IDEAS home Printed from https://ideas.repec.org/p/pke/wpaper/pkwp2522.html
   My bibliography  Save this paper

Endogenous money and inflation: an introductory post-Keynesian/Kaleckian conflict inflation model

Author

Listed:
  • Cara Dabrowski
  • Eckhard Hein

Abstract

Based on the notion of endogenous money, which precludes inflation from being a monetary phenomenon, this contribution develops an introductory macroeconomic model of conflict inflation aimed at undergraduate teaching. Our demand-driven model includes Kaleckian mark-up pricing determining firms’ target profit shares, while workers’ target wage shares are determined by institutional features of the labour market and the social benefit system and the employment rate. Conflict inflation emerges if these targets are inconsistent with each other. This basic version of our teachable Kaleckian macroeconomic model incorporates the main components of aggregate demand and their determinants for a closed (private) economy, as well as conflicting income claims between workers and capitalists. The model is then applied in a stylised way to the recent inflationary shocks taking off in 2021. It aims to provide a basic heterodox approach, which is both straightforward and effective in facilitating students’ understanding of inflationary dynamics.

Suggested Citation

  • Cara Dabrowski & Eckhard Hein, 2025. "Endogenous money and inflation: an introductory post-Keynesian/Kaleckian conflict inflation model," Working Papers PKWP2522, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp2522
    as

    Download full text from publisher

    File URL: https://postkeynesian.net/media/working-papers/PKWP2522.pdf
    File Function: First version, 2025
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • 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:pke:wpaper:pkwp2522. 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: Jo Michell (email available below). General contact details of provider: https://edirc.repec.org/data/pksggea.html .

    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.