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Conflict, Distribution, and Finance in Alternative Macroeconomic Traditions

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  • Thomas I. Palley

    (AFL-CIO, 815 Sixteenth Street, N.W., Washington, DC 20006, tpalley@aflcio.org)

Abstract

Power and conflict are issues that loom large in the work of David Gordon. They are also issues that are largely absent in conventional macroeconomics. This paper shows how these concepts can be introduced within alternative macroeconomic traditions, and it shows how their significance depends on the particulars governing the construction of the macroeconomic process. The paper details the implicit economic process embedded in the new classical, neo-Keynesian, classical Marxist, and Kaleckian constructions of macroeconomics. It then develops a general post Keynesian model that fuses the insights of the classical Marxist and Kaleckian models regarding the significance of conflict and income distribution, with the insights of the neo-Keynesian model regarding the place of finance. Last, the paper argues that finance matters both for aggregate demand and as a worker discipline device. This represents a supply side channel for finance that links with modern new classical models that emphasize credit rationing.

Suggested Citation

  • Thomas I. Palley, 1999. "Conflict, Distribution, and Finance in Alternative Macroeconomic Traditions," Review of Radical Political Economics, Union for Radical Political Economics, vol. 31(4), pages 102-132, December.
    • Handle: RePEc:sae:reorpe:v:31:y:1999:i:4:p:102-132
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    Cited by:

    1. Mark Setterfield & Robert A. Blecker, 2022. "Structural change in the US Phillips curve, 1948-2021: the role of power and institutions," Working Papers 2201, New School for Social Research, Department of Economics.
    2. Philipp Heimberger, 2021. "Do higher public debt levels reduce economic growth?," FMM Working Paper 74-2021, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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