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Finance, inflation and employment: A post-Keynesian/Kaleckian analysis

Argitis, Georgios; Dafermos, Yannis


Georgios Argitis


The purpose of this paper is to contribute to the post-Keynesian/Kaleckian macroeconomic literature. We develop a macroeconomic model that explicitly integrates the role of borrowing and cash payment commitments on outstanding debt (interest plus principal repayment) into the consumption and investment expenditures, as well as into the inflation-generating process. We explore the way that finance influences the distribution effects of inflation in the demand-side of a money/credit-using economy; we suggest a new Phillips curve that encapsulates the impact of financial commitments on wage and profit claims. We argue that high debt and cash payment commitments are likely to be associated with a positive demand-side effect of inflation on the rate of employment; and that they might be conducive to a negative supply-side effect of employment on the inflation rate. © The Author 2011. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.


Argitis, G., & Dafermos, Y. (2011). Finance, inflation and employment: A post-Keynesian/Kaleckian analysis. Cambridge Journal of Economics, 35(6), 1015-1033.

Journal Article Type Article
Publication Date Nov 1, 2011
Journal Cambridge Journal of Economics
Print ISSN 0309-166X
Electronic ISSN 1464-3545
Publisher Oxford University Press (OUP)
Peer Reviewed Peer Reviewed
Volume 35
Issue 6
Pages 1015-1033
Keywords Phillips curve, finance, debt payment commitments
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