by Summary:
New Paper by Julia Braga and Franklin Serrano. From the abstract: The conflicting claims approach to the theory of inflation so thoroughly surveyed and well presented in Chapter 8 of Lavoie’s (2022) book is deservedly becoming increasingly consensual among heterodox (and even some notable mainstream) macroeconomists. However, the relevance of a concept (and the very existence of) a NAIRU (Non-Accelerating Inflation Rate of Unemployment) derived consistently from the very premises of the conflicting claims approach is still very controversial. In this review article, we will be to argue that a NAIRU is not really useful for the conflicting claims approach. First, it can only properly be derived under quite restrictive assumptions; second, if a NAIRU actually existed, it would render demand
Topics:
Matias Vernengo considers the following as important: Braga, Distributive conflict, inflation, Lavoie, NAIRU, Serrano
This could be interesting, too:
New Paper by Julia Braga and Franklin Serrano. From the abstract: The conflicting claims approach to the theory of inflation so thoroughly surveyed and well presented in Chapter 8 of Lavoie’s (2022) book is deservedly becoming increasingly consensual among heterodox (and even some notable mainstream) macroeconomists. However, the relevance of a concept (and the very existence of) a NAIRU (Non-Accelerating Inflation Rate of Unemployment) derived consistently from the very premises of the conflicting claims approach is still very controversial. In this review article, we will be to argue that a NAIRU is not really useful for the conflicting claims approach. First, it can only properly be derived under quite restrictive assumptions; second, if a NAIRU actually existed, it would render demand
Topics:
Matias Vernengo considers the following as important: Braga, Distributive conflict, inflation, Lavoie, NAIRU, Serrano
This could be interesting, too:
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New Paper by Julia Braga and Franklin Serrano. From the abstract:
The conflicting claims approach to the theory of inflation so thoroughly surveyed and well presented in Chapter 8 of Lavoie’s (2022) book is deservedly becoming increasingly consensual among heterodox (and even some notable mainstream) macroeconomists. However, the relevance of a concept (and the very existence of) a NAIRU (Non-Accelerating Inflation Rate of Unemployment) derived consistently from the very premises of the conflicting claims approach is still very controversial. In this review article, we will be to argue that a NAIRU is not really useful for the conflicting claims approach. First, it can only properly be derived under quite restrictive assumptions; second, if a NAIRU actually existed, it would render demand management policies undesirable and very destabilizing anyway. With that in mind, the key aspects explored here are: 1) the different roles of hysteresis in the output and labour markets; 2) the assumptions concerning real profit markups of firms; and 3) the extent to which money wage increases actually incorporate past (or expected) inflation. We also add some remarks regarding the role of changes in international commodity prices and nominal exchange rates that further illustrate the necessary relation between conflicting claims inflation and the theory of distribution and relative prices.
Read the rest here.