Observations on Kaldorian and post-Keynesian approaches to inflation

This paper discusses the Kaldorian and post-Keynesian approaches to inflation. The main thrust of the paper is a critique of the notion of a fixed markup. Through the use of a two sector capital goods-consumption goods model with sectoral degrees of capacity utilisation, it is shown that the markup itself varies according to changes in the sectoral structure of the economy, including nonuniform changes in the sectoral rates of utilisation. It is suggested that viewing inflation as stemming from money wage increases relative to productivity is not as robust as it might appear in some of the post-Keynesian literature.