IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/5624.html
   My bibliography  Save this paper

Inflation as restructuring. A theoretical and empirical account of the U.S. experience

Author

Listed:
  • Nitzan, Jonathan

Abstract

This work is a PhD dissertation, written at the Department of Economics, McGill University. The thesis offers a new framework for inflation as a process of restructuring. Contrary to existing theories of inflation, which tend to take structure and institutions as given for the purpose of analysis, we argue that inflation could be understood only in terms of ongoing structural and institutional change. In the modern context of large-scale business enterprise, inflationary restructuring arises as an integral part of capital accumulation. On the aggregate level, inflation appears as stagflation, with the expansion of pecuniary values in the 'business' sphere depending on the strategic limitation of productive activity in the 'industrial' realm. This stagflationary interaction between 'business' and 'industry' is, in turn, linked (on the disaggregate level) to the dynamic formation and reformation of 'distributional coalitions' and the process of aggregate concentration. An empirical analysis of the U.S. experience between the early 1950s and the late 1980s reveals two regimes of inflationary restructuring: the first, which lasted until 1970, involved rapid increases in aggregate concentration with relatively modest stagflation, whereas the second, post-1970 regime consisted of stable (or even declining) concentration amidst severe stagflation.

Suggested Citation

  • Nitzan, Jonathan, 1992. "Inflation as restructuring. A theoretical and empirical account of the U.S. experience," MPRA Paper 5624, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5624
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/5624/1/MPRA_paper_5624.pdf
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ross, Stephen A & Wachter, Michael L, 1973. "Wage Determination, Inflation, and the Industrial Structure," American Economic Review, American Economic Association, vol. 63(4), pages 675-692, September.
    2. Frydman, Roman, 1981. "Sluggish Price Adjustments and the Effectiveness of Monetary Policy under Rational Expectations: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 13(1), pages 94-102, February.
    3. Robert J. Gordon, 1975. "The Impact of Aggregate Demand on Prices," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 6(3), pages 613-670.
    4. Harry E. McAllister, 1961. "Statistical Factors Affecting the Stability of the Wholesale and Consumers' Price Indexes," NBER Chapters,in: The Price Statistics of the Federal Goverment, pages 373-418 National Bureau of Economic Research, Inc.
    5. Aaronovitch, S & Sawyer, Malcolm C, 1981. "Price Change and Oligopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 30(2), pages 137-147, December.
    6. Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Oxford University Press, vol. 1(3), pages 215-239, September.
    7. Louis Phlips, 1980. "Intertemporal Price Discrimination and Sticky Prices," The Quarterly Journal of Economics, Oxford University Press, vol. 94(3), pages 525-542.
    8. Ripley, Frank C & Segal, Lydia, 1973. "Price Determination in 395 Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 55(3), pages 263-271, August.
    9. Godley, Wynne A H & Nordhaus, William D, 1972. "Pricing in the Trade Cycle," Economic Journal, Royal Economic Society, vol. 82(327), pages 853-882, September.
    10. Yakov Amihud & Haim Mendelson, 1983. "Price Smoothing and Inventory," Review of Economic Studies, Oxford University Press, vol. 50(1), pages 87-98.
    11. Carlton, Dennis W, 1979. "Contracts, Price Rigidity, and Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1034-1062, October.
    12. R. L. Hall & C. J. Hitch, 1939. "Price Theory And Business Behaviour," Oxford Economic Papers, Oxford University Press, vol. 0(1), pages 12-45.
    13. Laidler, David E W & Parkin, J Michael, 1975. "Inflation: A Survey," Economic Journal, Royal Economic Society, vol. 85(340), pages 741-809, December.
    14. Dixon, R J, 1983. "Industry Structure and the Speed of Price Adjustment," Journal of Industrial Economics, Wiley Blackwell, vol. 32(1), pages 25-37, September.
    15. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
    16. Maddock, Rodney & Carter, Michael, 1982. "A Child's Guide to Rational Expectations," Journal of Economic Literature, American Economic Association, vol. 20(1), pages 39-51, March.
    17. Wiles, Peter, 1973. "Cost Inflation and the State of Economic Theory," Economic Journal, Royal Economic Society, vol. 83(330), pages 377-398, June.
    18. J. C. R. Rowley & D. A. Wilton, 1974. "The Sensitivity of Quarterly Models of Wage Determination to Aggregation Assumptions," The Quarterly Journal of Economics, Oxford University Press, vol. 88(4), pages 671-680.
    19. Silberston, Aubrey, 1970. "Surveys of Applied Economics: Price Behaviour of Firms," Economic Journal, Royal Economic Society, vol. 80(319), pages 511-582, September.
    20. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    21. Milton Moore, 1972. "Stigler on Inflexible Prices," Canadian Journal of Economics, Canadian Economics Association, vol. 5(4), pages 486-493, November.
    22. Robert E. Hall, 1980. "Employment Fluctuations and Wage Rigidity," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(1, Tenth ), pages 91-142.
    23. Dalton, James A, 1973. "Administered Inflation and Business Pricing: Another Look," The Review of Economics and Statistics, MIT Press, vol. 55(4), pages 516-519, November.
    24. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    25. Fortin, Pierre, 1989. "How 'natural' is Canada's high unemployment rate?," European Economic Review, Elsevier, vol. 33(1), pages 89-110, January.
    26. George J. Stigler & James K. Kindahl, 1970. "The Behavior of Industrial Prices," NBER Books, National Bureau of Economic Research, Inc, number stig70-1, July.
    27. Laden, Ben E, 1972. "Perfect Competition, Average Cost Pricing and the Price Equation," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 84-88, February.
    28. Eichner, Alfred S, 1973. "A Theory of the Determination of the Mark-up Under Oligopoly," Economic Journal, Royal Economic Society, vol. 83(332), pages 1184-1200, December.
    29. Chandler, Alfred D., 1959. "The Beginnings of “Big Business” in American Industry," Business History Review, Cambridge University Press, vol. 33(01), pages 1-31, March.
    30. Phelps, Edmund S & Taylor, John B, 1977. "Stabilizing Powers of Monetary Policy under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 163-190, February.
    31. Domberger, Simon, 1979. "Price Adjustment and Market Structure," Economic Journal, Royal Economic Society, vol. 89(353), pages 96-108, March.
    32. Taylor, John B, 1975. "Monetary Policy during a Transition to Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 83(5), pages 1009-1021, October.
    33. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    34. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
    35. David M. Kotz, 1982. "Monopoly, Inflation, and Economic Crisis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 14(4), pages 1-17, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. repec:zbw:espost:157773 is not listed on IDEAS
    2. repec:zbw:espost:157791 is not listed on IDEAS
    3. Nitzan, Jonathan & Bichler, Shimshon, 2001. "Going Global: Differential Accumulation and the Great U-turn in South Africa and Israel," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 21-55.
    4. Bichler, Shimshon & Nitzan, Jonathan, 2017. "Growing through Sabotage: Energizing Hierarchical Power," Working Papers on Capital as Power 2017/02, Capital As Power - Toward a New Cosmology of Capitalism.
    5. repec:zbw:caprev:176890 is not listed on IDEAS
    6. repec:zbw:espost:157801 is not listed on IDEAS
    7. Fix, Blair, 2014. "Rethinking Profit: How Redistribution Drives Growth," Working Papers on Capital as Power 2014/02, Capital As Power - Toward a New Cosmology of Capitalism.
    8. Bichler, Shimshon & Nitzan, Jonathan, 2016. "A CasP Model of the Stock Market," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 119-154.
    9. Fix, Blair, 2018. "The aggregation problem: Implications for ecological economics," Working Papers on Capital as Power 2018/03, Capital As Power - Toward a New Cosmology of Capitalism.
    10. Bichler, Shimshon & Nitzan, Jonathan, 2015. "The CasP Project: Past, Present, Future," Working Papers on Capital as Power 2015/04, Capital As Power - Toward a New Cosmology of Capitalism.
    11. repec:zbw:espost:157770 is not listed on IDEAS
    12. Bichler, Shimshon & Nitzan, Jonathan, 2015. "Still About Oil?," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 49-79.

    More about this item

    Keywords

    accumulation; aggregate concentration; breadth; business enterprise; capital; capitalism; centralization; competition; conflict; corporation; credit; crisis; debt; depth; disequilibrium; distribution; distributional coalitions; dual economy; employment; equilibrium; equity; expectations; finance; growth; hedonic indices; inflation; institutionalism; marginalism; methodology; monopoly; neoclassical economics; oligopoly; ownership; politics; power; price; profit; quality change; risk; ruling class; sabotage; stagflation; stagnation; state; stock market; technology; unemployment; United States; US; Veblen; violence;

    JEL classification:

    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • P12 - Economic Systems - - Capitalist Systems - - - Capitalist Enterprises
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary

    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:pra:mprapa:5624. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.