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Capital productivity and the decreasing wage share in the United States: a Keynesian Approach

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  • Carles Manera
  • Ferran Navines
  • Jose Pérez-Montiel
  • Javier Franconetti

Abstract

We argue that in the US there is a causal relationship running unidirectionally from negative shocks in capital productivity to negative variations in the wage share. We sustain that, faced with a capital productivity decrease, the US firm sector pushes wages down to maximize the rate of profit. Through asymmetric SVAR techniques that are robust to endogeneity and structural breaks; we show that decreases in capital productivity unidirectionally cause decreases in the wage share. We offer some possible explanations for that.

Suggested Citation

  • Carles Manera & Ferran Navines & Jose Pérez-Montiel & Javier Franconetti, 2022. "Capital productivity and the decreasing wage share in the United States: a Keynesian Approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(3), pages 429-453, July.
    • Handle: RePEc:mes:postke:v:45:y:2022:i:3:p:429-453
    DOI: 10.1080/01603477.2022.2068034
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    Cited by:

    1. Ferran Navinés & José Pérez-Montiel & Carles Manera & Javier Franconetti, 2023. "Ranking the Spanish regions according to their resilience capacity during 1965–2011," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 415-435, October.
    2. DiMaria, charles-henri, 2023. "Profitability, investment and capital productivity," MPRA Paper 118640, University Library of Munich, Germany.

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