Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261022 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 2021-01
Publisher: 
The University of Utah, Department of Economics, Salt Lake City, UT
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 significant 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 standard 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 compatible with short run Goodwin cycles, and argue that this link presents the way forward for research on secular stagnation.
Subjects: 
Distributive cycle
US labor share of income
neo-Goodwin
JEL: 
E12
E24
E25
E32
Document Type: 
Working Paper

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