a column by Jakub Growiec, Peter McAdam and Jakub Mućk for VOX: CEPR’s Policy Portal
The worldwide decline of the labour share is worrying, because the labour share is thought to be too low.
This column attempts to derive an estimate of the socially optimal labour share. The calibration implies that the socially optimal share is 17% higher than the historical average.
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Hazel&rsquo's comment:
I will freely admit that I did not manage to follow all the statistical analysis. I have been too long awau from the coalface.
Showing posts with label labour_share. Show all posts
Showing posts with label labour_share. Show all posts
Tuesday, 2 July 2019
Friday, 29 March 2019
The missing link: Monetary policy and the labour share
a column by Cristiano Cantore, Filippo Ferroni and Miguel León-Ledesma for VOX: CEPR’s Policy Portal
Despite its importance, there is no systematic empirical evidence on the effect of monetary policy shocks on the share of output allocated to wages.
Using data for five developed economies, this column finds that standard models generate the ‘wrong sign’ for the effect when compared to the empirical results, and that the labour share temporarily increases following a positive shock to the interest rate. Using the standard models to analyse the distributional effects of monetary shocks could be misleading.
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Despite its importance, there is no systematic empirical evidence on the effect of monetary policy shocks on the share of output allocated to wages.
Using data for five developed economies, this column finds that standard models generate the ‘wrong sign’ for the effect when compared to the empirical results, and that the labour share temporarily increases following a positive shock to the interest rate. Using the standard models to analyse the distributional effects of monetary shocks could be misleading.
Continue reading
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