This study approaches the connection between distribution and business cycles by examining the profit shares' as well as the top 1% income and wealth shares’ long-term swings and patterns of movements over cycles in the post-war U.S. It is assessed that the primarily the profit share is subject to considerable fluctuations over business cycles, with the dominating pattern of the latter changing over time, along with the long-term trends of the distributional indicators that take the form of a ‘U-shape’ in the timeframe under consideration The majority of expansions from 1949 to 1970 were ‘wage-favouring’, while from 1982 to 2020, the majority of expansions were ‘profit-favouring’, with ‘wage-favouring’ phases preceding recessions. A widely based fundamental empirical analysis is used to operationalise and analyse concepts from ‘Classical’, ‘Keynes-Minskyan’, and ‘Kalecki-Steindlian’ theories as well as the interaction between functional income and purpose of expenditure in order to explain these phenomena. The findings suggest that, apart from the 1970s, under-investment was the dominant endogenous driver of output stagnation that both depends on and shapes distributional outcomes; however, not because of insufficient capital. Prior to 1970, persistent high investment was discouraged by the equitable institutional environment and declining profitability. After 1982, increasing inequality resulting from ‘profit-favouring’ expansion stages led to accumulating consumer debt and capitalists prioritising liability restructuring as well as speculation on asset price inflation over productive investments. Investment and aggregate demand decline as a result. The study underlines the complexity, significance, and dynamism of the relationship between distribution and economic activity, which is testament to the necessity of research trying to foster an integrative understanding of growth and distribution.