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Rethinking conflict inflation: the hybrid Keynesian–NAIRU character of the conflict Phillips curve

Thomas Palley

Review of Keynesian Economics2026https://doi.org/10.4337/roke.2026.01.03article
ABDC C
Weight
0.50

What the paper says

This paper presents a new formulation of conflict inflation in which the bargaining process is marked by opportunistic behavior by the dominant party. There is also full feedback of inflation expectations in the bargaining process. The model generates Phillips-styled inflation–unemployment dynamics that are a hybrid of Keynesian and NAIRU dynamics. Conflict inflation arises when economic activity rises above the consistent claims activity level, and it is subject to self-propelled conflict accelerationism. Immediately below that level, inflation holds constant at the expected rate. At low activity, accelerating disinflation can develop. That produces a family of pseudo-Phillips curves, each indexed by the expected inflation rate. The middle portion of the pseudo-Phillips curve is horizontal and stable. The outer portions are unstable, being marked by accelerating inflation and accelerating deflation. Conflict inflation is best addressed by unconventional policies, such as incomes policy.

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https://doi.org/https://doi.org/10.4337/roke.2026.01.03

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@article{thomas2026,
  title        = {{Rethinking conflict inflation: the hybrid Keynesian–NAIRU character of the conflict Phillips curve}},
  author       = {Thomas Palley},
  journal      = {Review of Keynesian Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.4337/roke.2026.01.03},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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