labor share

The Cyclical Behavior of the Price-Cost Markup

The markup of price over marginal cost increases in response to a positive shock to demand and TFP but decreases in response to an investment-specific technology shock. In contrast, how the markup is measured matters for its unconditional cyclicality.

Industry Evidence on the Effects of Government Spending

An increase in government demand raises output and hours in manufacturing industries, lowers real product wages and labor productivity, and has no effect on the markup.