Accelerating, maintaining and sanctioning factors of inflation

Luiz Carlos Bresser-Pereira with Yoshiaki Nakano

Brazilian Journal of Political Economy, 1984 4(1): 1-25. In Portuguese, in the same journal and in Anais do X Encontro Nacional de Economia da ANPEC, Belém, dezembro 1983.

To understand inflation or stagflation in present day oligopolistic capitalism, it is necessary to distinguish the accelerating, the maintaining and the sanctioning factors of inflation. Four are the accelerating factors: change in profit margins, change in real wages above (or below) productivity, changes in the real exchange rate and in the costs of imports. The basic maintaining factors are formal and informal indexation of the economy and mark-up pricing. Given and autonomous inflation, that is, independent of sustained demand or full employment, the fundamental sanctioning factor of inflation will be the money supply.

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