Anti-Inflation Policies in the Evolution of Federico Caffè’s Economic Thought

Riccardo Baioni

Review of Political Economy, 2025, vol. 37, issue 2, 523-542

Abstract: Against the background of an analysis of inflation characterized by distributional conflicts, Caffè proposes in the 1950s and 1960s the establishment of a ‘complex treaty' to regulate industrial relations, which should include, inter alia, price controls and wage policies. Intersecting his scarcely investigated analyses in the 1970s and in the 1980s on Robinson's (1972) The Second Crisis of Economic Theory, Minsky's (1975) John Maynard Keynes and Burchardt et al. (1944) The Economics of Full Employment, the paper shows an evolution in Caffè’s elaboration from the period of the stagflation crisis onward. The paper shows that his analyses about the coexistence of full employment and price stability began to emphasize the re-articulation of the production structure through targeted public investments. Moreover, Caffè suggests the possibility of using controls on international trade, the localization of industries and the regulation of private investment. Finally, Caffè changed his position on wage moderation policies, rejecting their use. Caffè's analysis during the 1970s-80s marks a radical alternative to the return of unemployment and the redistribution of income to the detriment of labor.

Date: 2025
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DOI: 10.1080/09538259.2024.2443773

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