Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154239
Authors: 
Muck, Jakub
McAdam, Peter
Growiec, Jakub
Year of Publication: 
2015
Series/Report no.: 
ECB Working Paper 1806
Abstract: 
We document the consequences of ambiguity in the empirical definition of the macroeconomic labor share. Depending on its definition, the properties of short-run fluctuations, medium-run swings, and long-run stochastic trends of the labor share may vary substantially. Based on a range of historical US time series, we carry out a systematic exploration of discrepancies between the alternative labor share definitions in terms of the observed stochastic trends, shares of short-, medium- and long-run variation in total volatility of the series, degree of persistence, mean-reversion properties, and susceptibility to structural breaks. We conclude that while short-run properties of the labor shares (represented by cyclical variation below 8 years) are relatively consistent across all definitions, their medium-run swings (8-50 years) and long-run trends ( 50 years) diverge substantially. As important applications, we document the implications of our findings for growth accounting, the identification of short-run responses of the labor share to technology shocks and for estimating inflation.
Subjects: 
labor share
mean reversion
persistence
spectral analysis
structural breaks
JEL: 
C82
E25
E32
ISBN: 
978-92-899-1619-6
Document Type: 
Working Paper

Files in This Item:
File
Size
699.35 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.