Inflation and distributive conflicts

Mario Pianta

MPRA Paper from University Library of Munich, Germany

Abstract: In order to understand the rise and fall of inflation of 2022-2023, new theories and analytical frameworks are needed, closely connected the profound changes in monetary and fiscal policies that have accompanied the wave of price increases. This paper proposes a view of inflation as a set of distributive conflicts, develops a set of conceptual tools, reviews the recent empirical evidence and discusses policy responses. The rise of inflation was set in motion by the production distortions that emerged at the end of the covid-19 pandemic and by major rises in energy prices, accelerated by the start of the Ukraine war. Price rises then spread throughtout the economy, due to business search for higher profits. Price levels are now stabilizing at a significantly higher level, with lasting consequences on income distribution, the purchasing power of wages, and financial values. Facing inflation, economic policies have experienced a major turn, with monetary authorities in the United States and Europe turning to restrictive policies. The macroeconomic outlook, the trajectories of structural change, the distribution of income and the dynamics of finance are deeply affected by the new context; possible policy alternative, with a more coordinated framework for public action, are discussed in the conclusions of the paper.

Keywords: Inflation; income distribution; finance; economic policies (search for similar items in EconPapers)
JEL-codes: E31 E51 E61 E64 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-cis, nep-mac, nep-mon and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:119345

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