This study provides evidence for the US that the secular decline in the labor share is not only explained by technical change or globalization, but also by the dynamics of factor taxation, automation capital (robots), and population growth. First, we empirically find indications of...

We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess...

This paper examines Bertil Ohlin's analysis of trade policy and factor rewards in the context of the late nineteenth and early twentieth century United States. A leading question of the day was whether labor could benefit from protection. Ohlin suspected that labor could benefit from protection...

As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals’ factor...

We analyze a generalized neoclassical growth model that combines a normalized CES production function and possible asymmetries of savings out of factor incomes. This generalized model helps to shed new light on a recent debate concerning the impact of factor substitution and income distribution...

The functional income distribution in the US and most OECD countries has been characterized by an increasing capital income share and a declining wage share over the last decades. We present new evidence for the US economy that this fact is not only explained by technical change and...

We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess...

The recent debate about the falling share of labor income has brought attention to the trends in income shares, but less attention has been devoted to their variability. In this paper, we analyze how their fluctuations can be insured against between workers and capitalists, and the corresponding...

As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals’ factor...

This paper examines the distributional implications of inflation on top income shares in 12 advanced economies using data over the period 1920-2016. We use Local Projections to analyze how top income shares respond to an inflation shock, and panel regressions in which all variables are defined...

As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals' factor...

As far as standard measures of income inequality are concerned, the Nordic countries rank among the most equal economies in the world. This paper studies whether and how this picture changes when the focus is on inequality of income composition, meaning the heterogeneity in individuals' factor...

We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess...

The economic impact of Artificial Intelligence (AI) is studied using a (semi) endogenous growth model with two novel features. First, the task approach from labor economics is reformulated and integrated into a growth model. Second, the standard represen- tative household assumption is rejected,...

This paper estimates the relationship between aggregate demand and the functional distribution of income in the U.S. economy using a series of aggregative VAR models. Like most previous aggregative studies, it finds evidence of Goodwin cycle effects - i.e. profit-led demand and a profit-squeeze...

Micro-level studies provide insightful knowledge on the drivers of the labor income share. This paper introduces a novel firm-level dataset on the labor income share. Using the World Bank Enterprise Survey data, we put together an unbalanced panel comprising 146,666 firms from 139 countries and...

This paper uses a novel empirical strategy to present empirical estimates of the effect of an exogenous shock to distribution on demand and accumulation for the US economy from 1973 to 2018. We use recursive vector autoregressions to identify the impact of shocks to the wage share. We impose...

Keynes, following the tradition of Marx, argued that all values are created by labour and profits. However, functional income distribution between wages and profits is explained differently. In Marx's explanation of functional income distribution, wages are given as a basket of goods needed for...