Check Fred database online

8. The labor share and Cobb-Douglas production (a FRED question): Using the FRED database, download a graph of the share of income paid to labor for the nonfarm business sector of the U.S. economy, back to 1947. (For an introduction to FRED, see the case study "The FRED Database" in Chapter 2 on page 34.) (a) Display this graph. (b) The graph most likely shows an index (e.g., normalized so the value in some year is 100) rather than the share itself. Assuming the labor share in 1965 to 1980 averaged 2/3, approximately what value is the labor share for your most recent data point? (c) What does this graph suggest about the validity of our assumption that the production function is Cobb-Douglas? 14