Slate Magazine | December 11, 2012
Brent Neiman sent me a working paper that he’s written with Loukas Karabarbounis that’s relevant to the ongoing discussion about labor compensation’s declining share of American GDP. There’s a lot of stuff going on here, but the key point for the purposes of political punditry is simply the empirical observation that the trend in question is global in scope (see above) and they think linked to a parallel shift in savings away from the household sector and toward the corporate sector.
The bulk of the paper is dedicated to developing a technical model in which those factors can be linked and explained as a function of the declining cost of investment goods. That certainly could be right.
