ABSTRACT
Throughout the years, a feature that has characterised Geoff Harcourt’s economic policy analysis has been his careful consideration of the structural features of the inflationary process in postwar capitalist economies.1 In fact, the central insight of Harcourt’s analysis of inflation is that the latter cannot be seen simply as the result of a gap between aggregate demand and supply (the ‘demand-pull’ view), or of a sequence of exogenous supply shocks (the ‘costpush’ view), or even as a combination of these two factors. Indeed, while both sets of elements may be very important in given circumstances, a complete explanation of the postwar inflationary process in advanced capitalist economies must rely on the consideration of the institutional aspects of these economies. More precisely, the mainspring of that process is to be found in the conflict around the distribution of income across various social groups. In this view, inflation is the result of a clash between non-compatible claims to the social product, and its pace ultimately depends on the degree of consensus across socioeconomic groups, the weight they attach to considerations of fairness and the bargaining power they wield. Since these elements are largely determined by social and institutional factors, no analysis of the inflationary process can be complete if it does not allow for the latter factors.
