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Some Stylized Facts on the Finance-Dominated Accumulation Regime

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  • Engelbert Stockhammer

Abstract

While there is an agreement that the Fordist accumulation regime has come to an end in the course of the 1970s, there is no agreement on how to characterize the post-Fordist regime (or if a such is already in place). The paper seeks put together various arguments related to financialization (in the broad sense) from a macroeconomic point of view and investigate the relevance of these arguments by means of an analysis stylized facts for EU countries. The paper discusses changes in investment behaviour, consumption behaviour and government expenditures, investigating to what extent changes are related to financialization. Households experience higher debt levels. Rising profits of businesses come with only moderate investment. The notion of a “finance-dominated” accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. The finance dominated accumulation regime is characterized by a mediocre growth performance and by higher volatility. However, so far deregulated financial markets have not lead to major financial crises in advanced capitalist economies. A possible reason for this is that the size of the state sector has not been substantially reduced despite neoliberal attempts to do so.

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Bibliographic Info

Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp142.

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Date of creation: 2007
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Handle: RePEc:uma:periwp:wp142

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Keywords: financialization; finance-dominated accumulation regime; macroeconomics consumption; investment; financial system; financial stability;

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References

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  1. Engelbert Stockhammer & Özlem Onaran & Stefan Ederer, 2007. "Functional income distribution and aggregate demand in the Euro-area," Department of Economics Working Papers wuwp102, Vienna University of Economics, Department of Economics.
  2. Case, Karl E. & Quigley, John M. & Shiller, Robert J., 2012. "Comparing Wealth Effects: The Stock Market versus The Housing Market," Department of Economics, Working Paper Series qt6px1d1sc, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  3. Alan Carruth & Andy Dickerson & Andrew Henley, 1998. "What Do We Know About Investment Under Uncertainty?," Studies in Economics 9804, Department of Economics, University of Kent.
  4. James Crotty, 2007. "If Financial Market Competition is so Intense, Why are Financial Firm Profits so High? Reflections on the Current ‘Golden Age’ of Finance," Working Papers wp134, Political Economy Research Institute, University of Massachusetts at Amherst.
  5. Pascal Petit, 1999. "Structural Forms and Growth Regimes of the Post-Fordist Era," Review of Social Economy, Taylor & Francis Journals, vol. 57(2), pages 220-243.
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Cited by:
  1. Hein, Eckhard, 2009. "‘Financialisation’, distribution, capital accumulation and productivity growth in a Post-Kaleckian model," MPRA Paper 18574, University Library of Munich, Germany.
  2. Engelbert Stockhammer & Paul Ramskogler, 2009. "Wie weiter? Zur Zukunft des Postkeynesianismus," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 35(3), pages 329-354.
  3. Florin-Marius PAVELESCU, 2008. "Interdependencies Between Gross Capital Formation, Economic Growth And External Equilibrium In The Context Of The European Union Enlargement," Romanian Journal of Economics, Institute of National Economy, vol. 27(2(36)), pages 79-94, December.
  4. Hein, Eckhard & Truger, Achim, 2010. "Finance-dominated capitalism in crisis: The case for a Global Keynesian New Deal," IPE Working Papers 06/2010, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  5. Till van Treeck, 2008. "The political economy debate on ‘financialisation’ – a macroeconomic perspective," IMK Working Paper 01-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  6. Georgios Argitis & Stella Michopoulou, 2011. "Are Full Employment and Social Cohesion Possible Under Financialization?," Forum for Social Economics, Springer, vol. 40(2), pages 139-155, July.
  7. Thomas I. Palley, 2007. "Financialization: What It Is and Why It Matters," Working Papers wp153, Political Economy Research Institute, University of Massachusetts at Amherst.
  8. Eckhard Hein, 2009. "A (Post-) Keynesian perspective on "financialisation"," IMK Studies 01-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  9. Eckhard Hein & Till van Treeck, 2008. "'Financialisation' in Post-Keynesian models of distribution and growth - a systematic review," IMK Working Paper 10-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  10. Hein, Eckhard, 2011. "Distribution, ‘Financialisation’ and the Financial and Economic Crisis – Implications for Post-crisis Economic Policies," MPRA Paper 31180, University Library of Munich, Germany.
  11. Florin-Marius PAVELESCU, 2008. "Gross Capital Formation And Economic Growth During Early 2000’S In Eu-Member And Candidates States," Romanian Journal of Economics, Institute of National Economy, vol. 26(1(35)), pages 166-179, June.

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