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Labor share and growth in the long run

Author

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  • McAdam, Peter
  • Bridji, Slim
  • Charpe, Matthieu

Abstract

This paper establishes some stylized facts of the long run relationship between growth and labor shares using historical data for the United States (1898-2010), the United Kingdom (1856-2010), and France (1896-2010). Performing individual country time-frequency analysis, we demonstrate the existence of long-term cycles in labor share of thirty to fifty years explaining a major part of the variance in the data. Further, the impact of labor share on growth changes sign with the frequency considered from negative at high frequencies to positive at low frequencies. Finally, the positive coefficient associated with the labor share at low frequencies increases over time. JEL Classification: E24, E25, N1

Suggested Citation

  • McAdam, Peter & Bridji, Slim & Charpe, Matthieu, 2019. "Labor share and growth in the long run," Working Paper Series 2251, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20192251
    Note: 50336
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp2251~e73a1e85d1.en.pdf
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    References listed on IDEAS

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    Cited by:

    1. Michael Cauvel, 2019. "The neo-Goodwinian model reconsidered," Working Papers PKWP1915, Post Keynesian Economics Society (PKES).

    More about this item

    Keywords

    growth; income distribution; labor share; wavelet analysis;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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