle." We review theoretical motivations for the distributive cycle, which, despite signif-icant differences, all imply that macroeconomic activity leads the labor share in a counter-clockwise cycle in the activity-labor share plane. Subsequently, we summarize and update evidence on the existence of a distributive cycle, with a focus on the post-war US macroeconomy. We analyze activity and labor share series and their interaction in the frequency domain, and also employ stan-dard vector autoregressions. Results confirm the distributive cycle for the US post-war period. We contextualize results vis-à-vis current debates: (1) we consider a financial cycle, to rebut the theoretical possibility of " pseudo-Goodwin" cycles, (2) demonstrate that a suppressed labor share and stagnation are com-patible with short run Goodwin cycles, and argue that this link presents the way forward for research on secular stagnation.

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Section: Evidencementioning

confidence: 99%

“…LPs collect new estimates for each forecast horizon by regressing the dependent variable (vector) at horizon

t+h

on the information set at

t

(\psi _t , u_t )^{\prime }

in the top row and

(\psi _t , e_t )^{\prime }

in the bottom row, respectively.…”

Section: Evidencementioning

confidence: 99%

See 1 more Smart Citation

The distributive cycle: Evidence and current debates

Barrales‐Ruiz

Mendieta‐Muñoz

Rada

et al. 2021

Journal of Economic Surveys

Self Cite

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“… 9 See Mendieta-Muñoz et al (2020) for evidence of structural shifts in the time series properties of the labour share that are consistent with a major shift in the balance of class forces during the neoliberal era. …”

Section: Footnotesmentioning

confidence: 98%

Path dependence and stagnation in a classical growth model

Michl

Tavani

2021

Cambridge Journal of Economics

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This paper embeds a technical progress function in a classical growth model and studies the effects of permanent changes in parameters and temporary shocks such as pandemics. Technical change is driven by dynamic economies of scale and responds to distributional forces: the wage share regulates labour-saving technical change and employment regulates its capital-using bias. The model features path dependence in the employment-population rate and the output-capital ratio. Population growth and distribution can respond to the employment rate. Interpreted through the model, secular stagnation under neoliberal capitalism has been driven by a combination of diminished investment and reduced worker bargaining power more than by slower technical change and population growth. A temporary unfavourable shock to the output-capital ratio will permanently reduce the employment rate. In the fully endogenous model, this will increase the profit share and reduce the rates of technical change, capital accumulation, and population growth.

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“…This effect is amplified by deunionization, the falling price of investment goods, and contractionary monetary policy. Mendieta-Muñoz et al (2020a) examine how demand, wages, and productivity shocks affect the evolution of the labor share. From 1948-1984, positive productivity, demand, and wage shocks led to the increase in labor's share of national income.…”

Section: Literature Reviewmentioning

confidence: 99%

Bargaining power, structural change, and the falling U.S. labor share

Cauvel

Pacitti

2022

Structural Change and Economic Dynamics

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The US labor share of income: what shocks matter?

Cited by 15 publications

References 36 publications

The distributive cycle: Evidence and current debates

The distributive cycle: Evidence and current debates

Path dependence and stagnation in a classical growth model

Bargaining power, structural change, and the falling U.S. labor share

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