Vol. 12 No. 4 (1992)
How to Cite
A structuralist analysis of inflation and stabilization
Abstract
This paper develops a model in which the distributive conflict between capital
and labor is the driving force which generates inflationary pressures in a market economy. In
the model the rate of inflation is a function of the capacity of firms to pass increases in costs
to prices and of the relative power of workers and employees associations in the process of
collective bargaining. One of the main results of this analytical framework is that the structure
of the capital/labor relations in a country, the process of collective bargaining and the
structure of unions organizations are important determinants of inflationary pressures. As a
result, institutional reforms which promote cooperation on capital/labor relations are of great
importance in stabilization policies, if the social costs of stabilization are to be minimized.
JEL Classification: E31; J52.
Keywords: Inflation stabilization distributive conflict