By the same authors

Factor shares, business cycles and the distributive loop

Research output: Contribution to journalArticle



Publication details

DateE-pub ahead of print - 17 Feb 2012
DatePublished (current) - Jun 2012
Issue number3
Number of pages19
Pages (from-to)493-511
Early online date17/02/12
Original languageEnglish


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 (counter-cyclical wage share). Empirical evidence gives no decisive support for either account: factor shares may be procyclical and counter-cyclical 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 downswing.

Bibliographical note

© 2012 Blackwell Publishing Ltd. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details

    Research areas

  • factor shares, business cycles, profit squeeze, underconsumption, Kaleckian macroeconomics

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