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Conflict inflation without (explicit) unemployment

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  • Eric Kemp-Benedict

Abstract

Since its introduction by Rowthorn (1977), the idea that inflation is always and everywhere a result of conflicting distributional claims has become widely accepted by post-Keynesians. This paper contributes to the literature with a proposed behavioural rule that abstracts from both unemployment and labour participation. While they are both presumed to be causally relevant, the causal chains are captured through a rule in which inflation is driven by the deviation between the growth rate of labour demand and that of the working age population. The proposed behavioural rule can be incorporated into a variety of models. One is proposed for concreteness. In the example model, profit-led behaviour produces a stable equilibrium. In the more empirically supported case of wage-led behaviour, stability is not guaranteed, but becomes more likely under cost share-induced technological change.

Suggested Citation

  • Eric Kemp-Benedict, 2026. "Conflict inflation without (explicit) unemployment," Working Papers PKWP2609, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp2609
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    References listed on IDEAS

    as
    1. Amitava Krishna Dutt, 2006. "Aggregate Demand, Aggregate Supply and Economic Growth," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(3), pages 319-336.
    2. Eric Kemp-Benedict, 2022. "A classical-evolutionary model of technological change," Journal of Evolutionary Economics, Springer, vol. 32(4), pages 1303-1343, September.
    3. Eckhard Hein & Artur Tarassow, 2010. "Distribution, aggregate demand and productivity growth: theory and empirical results for six OECD countries based on a post-Kaleckian model," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 34(4), pages 727-754.
    4. Storm, Servaas & Naastepad, C. W. M., 2012. "Macroeconomics Beyond the NAIRU," Economics Books, Harvard University Press, number 9780674062276, march.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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