Journal ArticleDOI
Longer-run distributive cycles: wavelet decompositions for the US, 1948–2011
Jose Barrales,Rudiger von Arnim +1 more
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In this paper, the authors decompose time series into wavelets of varying periodicity and analyze the comovement of the income, output gap, and employment rate vis-A-vis the functional distribution of income.Abstract:
This paper presents an analysis of the comovement of the incomeâcapital ratio, output gap, and employment rate vis-A -vis the functional distribution of income. We decompose time series into wavelets of varying periodicity. Cycles at all periodicities in all three variables vis-A -vis wage share show a counter-clockwise (âGoodwinâ) pattern. The well-known regular cycles appear at business cycle frequency. Furthermore, a roughly 30-year cycle exists before 1980. Post-1980, no clear medium-run cyclical picture emerges. This finding is complemented by wavelet covariance analysis, which suggests that covariance of longer period cycles is negative before 1980, but positive thereafter. Crucially, trajectories of trends across the entire postwar period raise the possibility of one âlongâ 60-year Goodwin cycle in all three variables vis-A -vis the wage share, which would suggest that sustained growth after c.2000 required much broader real wage increases relative to labor productivity. We conduct non-parametric Granger tests, which indicate that systematic interaction at all periodicities exist. We discuss our findings in relation to the debate on wage-led and profit-led demand regimes.read more
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Wage-led versus profit-led demand regimes: The long and the short of it
TL;DR: This article argued that demand is more likely to be profit-driven than weakly wage-driven in the short run and more strongly wage-biased in the long run, because the positive effects of higher profits (lower labor costs) on investment and net exports are strongest in short-term and the negative effects of a higher wage share on consumption are if anything stronger in long-term.
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The Decline of the US Labor Share Across Sectors
TL;DR: In this article, the authors provide insights on the functional distribution of income in the postwar US economy, based on a Log Mean Divisia Index decomposition of the labor share by 14 sectors.
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The distributive cycle: Evidence and current debates
TL;DR: A survey of current debates on the distributive cycle can be found in this article, with a focus on the post-war US macroeconomy, where the authors analyze activity and labor share series and their interaction in the frequency domain, and also employ stan-dard vector autoregressions.
Journal ArticleDOI
Secular Stagnation and Income Distribution Dynamics
TL;DR: In this paper, a measure of potential output growth for the post-war US economy derived from a novel model specification that allows to estimate the potential growth rate of the US economy.
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Systems Estimation of a Structural Model of Distribution and Demand in the US Economy
TL;DR: The authors showed that private-sector aggregate demand is more, rather than less, wage-led (or in some cases, less profit-led) compared with OLS estimates of identically specified models.