Template-Type: ReDIF-Paper 1.0 
Title: Endogenous Labor Share Cycles: Theory and Evidence
Author-Name: Jakub Growiec 
Author-Name: Peter McAdam 
Author-Name: Jakub Mućk 
Abstract: Based on long US time series we document a range of empirical properties of the labor's share of GDP.We identify its substantial medium-to-long run, pro-cylical swings and show that most of its variancelies beyond business-cycle frequencies. We explore the extent to which these empirical regularities can beexplained by a calibrated micro-founded, nonlinear growth model with normalized CES technology andendogenous labor- and capital augmenting technical change driven by purposeful directed R&D investments.We demonstrate that dynamic macroeconomic trade-offs created by arrivals of both types of newtechnologies can lead to prolonged swings in the labor share (and other model variables) due to oscillatoryconvergence to the balanced growth path as well as emergence of limit cycles via Hopf bifurcations. Bothpredictions are consistent with the empirical evidence.
Number: 2016-015
Length: 55 pages 
Creation-Date: 2016-09
Keywords: Labor income share, Endogenous cycles, Factor-augmenting endogenous technical change, R&D, CES, Normalization.
Classification-JEL: E25, E32, O33, O41
File-URL: https://hdl.handle.net/20.500.12182/1160
File-Format: Application/pdf
DOI: 10.33119/kaewps2016015
Handle: RePEc:sgh:kaewps:2016015