According to the Karabarbounis and Neiman (2014) the global labour share of output fell from 65% in 1980 to 59% in 2012. Over the same period, US labour productivity has grown by 90%, but the median real wage grew only 10%. This contradicts the standard Cobb-Douglas production function used in competitive macroeconomic models. An answer may be that globalisation has changed the power structure in labour markets. Our project for Rebuilding Macroeconomics challenges the competitiveness of factor markets and the edifice of the distribution of income.

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