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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

German Economic Institute (IW) German Economic Institute (IW)

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

German Economic Institute (IW) German Economic Institute (IW)

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Current trends and challenges for distribution policy
Judith Niehues / Maximilian Stockhausen IW-Report No. 49 17. December 2024

IW Distribution Report 2024: Current trends and challenges for distribution policy

The coronavirus pandemic, the energy price crisis and the associated high inflation rates have left their marks. The fall in real wages up to the beginning of 2023 has offset some of the real wage growth of previous years: on average for 2023, the real wage ...

IW

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Thomas Obst / Maximilian Stockhausen IW-Analyse No. 155 9. January 2024

A Macroeconomic Analysis of Wage-Price Spirals

The subject of this Analysis is the forms that wage-price spirals can take and how they influence macroeconomic stability and inflationary trends in Germany.

IW

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