Do Higher Markups Lower Labor’s Share of Income?
Abstract: Higher price markups are typically associated with larger profits at the expense of labor's share of income. In this Economic Commentary, we challenge this view. The key to our argument is the reallocation of market shares toward labor-intensive firms, a reallocation caused by an increase in the prices of capital goods as a result of higher markups.
File format is text/html
Description: Persistent Link
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Commentary
Publication Date: 2024-02-05