Macroeconomics with Conflict and Income Distribution
This paper presents a Post Keynesian model explaining the determination of employment and income distribution. A major innovation is the incorporation of the insider-outsider description of labor markets into a macro framework. This introduces power and conflict into the macro process. Microeconomic bargaining considerations are central to macroeconomic outcomes. Endogenous government deflicits can sustain profitability in an otherwise contractionary environment. Firm level profit maximization may not produce macroeconomic profit maximization because firms fail to internalize the effects of economic activity on profitability.
Year of publication: |
1998
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Authors: | Palley, Thomas |
Published in: |
Review of Political Economy. - Taylor & Francis Journals, ISSN 0953-8259. - Vol. 10.1998, 3, p. 329-342
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Publisher: |
Taylor & Francis Journals |
Saved in:
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