@martamaes.bsky.social ?

In follow-up work that I will submit for review in coming week, I ask what the consequences are for other stakeholders?
sneak peak: ratchet events cause persistently: 1) higher payout ratios, 2) higher indebtedness and 3) lower investments.
Hopefully coming soonish!

2) At the firm level each ratchet event (falling profits, steady payouts) persistently raises the payout ratio for a decade (staggered DiD)

Payouts fractionally adjust upwards in good times but are downward rigid in bad times - just like a ratchet.
What does the data say?
1) Aggregate payout ratios are structured along the frequency of ratchet behaviour, across size, sector & region (although differences do exist)

Payout ratios ⬆️not because of some shareholder bonanza, but rather because fluctuations in profits are not met by fluctuations in shareholder income.
=> Upward trend in both payout ratios and profits can emerge despite falling payout ratios whenever profits rise!

And here is a sneak peak in my next paper on the consequences for investments:

In my actual research I look into how exactly that happens and what the consequences are. I find that shareholder remunerations are downward sticky in hard times and that that it is when resources become scarce that shareholder power manifests.
See a thread here: bsky.app/profile/bako...

3) Over the recent decades, shareholders have been increasing their claim over firm resources, while the stock market serves less a a source of funds for new or existing companies.

2) this question is answered by the excellent @lenorepalladino.bsky.social for @rooseveltinstitute.org, read it there (spoiler: mostly not!) : rooseveltinstitute.org/publications...

1) Stock wealth in Belgium is not negligible, but what crucially matters is its distribution. Wealth is very unequally distributed, financial wealth already much more so but stock wealth is the item that is most unequal, certainly in Belgium where we have a pay as you go pension system

Daarbij is cruciaal: niet de toename van dividenden of buybacks verdringt investeringen, maar juist hun neerwaartse rigiditeit! Als bedrijf het tijdelijk moeilijk heeft weigeren aandeelhouders te delen in de klappen, waardoor bedrijf genoodzaakt is te snijden in investeringen en/of schuld aan t gaan

Bedankt Rodrigo! Misschien een beetje provocerend geformuleerd, maar de aandeelhouder heeft in toenemende mate inderdaad iets parasitairs. In paper (net af) toon ik aan hoe bedrijven herverdelen van investeringen naar aandeelhouders, waarbij ze onze economie vandaag en in toekomst schaden

I mean, inflation is not all bad and shouldn't be fought at all costs. Depending on 1) the source 2) strength of Labour unions and Labour markets and 3) the policy reaction, it could be a force for good. Updating our toolbox to fight inflation as Isabella has been arguing for years is still crucial!

Very interesting work! However I am bit reluctant to amplify inflation aversion in general, given that coordinated Wage driven inflation might be exactly what we need at this point (definitely in Germany) and amping up inflation aversion legitimises lab market slack, high int rates, schw. Null,...

This likely has real consequences. When firms maintain stable payouts despite declining profits, they must either resort to cutting investments, R&D expenditures, or labor costs or to taking on higher levels of (unproductive) debt.

Payouts fractionally adjust upwards in good times but are downward rigid in bad times - just like a ratchet.

1) Aggregate payout ratios are structured along the frequency of ratchet behaviour
2) At the firm level each ratchet event persistently raises the payout ratio for a decade (staggered DiD)

Short summary: bakoumertens.quarto.pub/bakoumertens...
People tend to focus on large increases in dividends or share repurchases (payouts), but I show that it is not rising payouts that should attract our attention, but rather their inability to fall.