Nominal wage adjustment is modelled as resulting from bargaining between a risk-neutral firm and a risk-averse worker, in an environment where the rate of inflation is a random variable. Risk aversion makes for endogenous indexation arrangements, which deliver partial indexation as they exploit...

In The Economics of Imperfect Competition, Joan Robinson argued that an increase of the consumers' incomes should make demand less elastic-which, although reasonable about individual demand as an assumption on preferences, suggests a role for income distribution as far as market demand is...