Capital productivity and the decreasing wageshare in the United States: a Keynesian Approach

Abstract

We argue that in the US there is a causal relationship runningunidirectionally from negative shocks in capital productivity tonegative variations in the wage share. We sustain that, facedwith a capital productivity decrease, the US firm sector pusheswages down to maximize the rate of profit. Through asym-metric SVAR techniques that are robust to endogeneity andstructural breaks; we show that decreases in capital productiv-ity unidirectionally cause decreases in the wage share. Weoffer some possible explanations for that