Date: Tuesday, 18 February 2025, at 12:15 pm
Venue: Seminar Room Bruguier Pacini, DEM
Speaker and Title:
Davide Usula (Sant’Anna School of Advanced Studies)
Phases of distributive conflict and inflation spirals
Abstract:
We examine the relationship between income distribution and price dynamics, with a particular focus on the role of distributive conflicts between labor and capital in the US. As advanced economies experience a resurgence of inflation reminiscent of the 1970s, we point out the mechanisms through which wage and profit claims impact price stability. We focus on the U.S. economy from a long-run perspective, with a spectral analysis—both in the frequency and time-frequency domain— of the past 60 years to reveal historical differentiations that shed light on the underlying configurations associated with distributive conflict.
Then, using a low-dimensional nonlinear model designed to study labor–capital conflict, we attempt to qualitatively replicate the emergence and persistence of different distributive-inflationary configurations. The model shows the emergence of wage-price and profit-price configurations depending on the prevalence of certain parameters. These parameters also act as critical factors that induce bifurcations in the underlying macroeconomic dynamics.
Our aim is to isolate the role played by the claims of firms and workers in shaping the distributive-inflationary phase. These two groups, by definition, are in opposition to each other and thus contribute to the formation of configuration and conflict phases that underlie specific price dynamics.