Macroeconomic Dynamics of Labour Income Share in the United States: Evidence From MARS

Macroeconomic dynamics of labour income share (will be referred to herein as lis) in the United States for the period of 1948Q1-2019Q1 are tried to be determined in this study, where Multivariate Adaptive Regression Splines (will be referred to herein as MARS) approach is employed. In order to investigate sectoral differences, the business, non-farm, and non-finance sectors are evaluated, respectively. In accordance with the obtained results, it may be observed that the macroeconomic dynamics of lis in the business sector are productivity, export, profit, gross private domestic investment, unemployment rate, current account balance, gross domestic product, and tax revenue, respectively. Related macroeconomic dynamics of lis concerning non-farm sector are productivity, current account balance, gross private domestic investment, export, consumer price index, gross domestic product, profit, unemployment rate, and gross government investment. Aforementioned dynamics for non-finance sector are also profit, productivity, import, gross domestic product, tax revenue, gross government investment, consumer price index, and unemployment rate. In accordance with this, the most significant dynamic with respect to lis is profit in the non-finance sector, while it is productivity in the business and non-farm sectors.