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Profit shares, investment and output capacity

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  • Palle S. Andersen

Abstract

The main purpose of this paper is to test the hypothesis that, especially in Europe, excessive real wage growth and falling profit shares have been instrumental in reducing investment growth and the employment potential of the capital stock. We also consider the policy implication that a sustainable rise in employment may not be feasible unless higher output growth is led by investment and that this in turn requires continued or even further wage restraint.

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  • Palle S. Andersen, 1987. "Profit shares, investment and output capacity," BIS Working Papers 12, Bank for International Settlements.
  • Handle: RePEc:bis:biswps:12
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    References listed on IDEAS

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    16. Feldstein, Martin S & Foot, David K, 1971. "The Other Half of Gross Investment: Replacement and Modernization Expenditures," The Review of Economics and Statistics, MIT Press, vol. 53(1), pages 49-58, February.
    17. Anderson, G J, 1981. "A New Approach to the Empirical Investigation of Investment Expenditures," Economic Journal, Royal Economic Society, vol. 91(361), pages 88-103, March.
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