The good, the bad or the ugly: financialization through heterodox and mainstream lenses

Since the late 1970s, heterodox economists have paid increasing attention to the phenomenon of financialization. However, the process, identified with the growing role of finance in the economy, as well as with its impact on the social, cultural and environmental aspects of society, was rather neglected in the mainstream economics. Despite its growing importance in the subsequent years – mainly due to the global financial crisis 2007–2009 – financialization still eludes unambiguous interpretation. The aim of the article is to identify and explain the differences in the perception of financialization between heterodox and mainstream economics. We add to the existing literature by making a clear distinction between the ways in which heterodox and mainstream economists understand and interpret financialization. We find that the main source of the different approaches to financialization are oversimplifications in the understanding and modelling of monetary and financial spheres in the mainstream analyses.