Induced innovation, the distributive cycle, and the changing pattern of labour productivity cyclicality: an SVAR analysis for the US economy

Marco Stamegna ()
Additional contact information
Marco Stamegna: Scuola Normale Superiore

Economia Politica: Journal of Analytical and Institutional Economics, 2024, vol. 41, issue 3, No 10, 929 pages

Abstract: Abstract This paper aims to: a) contribute to the empirical literature on induced technical change by investigating the wage-productivity nexus at business cycle frequencies in the US economy; b) explore the changing pattern of the distributive cycle in the US. In order to do so, it carries out the estimation of several structural vector autoregressive (SVAR) models for two subperiods: the post-war period (1948–1984) and the Great Moderation (1985–2019). We find that: i) wage shocks have positive effects on labour productivity at business cycle frequencies in both subperiods; ii) the US economy exhibits profit-led activity, although this appears to be driven more by technology than by distributive shocks; iii) during the Great Moderation, labour productivity has become acyclical, and real wages are no longer responsive to employment; the disappearance of the procyclical pattern of labour productivity can then be explained by a lessened incentive to invest in labour-saving innovations by firms due to missing wage growth in the upturn of the business cycle.

Keywords: Labour productivity; Endogenous technical change; Income distribution; SVAR (search for similar items in EconPapers)
JEL-codes: E12 E24 E25 E32 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40888-024-00340-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:epolit:v:41:y:2024:i:3:d:10.1007_s40888-024-00340-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40888

DOI: 10.1007/s40888-024-00340-3

Access Statistics for this article

Economia Politica: Journal of Analytical and Institutional Economics is currently edited by Alberto Quadrio Curzio

More articles in Economia Politica: Journal of Analytical and Institutional Economics from Springer, Fondazione Edison
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().