Growth, Factor Shares, and Factor Prices

Research output: ThesisDoctoral Thesis (compilation)


This dissertation is a study in empirical macroeconomic history. The first two papers concern themselves with the functional distribution of income. The third paper is an examination of global real interest rates, and the final paper examines city growth in Sweden over the last two hundred years. While this thesis is not about secular stagnation per se, every articles is related in one way or the other to Larry Summers' theory.

The Kappa discusses in greater length the theory of secular stagnation and the related macroeconomic phenomena that have ailed advanced economies in recent years, including low real interest rates, higher debt levels and equity prices, and rising inequality, including lower labor shares.

The first paper of the thesis examines the downward trend in the US labor share since the postwar period. We establish that a significant part of the decline is related to rising imputations in the GDP caluclations. More specifically, economy-wide depreciation and imputed rents have increased substantially in recent years.

The second paper uses long-run panel data for 17 advanced economies and establishes a relationship between rising asset prices and the increasing capital share of GDP. We find a signficant effect of stock price booms on the capital share. The relationship for housing booms is weaker.

The third paper of the thesis exmines global real interest rates for the same set of advanced economies from 1870 to today. Using a time series factor model, we establish that a substantial part of the variation in real interest rate is determined by global factors. In contrast to neo-keynesian models, this finding implies that Central Banks have less monteary autonomy than what is commonly assumed.

Finally, the last paper examines Swedish city growth from the pre-industrial period to today. We estimate Zipf's law for each decade from 1810 to 2010. Using the rank-size rule as a bechmark, we also show that, with the exception of Stockholm, most large Swedish cities are considerably smaller than what the power law would suggest. Given the positive relationship between city size and productivity, this finding might even have macroeconomic implications.


Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economic History


  • secular stagnation, labor share, imputations, asset prices, real interest rate, Zipf's law
Original languageEnglish
Awarding Institution
Supervisors/Assistant supervisor
Award date2019 Oct 18
Place of PublicationLund
Print ISBNs978-91-87793-60-8
Electronic ISBNs978-91-87793-61-5
Publication statusPublished - 2019 Sep 12
Publication categoryResearch

Bibliographic note

Defence details Date: 2019-10-18 Time: 14:15 Place: EC3:210 External reviewer Name: Abildgren, Kim Title: Chief Advisor Affiliation: Danmarks Nationalbank ---

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