1/3  BIS central bankers' speeches  In what is perhaps one of the most enlightening studies on the causes of the declining labour share3, Loukas and his co-author present a unified empirical exploration of these three explanations through the lens of the long-term path of the economy.
Using US data, they find that the decline in labour income shares and the low capital remuneration do not reflect an increase in profits, and that declining competition or increasing market power are inconsistent with the data on labour income. This finding is important, as declining competition had been the most popular explanation until their paper was released.