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The demand and distributive regimes are estimated from 62 countries around the world based on the Structuralist Goodwin model. The distributive regime appears to be Marxian/profit-squeeze and the demand exhibits a weekly profit-led regime. The profitled demand regime and the profit-squeeze distributive regime are stronger in advanced economies than in emerging economies. The results are also supported when the slopes are allowed to be varied across regions. In the long run, the results reveal that the collective wage suppression would result only in declining wage share, and no positive gain in utilization is found both in developed and developing countries.

We explore four decades of short and long run interactions between income distribution and real economic activity for a panel of OECD countries. Allowing for predator-prey dynamics, we find a convergent, rather than persistent, cycle exhibiting profit-led dynamics. Our regressions suggest that the dynamic interaction of these two variables is rather complicated. Estimating the long run point, we argue that this equilibrium has been shifting as a matter of public policy. We hypothesize that a race to the bottom arises from a need to be competitive in globalized markets. We report evidence that globalization does have a negative long-run effect on the wage share, and perhaps a positive effect on utilization. We also find that other factors have been important: unionization has been pro-labor, while contractionary monetary policy and R&D spending have been anti-labor.

We explore four decades of cyclical and long-run dynamics in income distribution and economic activity for a panel of thirteen OECD countries, as measured by the wage share and the output gap. When modeled as a Goodwin model, our results suggest that economic activity is weakly profit-led and that the wage share is pro-cyclical. Our estimated model is dynamically stable and has a long-run equilibrium in distributionutilization space. An extension of the model suggests that this equilibrium has been shifting south-west towards a lower wage share and a loss of economic activity. This finding is suggestive of a coordination failure among industrialized nations; it could be that the governments of these countries are engaging in a race to the bottom in terms of the wage share; it may even be that this race has the undesirable consequence of decreasing economic efficiency.

We explore four decades of cyclical and long-run dynamics in income distribution and economic activity for a panel of thirteen OECD countries, as measured by the wage share and the output gap. When modeled as a Goodwin model, our results suggest that economic activity is weakly profit-led and that the wage share is pro-cyclical. Our estimated model is dynamically stable and has a long-run equilibrium in distribution-utilization space. An extension of the model suggests that this equilibrium has been shifting south-west towards a lower wage share and a loss of economic activity. This finding is suggestive of a coordination failure among industrialized nations; it could be that the governments of these countries are engaging in a race to the bottom in terms of the wage share; it may even be that this race has the undesirable consequence of decreasing economic efficiency.

We explore four decades of cyclical and long-run dynamics in income distribution and economic activity for a panel of thirteen OECD countries. Based on predator-prey dynamics, we find that the business cycle is weakly profit-led , and that the long-run equilibrium has been shifting towards a lower wage share. We hypothesize that a race to the bottom can arise from a need to be competitive in globalized markets. While globalization does have a negative effect on the wage share, other factors and trends have independent influences. Unionization is pro-labor, while contractionary monetary policy, R&D spending and more financialization are anti-labor.