Inflation in the Welfare State

Inflation has presented an intractable problem for post-Keynesian aggregate demand management. It has not responded to direct intervention through wage-price controls. A failure of policy has been reinforced by a failure of explanation. Neither high employment and “low” unemployment rates pressing on labor costs and hence on prices, nor the growth of corporate market power imparting an “upward bias” to, price levels, persuasively explain the persistence of inflation. But inadequate as...