Estimating a Time-Varying Distribution-Led Regime

32 Pages Posted: 15 Feb 2023

See all articles by Michalis Nikiforos

Michalis Nikiforos

University of Geneva

Paul Carrillo-Maldonado

Universidad de las Américas (UDLA); Ecuadorian Political Economy Lab (EPEL)


This paper estimates the distribution-led regime of the US economy for the period 1947–2019. We use a time varying parameter model, which allows for continuous changes in the regime over time. To the best of our knowledge this is the first paper that has attempted to do this. This innovation is important, because there is no reason to expect that the regime of the US economy (or any economy for that matter) will remain constant over time. On the contrary, there are significant reasons that point to changes in the regime. We find that the US economy became more profit-led in the first postwar decades until the 1970s and has become less profit-led since; it is slightly wage-led over the last fifteen years, although this wage-ledness is not always statistically significant.

Keywords: Wage-led, Profit-led, Distribution, Growth, Time-Varying Parameters (VAR)

Suggested Citation

Nikiforos, Michalis and Carrillo-Maldonado, Paul, Estimating a Time-Varying Distribution-Led Regime. Available at SSRN: or

Michalis Nikiforos (Contact Author)

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205

Paul Carrillo-Maldonado

Universidad de las Américas (UDLA) ( email )

de los colimes, Av. De los Granados
Quito, Pichincha 170137

HOME PAGE: http://

Ecuadorian Political Economy Lab (EPEL) ( email )

Quito, Pichincha


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