Economists have focused less attention on the factors underlying the apparent decline in labor’s share of income than they have on the rise in income inequality in general, but among the candidates are technological change, which has allowed for the substitution of capital for labor in the handling of routine tasks, an increase in firm bargaining power, and perhaps a decline in competition in product markets.
The Bank is also the banker to the Government and commercial banks, for which it serves as the lender of last resort. In addition, as economic and financial advisor to the Government, the Bank worked very closely with the authorities throughout the year in addressing the challenging external and domestic macroeconomic environment.