The distributive cycle: Evidence and current debates

Jose Barrales-Ruiz, Ivan Mendieta-Muñoz, Codrina Rada, Daniele Tavani, Rudiger von Arnim
Authors registered in the RePEc Author Service: Ivan Mendieta-Muñoz and Daniele Tavani

Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics

Abstract: This paper surveys current debates on the distributive cycle. The literature builds on R.M. Goodwin’s seminal 1967 chapter titled “A growth cycle.” We review theoretical motivations for the distributive cycle, which, despite signif-icant differences, all imply that macroeconomic activity leads the labor share in a counter-clockwise cycle in the activity-labor share plane. Subsequently, we summarize and update evidence on the existence of a distributive cycle, with a focus on the post-war US macroeconomy. We analyze activity and labor share series and their interaction in the frequency domain, and also employ stan-dard vector autoregressions. Results confirm the distributive cycle for the US post-war period. We contextualize results vis-`a-vis current debates: (1) we consider a financial cycle, to rebut the theoretical possibility of “pseudo-Goodwin” cycles, (2) demonstrate that a suppressed labor share and stagnation are com-patible with short run Goodwin cycles, and argue that this link presents the way forward for research on secular stagnation.

Keywords: Distributive cycle; US labor share of income; neo-Goodwin. JEL Classification:E12; E24; E25; E32. (search for similar items in EconPapers)
Pages: 46
Date: 2021
New Economics Papers: this item is included in nep-cwa, nep-his, nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:uta:papers:2021-01

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