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Does Public Deficit Mean Inflation? A Reflection on the Kaleckian and Minskian Tradition

Narciso Tuñez-Area

Abstract

This paper analyses the determination of prices within a Kaleckian and Minskian framework. In the Minskian model, public deficit generates mark-up inflation, a result that resembles Neo-Keynesian models of growth. In the Kaleckian model, an increase in aggregate demand is not absorbed by inflated prices but by a higher utilisation of capacity. This paper discusses issues at the core of Post-Keynesian thought.

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