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A (Post-) Keynesian perspective on "financialisation"

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  • Eckhard Hein

    ()
    (Macroeconomic Policy Institute (IMK) at Hans Boeckler Foundation, Duesseldorf)

Abstract

Post-Keynesian demand driven distribution and growth models, based on the notion of distribution conflict between different groups, have been critical regarding the macroeconomic effects of 'financialisation'. In the present paper, firstly, we attempt to identify theoretically and empirically the main channels of influence of 'financialisation' on investment, saving and distribution in order to obtain a precise macroeconomic meaning of 'financialisation' in a distribution and growth context. Secondly, we analyse the effects of 'financialisation' in a simple stock-flow consistent Post-Keynesian/Post-Kaleckian distribution and growth model and we show that with 'normal' parameter constellations 'financialisation' generates systemic instability.

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Bibliographic Info

Paper provided by IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute in its series IMK Studies with number 01-2009.

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Length: 59 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:imk:studie:01-2009

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Citations

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Cited by:
  1. Eckhard Hein, 2012. "Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model," PSL Quarterly Review, Economia civile, vol. 65(260), pages 11-51.
  2. Eckhard Hein & Christian Schoder, 2011. "Interest rates, distribution and capital accumulation -- A post-Kaleckian perspective on the US and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(6), pages 693-723, November.
  3. Georgios Argitis & Stella Michopoulou, 2011. "Are Full Employment and Social Cohesion Possible Under Financialization?," Forum for Social Economics, Taylor & Francis Journals, vol. 40(2), pages 139-155, January.
  4. Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 34(3), pages 475-496, April.
  5. Hein, Eckhard, 2011. "Distribution, 'financialisation' and the financial and economic crisis: Implications for post-crisis economic policies," IPE Working Papers 09/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  6. Hein, Eckhard & Truger, Achim, 2010. "Finance-dominated capitalism in crisis – the case for a Global Keynesian New Deal," MPRA Paper 21175, University Library of Munich, Germany.
  7. Jörg Bibow, 2010. "Alternative Strategien der Budgetkonsolidierung in Österreich nach der Rezession," IMK Studies 03-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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