On price inflation

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Description/Abstract

This thesis seeks to analyse price inflation under oligopoly
capitalism. Its central argument is that under oligopoly capitalism,
price inflation is a structural phenomenon. For a greater understanding
of that phenomenon, the adoption of the inter-industrial approach for its
analysis seems essential. According to this approach, price inflation
can be initiated in a single industry or in an industry group. The
initiating factor may be an increase in the mark-up, an increase in the
money wage rate or an increase in the foreign currency price of an
imported input. It can also be initiated by devaluation. The
input-output matrix, the core of the economic system, is the key to the
transmission of inflationary impulses (in the form of higher unit cost)
from one industry to another. Real wage resistance, rigid mark-up
resistance, and rigid foreign resistance do no more than perpetuate or
worsen the inflationary experience. The inflationary process itself has
a dual role to play. It acts as a mechanism for shifting income
distribution in favour of one section of the society against another and
as a mechanism for changing the price structure.

The author argues that the abandonment of the macroeconomic
approach to the analysis of price inflation and its replacement by the
inter-industrial approach is the first step for serious analysis of that
structural phenomenon.