Income distribution, inflation and economic growth: A post-Keynesian approach

Abstract

The dispute between social classes for fractions of income was a central theme for economic analysis at least since David Ricardo and Karl Marx. Its importance as an interpretative key declined with the marginalist revolution of the late nineteenth century and did not regain its central role in the conventional economic approach ever since. However, its relevance was maintained among heterodox economists such as Michal Kalecki and reinvigorated by post-Keynesian thinking. This paper seeks to offer three analytical contributions to the post-Keynesian literature: (1) it presents an integrated framework on the relationship between distributive conflict, inflation and economic growth in an open economy with government; (2) it proposes the use of a general framework, based on liquid preference, assets own interest rates, currency hierarchy and productivity differentials to understand the determinants of the spot exchange rate; and (3) it suggests a distinct monetary rule to take into account the role of interest rates on distributive conflict inflation and demand and growth regimes.

Monetary Policy, Macroeconomic and Anomalies Interactions Post COVID in Developed and Eastern European Stock Markets

“…According to Marques (2013), even a small economy in Portuguese compared to other European nations aspired to invest as shown by a causal and positive relationship between economic growth and stock market expansion. This has proven that stronger economic growth will contribute to a stronger stock market performance (Amitrano & Vasconcelos, 2019;Liang & Silber, 2020;Parui, 2022;Shahzad et al, 2021;Singh et al, 2020), and vice versa (Alawin et al, 2018). As a result, Hypothesis Three (H3) of IPI has a positive influence on the Stock Market Index during anomalous market momentum post-COVID-19 fails to be rejected.…”

“…According to Keynesian theory, positive economic growth and stock gains are interrelated (Amitrano & Vasconcelos, 2019). This theory affirms that economic regulation by the government can assist in maintaining financial stability, prevent severe downturns, lessen the impact of economic shocks, and foster financial market stability (Parui, 2022).…”

The role of destructive mechanisms within economic evolution

“…Determining the rules that govern economic life is at the core of interest of many economists, as shown in the studies by Richard R. Nelson (2016), Uwe Cantner (2016), Oded Stark, Fryderyk Falniowski, and Marcin Jakubek (2017), Beata Ciałowicz and Andrzej Malawski (2017), Claudio Roberto Amitrano and Lucas Vasconcelos (2019), and Stanisław Wanat, Monika Papież, and Sławomir Śmiech (2019). In these works, special attention is given to the roots, structures, and results of the economic processes presented.…”