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This paper contributes to the literature on secular stagnation by estimating a measure of potential output growth for the post-war US economy derived from a novel model specification that allows for the cyclical interactions between income distribution, represented by the trajectory of the labor share of income, and economic activity, as measured by capacity utilization. The results obtained show that potential output growth exhibits a gradual decline that predates the Great Recession and follows the downward trajectory of the labor share of income, thus suggesting the existence of an important long-run relationship between income distribution and output growth in the United States.

This paper conducts an empirical analysis of the relationship between financialization and neoliberalism and the labor share using panel data composed of twenty-seven European Union countries over nineteen years (from 1995 to 2013). Adopting a Kaleckian perspective, framed in the post-Keynesian literature, financialization and neoliberalism exert a negative influence on the labor share through three different channels: the change in the sectorial composition of economies (the increasing importance of financial activity and the decreasing importance of general government activity), the proliferation of shareholder value orientation, and the deterioration of general workers’ bargaining power. We estimate a labor share equation with the traditional variables (lagged labor share, technological progress, globalization, education, and output growth) and four further measures of financialization and neoliberalism (financial activity, general government activity, shareholder value orientation, and the trade union density rate). The findings show a disruptive relationship between financialization and neoliberalism and the labor share in European Union countries, mainly through the channels of general government activity and shareholder value orientation. It is also found that financialization and neoliberalism have contributed to a fall in the labor share in European Union countries. The technological progress was the main driver of the fall in the labor share in European Union countries, while the output growth was the main supporter. This suggests that the trend of decline in the labor share could intensify in the future taking into account the fears of potential secular stagnation in the current era of financialization and neoliberalism. JEL Classification: C23, D33, E25, E44

The paper develops a model of economic fluctuations in the medium run and their relation with the short-run macroeconomic equilibrium. The business cycle is the result of two separate forces. On the one hand, there is Harrodian instability. On the other hand, this instability is contained by the inherent contradictions of capitalism. I focus on two of these contradictions: the profit-squeeze that results from the tightening of the labor market as employment and utilization increase, and the financial instability hypothesis as formulated by Hyman Minsky. With the inclusion of overhead labor, the model can explain the U-shaped behavior of the wage share along the business cycle (wage share decreases for low levels of utilization and increases for higher levels) that prevailed in most of the post-WWII period, as well as the decrease in the wage share as utilization increases that has been observed in the most recent cycles.

In a seminal paper on Marxian business cycle theory, Goodwin (1967) presented a model which assumed that a higher wage share leads to lower investment and thus a general economic slowdown. In contrast Kalecki (1971) was arguing that a higher wage share would have an expansionary effect because the consumption propensity out of wage income is higher than that out of profit income. Based on a general model that allows for wage-led as well as profit-led demand regimes, this paper estimates the effects of a change in the wage share on aggregate private domestic demand with quarterly data for 12 OECD countries. JEL classification: E11, E12, E20, E22, E25

The paper examines the distributional consequences of financial crises based on the lessons of the past crises experiences of Argentina, Brazil, Korea, Mexico, and Turkey. It identifies the possible channels through which crises may affect functional and personal distribution of income. It concludes that the crises of the last two decades have both pro-capital and pro-finance distributional outcomes. JEL classification: D31, E25, O15, G01

For 1970-1982, the wage/profit ratio is strongly counter-cyclical; it's movements are determined mainly by output demanded (or capacity utilization) and only secondarily by unemployment with a long time lag. These data weakened the case for the reserve army theory and strengthen the case for theories of deficient demand (but data for 1950-1970 lean more the other way).

This paper investigates and refutes the claim, sponsored by business interests and prominent economists, that there is a shortage of capital in the United States, arising from undue encroachment on profits by rising wages The statistical distortions involved are exposed Data are presented proving that the surplus value generated bv U S workers is more than ample for any reasonably expectable dom estic investment requirements, under capitalist conditions Other data are presented which show that the share of capital in net values created has been stable or increasing in recent decades, while the rate of exploitation of labor has increased, and the wage share of net production declined The paper characterizes the false claims as propaganda devices used to justify attacks on working peoples' living standards, which are already underway An alternative policy approach is sketched, and an ultimate socialist solution advocated

The purpose of this article is to ascertain empirically whether the "law" of the tendential fall of the rate of profit, considered as an element of long wave theory, can explain the present economic stagnation in German industry. The results are negative for the explanatory power of the "law": the rate of profit is declining in the long run, but the organic composition, instead of increasing, decreases or remains stationary - the opposite of the predicted change. This evolution of the organic composition of capital is essentially due to: 1) the net effects of technical change (i.e. the technical composition of capital and its results in terms of productivity); 2) the income distribution changes. In fact, generally productivity grew more than technical composition, so exerting a downward pressure on the organic composition (and a positive effect on the rate of profit). The noticeable increase in the wage share had a double effect; it amplified the downward pressure on organic composition and contributed to the decline in profitability.