Friday, September 01, 2006

A Picture is Worth A Thousand Words - Or Is It?

This graph of Selected Component Shares of National Income, showing corporate profits compared to compensation, speaks very loudly; only I'm not sure what it's saying, other than that corporations are increasing profits at a fast clip. (Source)

[Click on image for larger version. Thanks to St. Louis Fed.]

How can corporations show so much profit and not have the increase show up in a correspondingly robust GDP increase? I wish the science of economics could interpret these figures with some accuracy; but unfortunately, we're not there yet.


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