On the Functional Income Distribution in the Portuguese Economy

Abstract

Based on an empirical analysis of the evolution of the labor share of income in Portugal between 1960 and 2017, this article proposes an interpretation of the evolution of the functional distribution of income in the Portuguese economy which is characterised by the existence of different characteristic periods. Depending on the period, we find empirical evidence of the existence of strong and significant associations between the functional distribution of income and the real GDP growth rate, the inflation rate and the unemployment rate, respectively. These findings suggest the succession of different regimes regulating the functional distribution of income in the Portuguese economy, which go from countercyclical to procyclical over time.