Search

Is the Phillips curve dead? If so, who killed it? Conventional wisdom has it that the sound monetary policy since the 1980s not only conquered the Great Ination, but also buried the Phillips curve itself. This paper provides an alternative explanation: labor market policies that have eroded worker bargaining power might have been the source of the demise of the Phillips curve. We develop what we call the "Kaleckian Phillips curve", the slope of which is determined by the bargaining power of trade unions. We show that a nearly 90 percent reduction in ination volatility is possible even without any changes in monetary policy when the economy transitions from equal shares of power between workers and firms to a new balance in which firms dominate. In addition, we show that the decline of trade union power reduces the share of monopoly rents appropriated by workers, and thus helps explain the secular decline of labor share, and the rise of profit share. We provide time series and cross sectional evidence. [ABSTRACT FROM AUTHOR]

Theory predicts that "common ownership" (ownership of rivals by a common shareholder) can be anticompetitive because it reduces the weight firms place on their own profits and shifts weight toward rival firms held by common shareholders. In this paper we use accounting data from the banking industry to examine empirically whether shifts in the profit weights are associated with shifts in profits. We present the distribution of a wide range of estimates that vary the specification, sample restrictions, and assumptions used to calculate the profit weights. The distribution of estimates is roughly centered around zero, but we find statistically significant estimates in either direction in some cases. Economically, most estimates are fairly small. Our interpretation of these findings is that there is little evidence for economically important effects of common ownership on profits in the banking industry. [ABSTRACT FROM AUTHOR]

Comparing U.S. GDP to the sum of measured payments to labor and imputed rental payments to capital results in a large and volatile residual or "factorless income." We analyze three common strategies of allocating and interpreting factorless income, specifically that it arises from economic profits (Case II), unmeasured capital (Case K), or deviations of the rental rate of capital from standard measures based on bond returns (Case R). We are skeptical of Case II as it reveals a tight negative relationship between real interest rates and economic profits, leads to large uctuations in inferred factor-augmenting technologies, and results in profits that have risen since the early 1980s but that remain lower today than in the 1960s and 1970s. Case K shows how unmeasured capital plausibly accounts for all factorless income in recent decades, but its value in the 1960s would have to be more than half of the capital stock, which we find less plausible. We view Case R as most promising as it leads to more stable factor shares and technology growth than the other cases, though we acknowledge that it requires an explanation for the pattern of deviations from common measures of the rental rate. Using a model with multiple sectors and types of capital, we show that our assessment of the drivers of changes in output, factor shares, and functional inequality depends critically on the interpretation of factorless income. [ABSTRACT FROM AUTHOR]

The sectoral composition of global saving changed dramatically during the last three decades. Whereas in the early 1980s most of global investment was funded by household saving, nowadays nearly two-thirds of global investment is funded by corporate saving. This shift in the sectoral composition of saving was not accompanied by changes in the sectoral composition of investment, implying an improvement in the corporate net lending position. We characterize the behavior of corporate saving using both national income accounts and firm-level data and clarify its relationship with the global decline in labor share, the accumulation of corporate cash stocks, and the greater propensity for equity buybacks. We develop a general equilibrium model with product and capital market imperfections to explore quantitatively the determination of the ow of funds across sectors. Changes including declines in the real interest rate, the price of investment, and corporate income taxes generate increases in corporate profits and shifts in the supply of sectoral saving that are of similar magnitude to those observed in the data. [ABSTRACT FROM AUTHOR]

Russia's state-run VTB bank reported its August net income at RUB8.5bn ($133mn), an improvement on RUB2.4bn in the previous month and on RUB0.4bn a year ago. The lender's net income [...]

Russia's aggregate corporate profit in July 2016 totalled RUB326bn ($5bn), falling76% month-on-month, the Rosstat state statistics agency said on September 26. After almost doubling in m/m terms in June, the [...]

Russian firms are making strong profits thanks to the devaluation of the ruble and the economic recession, data from Rosstat shows, but this feel good factor is not yet enough [...]

Russia's aggregate corporate profit in May 2016 amounted to RUB736.5bn ($11.4bn) declining by 30% m/m, the Rosstat state statistics agency said on July 22. The indicator declined in m/m terms [...]

Russia's aggregate corporate profit in April 2016 amounted to RUB1.07 trillion ($16.3bn) declining by 58% m/m after more then doubling m/m in March, the Rosstat state statistics agency said on [...]