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"Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model

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  • Eckhard Hein

Abstract

Focusing on the long-run effects of "financialization" and increasing shareholder power in a simple post-Kaleckian endogenous growth model, this paper examines the effects of increasing shareholder power on the demand regime, on the productivity regime, and on the overall regime of the model. Under special conditions, increasing shareholder power may have positive effects on capital accumulation and productivity growth and hence on potential growth of the economy. However, such a regime not only requires directly positive—or under certain conditions only weakly negative—effects of increasing shareholder power on the productivity regime but it also requires expansive—or under special circumstances only weakly contractive—effects of increasing shareholder power on capital accumulation via the demand regime of the economy. Both conditions have recently been questioned on empirical grounds, so that an overall long-run "contractive" regime seems to be the most likely outcome of "financialization," rising shareholder power, and pronounced shareholder value orientation.

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  • Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 475-496.
  • Handle: RePEc:mes:postke:v:34:y:2012:i:3:p:475-496 DOI: 10.2753/PKE0160-3477340305
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    References listed on IDEAS

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    1. Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-292, June.
    2. Irwin Garfinkel & Robert Haveman, 1977. "Earnings Capacity, Economic Status, and Poverty," Journal of Human Resources, University of Wisconsin Press, vol. 12(1), pages 49-70.
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    Cited by:

    1. Eckhard Hein, 2015. "Secular Stagnation or Stagnation Policy? Steindl after Summers," Economics Working Paper Archive wp_846, Levy Economics Institute.
    2. Eckhard Hein, 2016. "Secular stagnation or stagnation policy? Steindl after Summers," PSL Quarterly Review, Economia civile, vol. 69(276), pages 3-47.
    3. Hiroaki Sasaki, 2016. "Increased Shareholder Power, Income Distribution, and Employment in a Neo-Kaleckian Model with Conflict Inflation," Discussion papers e-16-008, Graduate School of Economics , Kyoto University.
    4. Hiroaki Sasaki & Shinya Fujita, 2012. "Income Distribution, Debt Accumulation, and Financial Fragility in a Kaleckian Model with Labor Supply Constraints," Discussion papers e-12-007, Graduate School of Economics Project Center, Kyoto University.
    5. Paolo Piacentini, 2016. "The demand-side vs. the supply–side in the analysis of employment: the potentials for the use of “employment multipliers”," Working Papers 0023, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.

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