Rising markups and the fall of the labor share: Predicting the effects of industry market power in the U.S.
This paper examines the downward trend in the U.S. labor share of income, which is shown to have declined significantly over the last two decades. This phenomenon is in direct contradiction with standard neoclassical growth theory, which postulates constant factor shares of income. Increased trade with low-income countries, financialization, and the decline of labor unions are some of the explanat
