ABSTRACT OF PAPER
Title: Modigliani and Tarantelli searching for a generalization of the Post Keynesian labor market model
Author: Michelagnoli Giovanni
It has recently been emphasized that the study of the labor market should be considered "an underdeveloped area for Post Keynesian economics, with a marginal product [...] which is in all probability significantly higher than that of research time devoted to price behavior or endogeneity of money supply" (King 2002, p. 85). On this basis, it has been suggested the opportunity to develop this research track, also to avoid «the appropriation of ostensibly heretical ideas by more enterprising spirits from the neoclassical mainstream» (ibid). However, the methodological codification of a ‘Post Keynesian labor economics’ exhibited issues so critical that its distinction “from other unorthodox approaches to the labor market" appears to be, sometimes, extremely difficult (ibid.). This paper, which develops some materials proposed in Michelagnoli (2012) with particular regard to Modigliani and Tarantelli’s (MT) analysis of the Phillips curve, aims at suggesting a reconstruction of their analytical contribution to the formulation of a generalized Post Keynesian labor market model. The exposition is organized as follows. The first paragraph will suggest some short biographical sketches, mainly related to the origins of MT’s intellectual friendship. In the second one, we will shortly recall those which are acknowledged as the main elements that characterize the Post Keynesian analysis of the labor market (Lavoie 2014, Holt-Pressman 2001 and Appelbaum 1979). In the third paragraph, the structure of the 'four cards' Post Keynesian model, which represents the starting point of MT’s refinement, will be depicted. The fourth section will focus the structure and the functioning of the generalized model (MT model). We will finally conclude by highlighting the following points: 1. MT’s generalization of the 'four cards' model occurs thanks to the introduction of some elements, which typically qualify a developing country, within their analytical scheme. 2. Compared to what is sometimes conceived as the typical Post Keynesian labor market model, i.e. Kalecki’s model (Lavoie 2014), the MT model presents a higher degree of generality, which enables it to take into account both the «consumption effect» (which is dominant within the Kaleckian framework) and the «investment effect» (which, conversely, is dominant according to the neoclassical synthesis approach).
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