Positionalists

Positionalists are a group of economists who focus on the role of relative prices and income distribution in macroeconomic outcomes. They argue that understanding how prices change and how these changes affect the distribution of income is crucial for analyzing economic phenomena. This perspective contrasts with some mainstream macroeconomic approaches that may place more emphasis on aggregate variables like overall output or inflation.

Key to the positionalist viewpoint is the concept of "positional goods," a term popularized by economist Fred Hirsch. Positional goods are those whose desirability and value are dependent on their scarcity relative to others. Examples include prime real estate, exclusive luxury items, or positions of social status. As the economy grows and more people can afford basic goods, the demand for positional goods increases, leading to intensified competition and potentially social dissatisfaction, as their relative scarcity remains or even increases.

Positionalists often analyze how changes in relative prices, especially those affecting essential goods like housing or energy, can lead to significant shifts in income distribution. They might argue that inflation disproportionately impacts lower-income households by reducing their purchasing power for essential goods, thereby worsening their relative position. This focus on distributional consequences and the psychological and social effects of economic standing distinguishes their approach. Their work often seeks to explain phenomena like persistent inequality, consumer behavior, and the challenges of achieving widespread economic well-being in advanced economies.