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Inflation in developing economies

Author

Listed:
  • Peter Skott

    (Department of Economics, University of Massachusetts Amherst)

Abstract

Phillips curves and natural rates of unemployment provide a poor foundation for analyzing inflation in developing economies. Structuralist alternatives have focused on distributional conflict and cross-sectoral interactions, but if the distributional claims are exogenous, the theory has formal similarities with mainstream analysis, generating a natural rate of underemployment. This paper outlines a modified structuralist model in which historically determined distributional claims eliminate this natural rate of underemployment. Economic development and structural transformation are not blocked by immutable distributional claims, but shocks to relative incomes can produce explosive inflation.

Suggested Citation

  • Peter Skott, 2021. "Inflation in developing economies," UMASS Amherst Economics Working Papers 2021-08, University of Massachusetts Amherst, Department of Economics.
    • Handle: RePEc:ums:papers:2021-08
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    File URL: https://scholarworks.umass.edu/econ_workingpaper/305/
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    Citations

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    Cited by:

    1. Paul Auerbach & Peter Skott, 2021. "Visions of the future – a socialist departure from gloom?," PSL Quarterly Review, Economia civile, vol. 74(298), pages 155-177.
    2. Christian P Pinshi, 2022. "Ciblage des prévisions d'inflation : Un nouveau cadre pour la politique monétaire ?," Working Papers hal-03548273, HAL.
    3. PINSHI, Christian P., 2022. "Inflation-Forecast Targeting: A New Framework for Monetary Policy?," MPRA Paper 111709, University Library of Munich, Germany.

    More about this item

    Keywords

    Phillips curve; underemployment; distributional conáict; structuralist model;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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