Arestis, P and Sawyer, M (2013) Moving from inflation targeting to prices and incomes policy. Panoeconomicus, 60 (1). 1 - 17. ISSN 1452-595X
Abstract
This paper focuses on the future of economic policies with regard to inflation. The dominant approach to inflation over the past two decades or so has been inflation targeting. The global environment of the decade circa 1995 to 2005 with the "China effect" pushing down prices of manufactured goods and with primary commodity prices being subdued was conducive to low inflation. It is argued that inflation targeting has not been a great success story and is unable to address inflation arising from global forces or from struggles over the distribution of income. It is argued that a more sophisticated analysis than that contained in the Phillips curve is required. Further, and from our analysis, counter inflation policies should include the achievement of an inflation barrier consistent with full employment without inflationary pressures. This can be addressed by ensuring that there is sufficient productive capacity to underpin full employment, where sufficient is to be interpreted in terms of quantity, quality and geographical distribution. Further, we argue that this should be complemented by some form of incomes policy, to enable inflation to be contained without resorting to demand deflation.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | (c) 2013, Savez ekonomista Vojvodine. Reproduced with permission from the publisher. |
Keywords: | Incomes policy; Inflation barrier; Inflation targeting |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Economics Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 06 Dec 2013 12:27 |
Last Modified: | 10 Dec 2013 10:34 |
Published Version: | http://dx.doi.org/10.2298/PAN1301001A |
Status: | Published |
Publisher: | Savez ekonomista Vojvodine |
Identification Number: | 10.2298/PAN1301001A |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:77127 |