Report
How to explain the evolution of income distribution and inflation in OECD countries?
Since the late 1990s and prior to the coronavirus crisis in OECD countries, income distribution has skewed against wage earners while both labour cost growth and inflation have been subdued. An explanation of this phenomenon requires mechanism s in both the goods and services market and in the labour market: Corporate concentration has risen and companies have acquired dominant positions, which can explain the rise in profit margins (the skewing of income distribution against wage earners) but not by itself the absence of inflation; There has also been a rise in the participation rate (in the proportion of the working-age population in the labour market), which has led to weak growth in wages and in labour costs . This explains why the profit share of GDP has been able to rise without there being any inflation.
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Natixis
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Patrick Artus
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