IDEAS home Printed from https://ideas.repec.org/a/taf/revpoe/v36y2024i4p1436-1464.html

Kaleckian Models of Conflict Inflation, Distribution and Employment: A Comparative Analysis

Author

Listed:
  • Eckhard Hein
  • Christoph Häusler

Abstract

This paper conducts a systematic comparison of two main textbook variants within the Kaleckian tradition of post-Keynesian conflict inflation and distribution theory: the Blecker and Setterfield (2019) and Lavoie (1992; 2022) (BSL) model based on Dutt (1987), and the Hein (2023a) and Hein and Stockhammer (2011) (HS) model founded on Rowthorn (1977). Focusing on a basic closed economy framework sans government, we explore various iterations of each approach. Our analysis reveals that disparities chiefly centre around the treatment of price inflation expectations (‘indexation’) and the incorporation of bargaining power in wage- and price-inflation equations. BSL variants generally yield stable price Phillips curves, stable distribution and employment curves, and hence stable equilibria. Only the BSL-3 variant with complete indexation and complete pass-through generates shifting Phillips and employment curves, implying instability. It is thus similar to the HS-0 approach, which has bargaining power and complete indexation representing adaptive expectations in wage inflation and incomplete pass-through in price inflation. Introducing a workers’ wage share target directly into the wage-inflation equation, but keeping full indexation/adaptive expectations in wage inflation and incomplete pass-through in price inflation, allows for stable and even flat Phillips curves, stable distribution and employment curves, and hence stable equilibria in the HS approach.

Suggested Citation

  • Eckhard Hein & Christoph Häusler, 2024. "Kaleckian Models of Conflict Inflation, Distribution and Employment: A Comparative Analysis," Review of Political Economy, Taylor & Francis Journals, vol. 36(4), pages 1436-1464, October.
    • Handle: RePEc:taf:revpoe:v:36:y:2024:i:4:p:1436-1464
    DOI: 10.1080/09538259.2024.2355557
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09538259.2024.2355557
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09538259.2024.2355557?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Woodgate, Ryan, 2025. "A general theory of conflict inflation," IPE Working Papers 256/2025, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Hein, Eckhard, 2025. "Kaleckian economics after Kalecki: A survey," IPE Working Papers 257/2025, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Campana, Juan Manuel, 2024. "Currency devaluations, distribution conflict and inflation in a post-Kaleckian open economy model," IPE Working Papers 240/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Morlin, Guilherme Spinato & Stamegna, Marco & D'Alessandro, Simone, 2025. "Energy prices, inflation, and distribution: A simulation model and policy analysis for Italy," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 28-39.

    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:revpoe:v:36:y:2024:i:4:p:1436-1464. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRPE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.