Thank you to @tylercowen for writing up our paper on @MargRev!
Tyler makes a number of thoughtful critiques. @LHSummers and I respond to a few of these here:
[1/N]
(with more detailed responses to Tyler's Qs, & other Qs, at this link: scholar.harvard.edu/stansbury/decl…)
Tyler makes a number of thoughtful critiques. @LHSummers and I respond to a few of these here:
[1/N]
(with more detailed responses to Tyler's Qs, & other Qs, at this link: scholar.harvard.edu/stansbury/decl…)
Q: Is this to do with wage getting closer to MPL?
A: Quite plausible that employers becoming more ruthless and increased use of monitoring technology led to pay being pushed down– closer to MPL in perf comp labor market (but may be below MPL in monopsonistic labor market) [2/N]
A: Quite plausible that employers becoming more ruthless and increased use of monitoring technology led to pay being pushed down– closer to MPL in perf comp labor market (but may be below MPL in monopsonistic labor market) [2/N]
Q:What about top earners?
A: We're measuring worker power for the *majority* of workers, excl top earners. Definitely possible that the fall in worker power involved a redistribution of rents up to managers/executives/people who start their own companies (See Section V.C)[3/N]
A: We're measuring worker power for the *majority* of workers, excl top earners. Definitely possible that the fall in worker power involved a redistribution of rents up to managers/executives/people who start their own companies (See Section V.C)[3/N]
Q: What are we saying about secular stagnation?
A: Secular stagnation results from an excess desire to save, relative to the desire to invest. Falling worker power redistributes income to the rich, who have a higher propensity to save. …
[4/N]
A: Secular stagnation results from an excess desire to save, relative to the desire to invest. Falling worker power redistributes income to the rich, who have a higher propensity to save. …
[4/N]
… We think secular stagnation is exemplified by low private return to capital investment which in a noncompetitive world may or may not be the same thing as an abnormally low profit rate or capital share [5/N]
Q: What about Rognlie’s finding on housing?
A: We focus on the *corporate* sector only, to avoid issues about housing (and issues about imputation of mixed income). Housing and land ownership can’t explain the decline in the labor share in the corporate sector.
[6/N]
A: We focus on the *corporate* sector only, to avoid issues about housing (and issues about imputation of mixed income). Housing and land ownership can’t explain the decline in the labor share in the corporate sector.
[6/N]
