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FACTOR SHARES, BUSINESS CYCLES AND THE DISTRIBUTIVE LOOP
Author(s) -
Jackson William A.
Publication year - 2012
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2012.04152.x
Subject(s) - economics , factor shares , business cycle , wage share , distributive property , profit (economics) , wage , income shares , keynesian economics , monetary economics , macroeconomics , microeconomics , labour economics , income distribution , inequality , production (economics) , efficiency wage , mathematical analysis , mathematics , pure mathematics
This paper looks at how factor shares vary over the business cycle and how their movements fit into Kaleckian analysis. Heterodox accounts of factor‐share movements include both profit‐squeeze arguments (procyclical wage share) and underconsumption arguments (countercyclical wage share). Empirical evidence gives no decisive support for either account: factor shares may be procyclical and countercyclical at different stages of the business cycle. If factor shares vary in such a complex way, then Kaleckian models cannot have a stable distributive curve. The economy instead follows a distributive loop, with different adjustment paths during an upswing and a downswing.