Inflation? It’s Import Prices and the Labor Share!

In their recent Working Paper Inflation? It’s Import Prices and the Labor Share! Lance Taylor and Nelson Barbosa argue that inflation should be analyzed as a dynamical macroeconomic process instead of the micro-oriented approach used by monetarist analysis.

After a critical presentation of the Phillips Curve and inflation targeting history, the authors build on contemporary structuralist theory and on an empirical exercise using a VEC model to discuss the challenges for the Biden administration.

According to the authors, conflicting claims to income are the underlying source of inflationary pressure. Import costs and policy repercussions complicate the picture. Still, the empirical results suggest that money wages would have to grow one percentage point per year faster than prices plus productivity for several years if the Fed is to meet a three percent inflation target.

In this Webinar, we will have a conversation with the authors about the theory, their results, and the policy options and challenges.

Link for the WP: https://www.ineteconomics.org/uploads/papers/WP_145-Taylor-and-Barbosa-Filho-Inflation.pdf

About the authors:

Lance Taylor received a Ph.D. in Economics from Harvard University in 1968. He has been a professor in the economics departments of Harvard and the Massachusetts Institute of Technology, the New School for Social Research, among other research institutions. He has published widely in the areas of macroeconomics, development economics, and economic theory.

Nelson Barbosa holds a Ph.D. in Economics from the New School for Social Research and is currently a Professor at FGV and the University of Brasilia. He has also worked as an economic analyst at the Brazilian Central Bank and, from 2006 through 2013, he was part of the senior economic staff at the Brazilian Ministry of Finance, first as Secretary of Economic Monitoring (2007-08), and later as Secretary of Economic Policy (2009-10) and Deputy Finance Minister (2011-13).