Conflicting claims and equilibrium adjustment processes in a stock-flow consistent macro model
We revisit the old but still vibrant Post-Keynesian debate over "fully-adjusted positions", defined by the long-run equality of actual and standard utilisation rates. The central proposition of this paper is that in a world where different groups inside and outside firms have different objectives, the equality of actual and standard utilisation should not be treated as the (only possible) long-run equilibrium condition. The argument is illustrated in a model of target return pricing with conflict inflation, building on Lavoie (2002, 2003). A "common language" for the conflicting claims by shareholders, managers, workers and banks is developed in terms of target profit rates, and it is shown that these contradictory claims can be partly reconciled through variations in the utilisation rate. The analysis unifies history and equilibrium in the sense that the nature of and the adjustment to the final equilibrium position depends on the objectives of the dominant social groups. We distinguish a "Fordist regime" and a "financialisation regime" and produce simulation results within a simple stock-flow consistent model that are broadly consistent with the stylised facts of these distinct historical phases of capitalism.
|Date of creation:||2008|
|Contact details of provider:|| Postal: Hans-Böckler-Straße 39, 40476 Düsseldorf|
Phone: +49 211 7778 234
Fax: +49 211 7778 4234
Web page: http://www.imk-boeckler.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Till van Treeck, 2007.
"A Synthetic, Stock-Flow Consistent Macroeconomic Model of Financialisation,"
IMK Working Paper
06-2007, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Till van Treeck, 2009. "A synthetic, stock--flow consistent macroeconomic model of 'financialisation'," Cambridge Journal of Economics, Oxford University Press, vol. 33(3), pages 467-493, May.
When requesting a correction, please mention this item's handle: RePEc:imk:wpaper:9-2008. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Nemitz)
If references are entirely missing, you can add them using this form.