It is developed a post-keynesian macrodynamic model of capacity utilization, distribution and conflict inflation, in which the supply of credit-money is endogenous. Nominal interest rate is determined by banks as a markup over the base rate, which is set by the monetary authority. Over time, banking markup varies with firms' profit rate on physical capital, while the base rate rises with any excess demand when capacity is fully utilized. The behavior of the economy is analyzed for the cases in which demand is or is not enough to ensure full capacity utilization.
