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Michael Grömling IW-Trends No. 99 12. April 2017 The Development of Macroeconomic Income Distribution in Germany

Problems of economic growth and political polarisation in a number of developed economies are increasingly being blamed on inequality in distribution. Over the past decade this has stimulated analysis of macroeconomic income distribution.

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The Development of Macroeconomic Income Distribution in Germany
Michael Grömling IW-Trends No. 99 12. April 2017

The Development of Macroeconomic Income Distribution in Germany

IW-Trends

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German Economic Institute German Economic Institute

Problems of economic growth and political polarisation in a number of developed economies are increasingly being blamed on inequality in distribution. Over the past decade this has stimulated analysis of macroeconomic income distribution.

If there is a shift in national income creation towards capital income, this is bound to affect personal income distribution and how society perceives it. However, an international comparison of advanced countries over the last quarter-century shows no general or consistent fall in the labour share. Rather, among the 18 countries compared, no uniform pattern can be discerned. Apart from the effects of sometimes considerable fluctuation in the state of the economy, Germany had a stable labour share in the 1990s, and has had so again in recent years. When interpreting functional incomes and their distribution, attention needs to be paid to the limits and peculiarities of the underlying statistics, particularly with regard to corporate profits. The definition of employee compensation does not include the earned incomes of the self-employed, which are instead booked as corporate income. Moreover, the functional distribution of income provides a guide to the income position of private households. The sector accounts in the national account system indicate that the latter’s most recent share of Germany’s primary national income was 83 per cent.

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The Development of Macroeconomic Income Distribution in Germany
Michael Grömling IW-Trends No. 99 12. April 2017

Michael Grömling: Entwicklung der makroökonomischen Einkommensverteilung in Deutschland

IW-Trends

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German Economic Institute German Economic Institute

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A Focus on the Middle Class - Demarcation, Development and Mobility
Judith Niehues / Maximilian Stockhausen IW-Trends No. 2 16. May 2022

A Focus on the Middle Class - Demarcation, Development and Mobility

In 2018, roughly every second German was a member of the middle class as measured by income, a proportion which has barely changed for more than a decade. However, the lower income threshold of this middle-income group has risen - an indication of increased ...

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Matthias Diermeier / Judith Niehues IW-Trends No. 3 15. September 2021

Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception

A lively democracy thrives on the struggle between different interest groups for majority opinion on specific issues. Though the institutionalised process of balancing interests and hearing opposing points of view takes time, acceptance of these parliamentary ...

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