Degree of organization of the economy and macroeconomic performance

Abstract

This article discusses the question of the relationship between the degree of
centralization of the price-decision-making process of economic agents and the inflation rate.
There are compared in a theoretical model, the conventional wisdom that postulates a positive
relationship between the two variables, the so-called “neo-corporativist” vision that puts
exactly the opposite conclusions, and an alternative conciliating the other two that will be
our principal focus. We will also analyse the behavior of organizations in the economy based
on the Olson work, taking some interesting implications to the model. It’s put in perspective
the question of the Brazilian union organization based on the model.

JEL Classification: E31; J51.