Macroeconomic implications of financialization
AbstractA growing literature suggests that 'financialization' may weaken the performance of non-financial corporations and constrain the growth of ag- gregate demand. This paper evaluates (some of) the claims that have been made using two alternative approaches (one derived from Skott (1981, 1988, 1989) and one from Lavoie and Godley (2001-2002)) and two differ- ent settings (a labor-constrained setting and a dual-economy setting). All models pay explicit attention to financial stock-flow relations. The results are insensitive to the precise specification of household saving behavior but depend critically on the labor market assumptions (labor-constrained vs dual) and the specification of the investment function (Harrodian vs stagnationist). JEL Categories: E12, E21, E44
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2007-08.
Date of creation: Jun 2007
Date of revision:
financialization; stock-flow consistency; retention rate; ex- ternal finance; new issues.;
Other versions of this item:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-30 (All new papers)
- NEP-MAC-2007-06-30 (Macroeconomics)
- NEP-PKE-2007-06-30 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Skott & Peter Flaschel, 2004.
"Steindlian Models of Growth and Stagnation,"
UMASS Amherst Economics Working Papers
2004-11, University of Massachusetts Amherst, Department of Economics.
- Skott, Peter, 1997. "Stagflationary Consequences of Prudent Monetary Policy in a Unionized Economy," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 609-22, October.
- Skott, Peter, 1981. "On the 'Kaldorian' Saving Function," Kyklos, Wiley Blackwell, vol. 34(4), pages 563-81.
- Skott, Peter, 2005.
"Fairness as a source of hysteresis in employment and relative wages,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 57(3), pages 305-331, July.
- Peter Skott, 2004. "Fairness as a source of hysteresis in employment and relative wages," UMASS Amherst Economics Working Papers 2004-04, University of Massachusetts Amherst, Department of Economics.
- Skott, Peter, . "Fairness as a source of hysteresis in employment and relative wages," Economics Working Papers 2003-6, School of Economics and Management, University of Aarhus.
- Lavoie, Marc, 1995.
"The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques,"
Cambridge Journal of Economics,
Oxford University Press, vol. 19(6), pages 789-818, December.
- Lavoie, M., 1992. "The Kaleckian Model of Growth and Distribution and its Neo-Ricardian and Neo-Marxian Critiques," Working Papers 9201e, University of Ottawa, Department of Economics.
- Daniel Levy & Mark Bergen & Shantanu Dutta & Robert Venable, 2005.
"The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains,"
- Levy, Daniel, et al, 1997. "The Magnitude of Menu Costs: Direct Evidence from Large U.S. Supermarket Chains," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 791-825, August.
- repec:aah:aarhec:1998-16 is not listed on IDEAS
- Engelbert Stockhammer, 2000.
"Financialization and the Slowdown of Accumulation,"
geewp14, Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
- Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-47, February.
- Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
- James Crotty, 2005. "The Neoliberal Paradox: The Impact of Destructive Product Market Competition and Impatient Finance on Nonfinancial Corporations in the Neoliberal Era," Research Briefs rb2003-5, Political Economy Research Institute, University of Massachusetts at Amherst.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Saunders).
If references are entirely missing, you can add them using this form.