Inflation as Redistribution. Creditors, Workers, Policymakers

Inflation as Redistribution. Creditors, Workers, Policymakers
Bichler, Shimshon and Nitzan, Jonathan. (2023). Working Papers on Capital as Power. No. 2023/01. April. pp. 1-22. (Article - Working Paper; English).

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Alternative Locations

https://capitalaspower.com/2023/04/bichler-nitzan-inflation-as-redistribution-creditors-workers-policymakers/, https://www.academia.edu/100979482/Inflation_as_Redistribution_Creditors_Workers_Policymakers, https://www.econstor.eu/handle/10419/270867

Abstract or Brief Description

This paper is part of a dialogue with Blair Fix on how inflation redistributes income between creditors and workers and the way in which monetary policy affects this process. In his 2023 paper, ‘Inflation! The Battle Between Creditors and Workers’, Fix shows, first, that the impact of U.S. inflation on creditor-worker distribution has been historically contingent (favouring workers during some periods and creditors in others); and second, that since the 1970s, Fed policy to combat inflation with higher interest rates boosted the yield of creditors relative to the wage rate of workers. Our own research suggests that these conclusions might be too general. We point out that creditors are not a monolithic class and that different types of creditors are affected differently, and often inversely, by the rate of interest. We illustrate that, contrary to bank depositors, bondholders tend to lose from inflation. And we show that monetary policy, at least in the United States, appears to follow rather than determine market yields. More generally, since most capitalists nowadays are lenders as well as borrowers, and given that ‘dominant capital’ profits from the full spectrum of investment instruments, we wonder if ‘creditors’ is still a useful category for analysing redistribution in general and inflationary redistribution in particular.

Language

English

Publication Type

Article - Working Paper

Commentary on

Inflation! The Battle Between Creditors and Workers
Fix, Blair. (2023). Economics from the Top Down. 23 March. pp. 1-20. (Article - Magazine; English).

Keywords

Blair Fix bond yields creditors income distribution inflation interest rate labour monetary policy total returns wages

Subject

BN Labour
BN Money & Finance
BN Power
BN Policy
BN Region - North America
BN State & Government
BN Business Enterprise
BN Capital & Accumulation
BN Class
BN Conflict & Violence
BN Distribution

Depositing User

Jonathan Nitzan

Date Deposited

29 Apr 2023 21:05

Last Modified

11 May 2023 13:32

URL:

https://bnarchives.yorku.ca/id/eprint/780

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