Pressure groups and inflation: a cyclical model
Abstract
This text presents arguments according to which the pressures of organized
groups – but which act in an uncoordinated way – on government decisions related to fiscal
issues, cause an increase in inflation, at the same time that they favour the disorganization
of the economy. This last effect imposes limits on the behavior of these groups. A “preypredator”
model is used to describe the cyclical correction between the level of organization
of such groups and inflation
JEL Classification: E31; D72.
Keywords: Inflation political economy lobby groups prey-predator model