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The growing dichotomy between real and financial sectors

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  • Roy Trivedi, Smita

Abstract

The paper contends that the economic growth process around the world has seen a growing dichotomy between real and financial sectors in the last four decades. There has been a marked stagnation in the real sector with falling growth and productivity levels, worsening physical investment and employment growth and dwindling saving rates. In contrast, the financial sector has seen a huge appreciation in financial assets and growing income from ownership of financial capital. The paper highlights the paradoxical coexistence of real sector stagnation with financial sector explosion.

Suggested Citation

  • Roy Trivedi, Smita, 2011. "The growing dichotomy between real and financial sectors," MPRA Paper 41421, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:41421
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    File URL: https://mpra.ub.uni-muenchen.de/41421/1/MPRA_paper_41421.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Real sector stagnation; Financial sector dominance; Economic crisis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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